The URL can be used to link to this page

Home My WebLink AboutCOM 0065.000 1998-2000 ~Y or M r~~~~ ~y ALAN S. KONISHI DONALD IKEDA County Clerk Deputy Couu!}• Clerk n a "rte CONSTANCE R. K1RIU Legis[nfive Auditor OFFICE OF THE CO LINTY CLERK County ojHawaii Hawaii County Building 25 Aupuni Sireei Hilo, Hawaii 96720 December 17, 1998 TO: James Y. Arakaki, Chair and Council Members FROM: Constance R. Kiriu~ Legislative Auditor RE: Post-Audit Report of the County of Hawaii Fiscal Year Ended June 30, 1998 For your review, deliberation, and acceptance, I am submitting the post-audit Financial Report of the County of Hawaii for the Fiscal Year Ended June 3Q 1998, and Management Letter dated October 23, 1998, as prepared 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: ? Implementation of procurement policies and procedures involving community group projects ? Workers' compensation claims process and the compilation and analysis of accident statistics ? Assuring an accurate process of assessing completed building permits ? Timely collection of solid waste receivables ? lntemal controls for cash collections of municipal golf course green fees and building perrnit fees ? The need to update the County's Long-Range Strategic Information Systems Pdan ? Issues related to the County's Year 2000 effort. The auditors will be present at the Finance Committee meeting on January 1 S, 1999, to answer any questions you may have. In the meantime, please feel free to contact me should you require further information. Enclosures cc: Ralph Kanetoku, KPMG Nelson Lau, KPMG Derek Mizuno, KPMG ~ S Oerea Nw N~. A y D na. sa FG teat, I).1e l~C 2 8 1998 , • q KPMG Peat Marwick LLP P 0 Box 4150 Telephone 808 531 7286 Telefax 808 541 9321 Honolulu, HI 96812 -4150 Telex 7238615 October 23, 1998 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 Hawaii. State of Hawaii (County), for the year ended June 30, 1998 and have issued our report thereon dated October 23, 1998. We have also audited the County's compliance with requirements applicable to its federal financial assistance programs and have issued our report thereon dated October 23, 1998. In planning and performing our audit of the general purpose financial statements of the Count}, 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 internal 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 to improve internal control or result in other operating efficiencies and are summarized in Appendix 1 to this letter. We have also reviewed the disposition of the recommendations made in the previous years report dated October 27, 1997. A number of recommendations were adopted as suggested or in modified fonn Other recommendations were not implemented and those which we felt merited reconsideration have been modified where necessary and restated in Appendix II to this letter. 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 Count}' 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 However. this report is a matter of public record and its distribution is not limited We would Tike 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 meet with you at your convenience. Very truly yours, 4 Zat l e /.c7 1damb,r Firm of KPL,O International 0 0 Appendix I COUNTY OF HAWAII STATE OF HAWAII Current Year Findings and Recommendations June 30, 1998 PROCUREMENT POLICIES AND PROCEDURES The County's procurement policies and procedures provide specific guidance for the purchase of construction services greater than or equal to $5,000 and Tess than $25,000. County agencies are required to obtain and document at least three price quotations from vendors and obtain approval from the respective department and the Purchasing Division of the Department of Finance (Purchasing Division) prior to County commitment. This procedure serves as an internal control to ensure that services are purchased at competitive prices. During our review of 25 procurement transactions, we noted two instances in which the procurement of construction services valued between $5,000 and $20,000 were not performed in accordance with the County's procurement policies and procedures. In one instance, three price quotations and approvals from the Director of the Department of Parks and Recreation and the Purchasing Division were not obtained prior to committing the County to an agreement for construction services. In the other instance, three price quotations were obtained: however, the necessary approvals from the Department of Parks and Recreation and Purchasing Division were not obtained prior to committing the County to an agreement for construction services. These instances occurred because volunteer community groups, which work with the Department of Parks and Recreation to plan, maintain and procure construction services for County parks under the Adopt -A -Park program, committed the County to services without following the prescribed County policies and procedures. The community groups committed the County through verbal agreements to have construction services performed by certain vendors. Shortly after receiving verbal commitment, the contractors proceeded with the construction services. Since construction activities had already commenced, the County completed the appropriate purchase requisitions and orders and approved payment to the contractors. Construction services that are less than $25,000 do not require execution of a construction contract. Department of Parks and Recreation personnel have clarified the County's procurement policies and procedures with these two community groups. Recommendation We recommend that the County clearly communicate established procurement policies and procedures to all community groups, and ensure that only authorized County personnel commit the County to contractual services. RISK MANAGEMENT PROCESS Workers' Compensation Claims Process During our review of the risk management process, we noted that the Claims Specialist working in the Workers' Compensation Unit of the Division of Industrial Safety (Workers' Compensation Unit) is solely responsible for the negotiation of workers' compensation claims' settlement agreements. Presently, there are no supervisory or third party reviews to verify 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 2 (Continued) 0 0 Appendix I COUNTY OF HAWAII STATE OF HAWAII Current Year Findings and Recommendations June 30, 1998 standards and in the best interest of the County. During fiscal year ended June 30, 1998, County employees filed approximately 140 workers' compensation claims and the County paid $2,534,684 in claims. 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. In addition, we noted that the County's workers' compensation claims liability is estimated by the Workers' Compensation Unit and Accounts Division of the Department of Finance (Accounts Division). The County's workers' compensation claims liability is comprised of estimates of the probable losses on reported claims and claims incurred but not reported (IBNR). The liability for reported claims is estimated by a case -by -case review of all claims. Estimates of IBNR are based on historical experience. The workers' compensation claims liability amounted to $5,848,019 at June 30, 1998. Actuarial studies of the workers' compensation liability are not performed as part of the County's risk management strategy. Actuarial studies provide independent verification of the County's workers' compensation liability and verification that average payment amounts on claims are consistent with industry averages. The County relies on the Workers' Compensation Unit and Accounts Division to provide a reasonable estimate of the future liability and has chosen not to incur the additional costs of an actuarial study. Recommendation We recommend that the County consider the benefit of (1) 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, (3) contracting an actuary to perform periodic actuarial valuations (i.e., annual or biennial), and /or (4) 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 Stauistics 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. 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. Based on discussions with the Division of Industrial Safety employees, such information is not compiled because (1) the current safety policy focuses on general accident prevention rather than on specific workers' compensation and general liability safety issues, (2) accident information is not received from the departments on 3 (Continued) O O Appendix I COUNTY OF HAWAII STATE OF HAWAII Current Year Findings and Recommendations June 30, 1998 a consistent and timely basis, and (3) the computer equipment does not presently have the capability to compile such data. Recommendation We recommend that the Division of Industrial Safety 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. 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 the County to use funds, previously used for claim settlements, for other County programs and needs. REVENUE GENERATION PROCESS Inclusion of Building Permits in the Assessment Valuation During our review of 20 real property tax assessment transactions, we noted two instances where building permits, issued in the first two quarters of calendar year 1997, had not been inspected, assessed and included in the valuation as of January 1, 1998. As a result, the County lost revenues because it was unable to assess and collect taxes for these improvements. In both of these instances, the improvements were expected to be completed prior to calendar year end and should have been inspected by appraisers in the Real Property Tax Division of the Department of Finance (Real Property Tax Division). The appraisers perform three site inspections a year. Prior to conducting these inspections, the appraisers will obtain lists of building permits issued by the Building Division of the Department of Public Works (Building Division) from the last cut off date to the current cut off date. The Real Property Tax Division believes that certain permits issued prior to the last cut off date were not recorded on the permit list used by the appraisers. The Real Property Tax Division has implemented an additional procedure to address the situation. Division clerks obtain and scan a listing by permit number, in addition to listings by date, to ensure that all permits are sequentially listed and accounted for. Recommendation We recommend that the Real Property Tax Division continue to review the listings by permit number to ensure that all building improvements are accounted for, inspected and assessed in a timely manner. Solid Waste Receivables Timely collection of solid waste (landfill) receivables has been a continual problem for the Department of Public Works. Landfill receivables outstanding for more than 90 days represented approximately 40% of the total receivable balance at June 30, 1998 and 1997. The delinquency problem can be attributed to the prohibition of cash collections at the landfill site and to the County's credit extension policies. 4 (Continued) 0 0 Appendix I COUNTY OF HAWAII STATE OF HAWAII Current Year Findings and Recommendations June 30, 1998 During testwork on landfill receivables, we noted that cash is not collected at the landfill sites and credit is extended without performing credit history reviews of commercial customers. This has resulted in extension of credit to all citizens and businesses regardless of credit history. Landfill use is only refused when outstanding receivable balances exceed 90 days. In addition, citizens who dispose of minimal waste and prefer to pay cash on site are not allowed to do so. The Solid Waste Division of the Department of Public Works (Solid Waste Division) must bill the customer under current County policy. As a result, the Solid Waste Division's accounts receivable consists of a large number of accounts with small receivable balances. For example, 1,851 out of a total of 1,997 accounts were less than or equal to $200 at June 30, 1998. In certain cases, the costs of billing and monitoring these accounts will exceed the amount to be collected. We were informed that the collection of cash at the Hilo landfill is a sensitive issue because of security problems at the isolated landfill site, which has only a limited number of staff. Department of Public Works personnel believe that cash collection at the West Hawaii site is feasible. Recommendation We recommend that the County consider allowing payments to be made at the West Hawaii landfill site and extending credit to users only upon satisfactory credit history reviews. Until satisfactory credit approvals are obtained, users should be required to pay cash at the time of use. Additionally, the County should consider on- site cash collection capabilities in its plans for the future East Hawaii landfill. If on site cash collections are not possible, the County should carefully assess the costs of extending credit to residential users. INTERNAL CONTROLS - CASH COLLECTIONS Collection of Hilo Municipal Golf Course Green Fees There 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 are only two staff employees responsible for the cashier, starter and marshal functions. One employee serves as the starter /cashier while the other employee performs the duties of the marshal. Cash register receipts are not required to be presented to obtain golf carts or to play golf. Under these circumstances, it may be possible for the starter to allow golfers to play for free or to pocket cash receipts and not enter it into the cash register. Green and cart fees at the Hilo Municipal Golf Course amounted to $739,000 for the fiscal year ended June 30, 1998. Recommendation We recommend that the County consider segregating the cash collection and starter functions at the Hilo Municipal Golf Course. Golf cart personnel should only provide golf carts to golfers with receipts and the starter should be positioned at the first hole to review receipts, verifying that payment was made. If this is not feasible, the County should consider placing a permanent sign indicating that receipts are required to play. The marshal could then randomly check golfers to ensure that they have a receipt. 5 (Continued) 0 0 Appendix I COUNTY OF HAWAII STATE OF HAWAII Current Year Findings and Recommendations June 30, 1998 Collection of the Building Division Perini! Fees There is a lack of adequate segregation of duties over permit fee receipts at the 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 the 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, the supervisor would not be able to detect the missing cash receipts as only the cash and permit applications, which are both missing, are reconciled. Permit fees for the fiscal year ended June 30, 1998 amounted to $1,144,574. Recommendation We recommend that the County consider segregating the cash collection, permit issuance and recording functions at the Building Division. One permit clerk should collect the cash and another clerk should collect the application and issue the permit. At the end of the day, the cash receipts, permit applications and permits should be reconciled by the supervisor. At 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, it was 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. Without an up -to -date systems plan, the "roadmap" to prioritize projects and allocate resources for County systems is missing. In the current year, we noted that the County Council approved an ordinance establishing a new data systems department. If established. the new department will be responsible for updating the Long -Range Strategic Information Systems Plan. Recommendation We recommend that the County update their Long -Range Strategic Information Systems Plan. 6 (Continued) 0 O Appendix I COUNTY OF HAWAII STATE OF HAWAII Current Year Findings and Recommendations June 30, 1998 YEAR 2000 County Wide Year 2000 Effort During our review of the County's Year 2000 plans in September 1998, we noted that the problem of ensuring that the assets of the County are millennium compliant was largely viewed as a data systems problem and therefore left up to the Data Processing Division of the Department of Finance (Data Processing Division) to resolve. Millennium compliance is a project management problem that impacts the entire County. The lack of a county-wide, coordinated Year 2000 effort that extends beyond the Data Processing Division is perhaps the biggest Year 2000 concern for the County. Although the Data Processing Division has been charged with assisting the other departments and agencies of the County in their Year 2000 efforts, the Data Processing Division has not been given the authority to truly manage these efforts. The County should ensure that all of their assets are compliant. These other assets include the applications within the County not supported by the Data Processing Division, such as those of the Department of Water Supply, Police Department, and the Prosecuting Attorney to name a few, as well as the systems that are generally referred to as non - information technology (IT) systems. The non -IT systems that need to be addressed include such systems as the telephone. automated air conditioning, automated lighting controls, elevator controls, emergency, facility security, and traffic control systems, to name a few. Recommendation We recommend that the County establish an executive level committee to coordinate the millennium compliance efforts of the entire County. While the Data Processing Division has taken many of the appropriate steps to ensure the Data Processing Division's assets are Year 2000 compliant, this is not sufficient to address the needs of the entire County. The executive level committee would coordinate the efforts of the entire County and address such issues as vendor and supplier compliance, facilities and equipment, end user computing, project tracking and risk management, contractor management, quality control, communication, awareness and sponsorship, and project management liaisons. Functions Outsourced to the City and County of Honolulu During our review of the County's Year 2000 plans, we noted that the County could improve its monitoring of the City & County of Honolulu's (City), Year 2000 efforts relative to the applications that the City runs on behalf of the County. These applications support the processing of motor vehicle registration, driver's licenses, real property taxes and voter registration. 7 (Continued) 0 0 Appendix I COUNTY OF HAWAII STATE OF HAWAII Current Year Findings and Recommendations June 30, 1998 We were informed that in October 1998, the Data Processing Division instructed County departments to send a "Y2K Readiness Questionnaire" to all outside vendors and governmental agencies that are service and support providers to the County for critical computer applications and systems and other date sensitive products and services. This form was prepared by the Data Processing Division to assist the County in assessing the outside vendors' and governmental agencies' progress towards Year 2000 compliance. Recommendation We recommend that the County closely monitor the City's Year 2000 remediation efforts relating to the applications that the City runs on behalf of the County. The County should require the City to provide Year 2000 project plans for these applications and obtain objective evidence that the work identified in the plan is being performed and that target completion dates will be met. The County should view this relationship with the same level of scrutiny that is applied to work being performed by outside vendors. Contingency plans should be developed in the event that the City is unable to not meet its goals and the functions required by the County are not available. 8 0 0 Appendix II COUNTY OF HAWAII STATE OF HAWAII Status of Prior Year Observations and Recommendations June 30, 1998 YEAR 2000 Observation The County will have significant problems adjusting the computer system for the Year 2000. Recommendation The Mayor or Director of Finance should take immediate steps to ensure that all necessary Year 2000 modifications are completed by 1999. Such steps should include setting benchmarks and developing a comprehensive plan that specifically addresses all Year 2000 issues for Wang applications and other department applications. For some applications, only 13 months may remain to address and resolve issues because some applications may project Year 2000 due dates beginning in 1999. The County Council should require quarterly reports from the Data Processing Manager regarding the status of implementation. Status The County has made progress towards Year 2000 compliance. Our comments relating to the County's Year 2000 efforts are included in Appendix I. INTERNAL AUDIT FUNCTION Observation The County should consider the benefits of an internal audit function. Recommendation The Mayor or Director of Finance should evaluate the costs versus the benefits of establishing an internal audit function. Status The Department of Finance submitted a proposal to the Office of the Mayor that described the situation and included a cost benefit analysis and an implementation plan. There has been no further action by the Office of the Mayor. 9 (Continued) 0 0 Appendix II COUNTY OF HAWAII STATE OF HAWAII Status of Prior Year Observations and Recommendations June 30, 1998 PUBLIC WORKS RECEIVABLES Observation Collection of past due sewer and landfill receivable accounts should be improved. Recommendation The Director of Public Works should: formalize and enforce credit, billing and collection policies and procedures for the department; consider using a private collection agency to collect on its accounts receivable greater than 90 days; and take a more proactive approach on its collections. The County should also record an allowance for doubtful accounts and write -off uncollectible balances. Status The Department of Public Works has addressed the finding as follows: I) The department has written a departmental accounts receivable policy statement which provides uniformity in the department's billing and collection procedures and is in the process of implementing the policy statement; 2) the department's Business Manager has been more involved in the collection process; 3) the Wastewater and Solid Waste Divisions each hired one additional employee on June 1, 1998 to assist with collections; and 4) the department has entered into an agreement in May 1998 with a collection agency to assist in the collection of accounts receivable outstanding more than ninety days that are less than $1,000 (wastewater) and greater than $25 and less than $1,000 (solid waste). Collection efforts for accounts receivable balances greater than or equal to $1.000 and outstanding more than ninety days are handled by the Office of the Corporation Counsel. The department does not intend to write off any receivable balances until the statute of limitations requirement of six years has expired. We noted that the aggregate balance of the sewer and landfill accounts receivables amounted to $2,538.435 and $1,842,368 at June 30. 1998 and 1997, respectively, an increase of $696,067. Delinquent sewer and landfill accounts receivable amounted to $938,091 at June 30. 1998. Although the department has made significant progress towards improving their billing and collection policies and procedures, the department should monitor the effectiveness (i.e., reduction of delinquent receivables) of the new policies and procedures being implemented. A finding relating to the cash collection policies at the landfills has been included in the current year findings and recommendations. 10 (Continued) 4 \J O Appendix II COUNTY OF HAWAII STATE OF HAWAII Status of Prior Year Observations and Recommendations June 30, 1998 LONG -RANGE STRATEGIC INFORMATION SYSTEMS PLAN Observation The County's systems plan needs to be updated. Recommendation Update the County's Long -Range Strategic Information Systems Plan. Status The County has not updated the Long -Range Strategic Systems Plan. Refer to Appendix I for the current finding and recommendation. 11 4 0 0 Memo To: Constance Kiriu, Legislative Auditor From: Harry A. Takahashi, Finance Director,1 Date: 11/24/98 Re: Audit Comments Thank you for this opportunity to comment on the Observations and Recommendations by the External Auditor. We have reviewed the recommendations relating to procurement policies and procedures, risk management process, revenue generation and year 2000. This memo will cover responses to procurement policies and procedures, revenue generation and year 2000, the response to risk management will be submitted by separate memo from the controller. Procurement Policies and Procedures The State Procurement Policies and Procedures acknowledge that violations are possible and provides for reporting of such violations. Title 3 of the Hawaii Administrative Rules establishes the rules of the State Procurement Policy Board for the implementation of the State Procurement Code. Chapter 131 of said rules provides for procurement violations. Compliance responsibility rests with the head of the purchasing agency. Section 3 -131 -3 relating to procurement violations recognizes that violations could result from administrative error, lack of knowledge or simple carelessness. Section 3- 131 -3© places responsibility of the initial investigation upon the head of the purchasing agency and that any improvement can best be achieved through the agency's own initiative. A complete set of the State Procurement Rules has been provided to each agency. The department of finance continuously updates the rules with the most current amendments and through its quarterly training sessions fiscal personnel are provided training opportunities. We believe that the County has adequate procedures for communicating procurement policies and procedures. Revenue Generation Process In reviewing the recommendation, the Auditor acknowledges that the Real Property Tax Division has implemented the inclusion of building permits into the assessment valuation procedure and as such there is no need for a response. Year 2000 (Functions outsourced to the City and County of Honolulu) The department of finance has attempted to coordinate the monitoring of the City's Year 2000 remediation efforts. We have submitted surveys to agencies who have data services being provided by the City and are in the process of following up with agencies who have yet to contact the City or who have inadequate respnses. • Page 1 0 0 We did request workpapers from the Auditors to determine which function in particular they thought the County needed closer monitoring, however, no workpapers have been available. Lacking such information we trust that the recommendation was meant for general application and we believe that our survey and follow up will suffice. Cc: Kalani Schutte, Deputy Finance Director Gary Kiyota, Real Property Tax Administrator Bill Gray, Purchasing Agent Gail Rock, Data Processing Manager • Page 2 • 0 0 A� <V OF N Stephen K. Yamashiro �' .0 %•; '<• Harry A Takahashi Mayor . * t L S K. &hutte • r .1.' Deputy m• E OF Hr • QCouutp of jf,atuaii DEPARTMENT OF FINANCE 25 Aupuni Street, Room 118 • Hilo, Hawaii 96720 -4252 (808) 961 -8234 • Fax(808)961 -8248 November 23, 1998 To: Connie Kiriu Legislative Auditor From: Dixie Kaetsu Controller Re: Response to Preliminary Draft Management Letter Risk Management Process Workers' Compensation Claims Process I would like to clarify that the process the County currently follows in arriving at the workers' compensation claims liability is in conformity with generally accepted accounting principles as applied to governments. The latest authoritative guidance in this area from the Governmental Accounting Standards Board (GASB) can be found in GASB Statements No. 10 ( "Accounting and Financial Reporting for Risk Financing and Related Insurance Issues ") and 30 ( "Risk Financing Omnibus "). Government entities are specifically allowed to estimate the accrual for claims based on a case -by -case review. In addition, the accrual for claims incurred but not reports (IBNR) is required to be based on historical experience (paragraph 9 of GASB Statement No. 30). Whether it is appropriate for the County to incur the cost of additional employees or outside actuarial expertise when there is no evidence that there is a problem with the present system (as noted by the auditors, there are no documented instances of improper settlements or payments) is a decision to be left to the highest management levels. Cc: Harry A. Takahashi, Director of Finance O . _Y' ar • ! St; • Stephen K. Yamashiro . Nc i l; ; `; ji:, Jay A. Sasan Mayor - >R� Safety Coordinator • 11� 'M'. - &tuntg of C 2tfnatt DIVISION OF INDUSTRIAL SAFETY 25 Aupuni Street • Hilo, Hawaii 96720-4252 (808) 961 -8215 TO: Connie Kiriu Legislative Auditor From: Jay Sasan Safety Coordinator Subject: Preliminary Draft Management Letter Fiscal Year Ended June 30, 1998 Date: November 25, 1998 In response to KPMG Pest Marwick, please find attached the workers' compensation specialist's comments. I agree with Marwick's recommendation of "hiring additional personnel with experience in handling workers' compensation claims ". This request has been made earlier but denied due to the county's fiscal constraints It should be pointed out that filling the retiring workers' comp. specialist position took seven months to accomplish and the succeeding employee left after a year. The current employee was hired on October 16, 1998. During this period some of the report data on accident statistics were considered secondary with serving claimants receiving top priority. The departments recently received approval for a computer and updating for the year 2000 that will include statistics data as suggested by the audits. An effort will also be made to have each department do their own statistical data as this will expedite their own information on a more timely basis. If the department is provided adequate staffing, the needs and services of the county would be better met. This would be cost effective and timely as well as maintain the confidentiality requirements of workers' comp. • 0 0 TO: Jay Sasan 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, the 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 per se negotiable. In the event a work injury is alleged, I 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 pay 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. In 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 of a claim. By far the majority of claims handling involves payment of periodic sums to claimants in the form of wage loss benefits (temporary total 0 0 disability or TTD), third party providers (medical care, services, and supplies). and vocational rehabilitation In pursuit of a "Risk Management Strategy" 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 private 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, I agree wholeheartedly with No. 1; we are in need of staff to handle not only claims management, but clerical as well. As to No. 2, periodic claims reviews, as with actuarial studies, would only be useful if necessary staffing and funding were available to effect suggestions /recommendations resulting from such reviews. As to reviews of settlements, I doubt the county could find an independent reviewer with the 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 Nothing proposed would reduce the number of claims filed, and such a suggestion reflects the naivete of the 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 is pre - determined as a master of law. t a 0 %srwt‘ 0 Stephen K. Yamashiro 4. p . i!:; & ..\ Richard Wurdeman M ayor � Corporation Counsel r tea•. • r r! ei`e1 ." tuuxtty cf pttfuttii OFFICE OF THE CORPORATION COUNSEL 101 Aupuni Street, Suite 325 • Hilo, Hawil'i 96720 -4262 • 13o8) 961$251 • Fax 18081 961.8622 November 24, 1998 MEMORANDUM TO: CONNIE KIRIU LEGISLATIVE AUDITOR FROM: RICHARD D. WURDEMAN %i CORPORATION COUNSEL SUBJECT: DRAFT MANAGEMENT LETTER (RISK MANAGEMENT PROCESS) This is a response to your request of November 20, 1998 for comment on the Risk Management Session of the KPMG Peat Marwick audit. The only involvement that this office has with The Worker's Compensation Unit is to provide representation on appeals to the Department of Labor and Industrial Relations and to advise on an as requested basis. Thus, we do not feel competent to provide meaningful comment on the auditor's recommendations. RDW:nas c.\MyFiles\Kiriu KPMG Audttwpd 0 0 - .oj�t•IOS N,4•. 4 Stephen K. Yamashiro 4 ? ; Harr}' A. Takahashi Mayor • Director •. "" +' S.K. Schutte Deputy Cnnttn #fir of Paitiaii DEPARTMENT OF FINANCE —REAL PROPERTY TAX 865 Piilani Street • Hilo, Hawaii 96720.4679 • Fax (808) 961 -8415 Appraisers (808) 961 -8354 • Clerical (808) 961 -8201 • Collections (808) 961-8282 November 23, 1998 To: Connie Kurisu, Legislative Auditor Via: Spencer K. Schutte, Deputy Finance Direct From: Gary M. Kiyota, RP Tax Administrator Subject: Preliminary Draft Management Letter Fiscal Year Ended June 30, 1998 We were aware of the problem that was reported by the auditors, KPMG Peat Marwick. Consequently, we adjusted our operational procedures to produce additional listings that insure that all permits issued by the Building Division are inspected and assessed in a timely and accurate manner. The auditors did notate that corrective action was taken by the Tax Division to insure that all building Improvements are accounted for, inspected and assessed in a timely manner. We will continue with diligent efforts to insure accurate assessments. It would be extremely helpful to us if KPMG Peat Marwick would provide the building permit numbers, of the permits that were missed, so that we can perform the necessary follow -ups of the reported problem. Thank you very much for this opportunity to respond to the draft management letter. 0 0 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 DATE: November 27, 1998 TO: Connie Kiriu Legislative Auditor THRU: Jiro Suma.: Deputy Chi; Engin:er FROM: Nancy Crawford • Business Manager RE: Preliminary Draft Financial Audit Report for the County of Hawaii Fiscal Year Ended June 30, 1998 Recommendation: The County should consider allowing payments to be made at the West Hawaii landfill site and extending credit to users only upon satisfactory credit history reviews. Until satisfactory credit approvals are obtained, users should be required to pay cash at the time of use. Additionally, the County should consider on site cash collection capabilities in its plans for the future East Hawaii landfill. If on site cash collections are not possible, the County should carefully assess the costs of extending credit to residential users. Response: During the fiscal year ending June 30, 1998, the department has focused on improving the collection of outstanding receivables. Currently Solid Waste Division is working on modifying position descriptions to include on site collection of payments. Our office is assisting in reviewing several alternative methods for collecting payments at both of the landfills. The Department is interested in establishing guidelines for credit applications. It will be necessary to fully implement a payment option at the landfill before we can limit the extension of credit by any means other than denying access. os , O O `t'y l' '` SOLID WASTE DIVISION - DPW • COUNTY OF HAWAII - 108 RAILROAD AVENUE - HILO, HAWAII 96720 HILO OFFICE (808) 961-8339 WAIMEA OFFICE (808) 885 -3687 KONA OFFICE (808) 327 -3507 MEMORANDUM November 27, 1998 TO: Connie Kiriu Legislative Auditor THRU: Jiro Sum.. Deputy $ ief Engi eer FROM: H. Walter Lucas 1J' Acting Solid Waste Division Chief RE• Preliminary Draft Management Letter Fiscal Year Ended June 30, 1998 Comments on the "Revenue Generation Process" - Solid Waste Receivables The Department of Public Works, Solid Waste Division, concurs with some of your recommendations We are considering on -site collection capabilities by use of valid credit cards and checks at the two landfill sites, presumably starting the collection program at the West Hawaii Pu'uanahulu Landfill scale house We have also considered the collection of cash payments, but due to the remote locations of the scale houses, we feel that there is not adequate security at this time The job position descriptions of our scale attendants will need to be modified and updated to include collection tasks. We would like to see the County of Hawaii have a centralized mechanism in place to seek satisfactory credit references or approvals prior to accepting landfill refuse from customers cc. DPW /ADM WRLms.mem9846 O O .,• ',¢,'•; ,,,,, Juliette M. Tulang Stephen K. Yamashiro ,,�y '_ Director Mayor ._ „- ' ' -_ -”" ' C. Kenneth Sowden •. ''& • - Deputy Director Qtnunfg of Anittaii DEPARTMENT OF PARKS AND RECREATION 25 Aupuni Street, Room 210 • Hilo, Hawaii 96720 -4252 (808) 961-8311 November 23, 1998 TO: Connie Kiriu, Legislative Auditor FROM: Julie Tulang, Director %y RE: Response to Preliminary Draft Management Letter Fiscal Year Ended June 30, 1998 Internal Controls -Cash Collection — Collection of Hilo Municipal Golf Course Green 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 with the receipts daily; place deposits in the bank night drop and submit the report to the P &R Administrative Office. Cash receipts are issued for green fees and carts, monthly cards are punched and a receipt issued if a cart is rented. Cart assignment is via cart number and this allows starters to verify use of 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. See Marvin Iida's detailed comments on the issues listed. If you have any other questions, please call me at X8420. Attachment: Memorandum to Julie Tulang from Marvin Iida 0 0 • November 23, 1998 • To: Juliette Tulang, Deputy Director Dept. Parks and Recreation From: Marvin Iida Hilo Municipal C.C. Subject: Management Letter Draft KPMG Peat Marwick The following are my comments relative to the "management letter" as it relates to the golf course. Collection of Hilo Municipal Golf Course Green Fees a. "There is a lack of adequate segregation of duties over the receipt of golf course green and cart fees True. There is no segregation of duties over the receipt of green fees, cart fees, and other fees at the golf course Starter's Office. For daily fee golfers or those from off - island or out -of -state the Starter collects the green fees; have the golfer sign in the daily register sheet (white); issue a cash register receipt for the amount collected as green fee; and if they rent a riding cart, have them sign the cart rental agreement register (blue sheet) and assign them to a cart. Most often the number of the cart is written on the back of the receipt corresponding to the cart rental agreement. For local residents playing with monthly cards, they must have their cards presented to be "punched" and they must sign the monthly card register sheet (yellow); and if they also rent a riding cart, their fee is collected and they are required to sign the cart rental agreement register (blue sheet). A receipt is issued. Most often the number of the cart is written on the back of'the receipt corresponding to the cart rental agreement. b. "The cashier performs both the cash collection and starter functions." True, however we do not have "'cashiers," we have two full -time and two part- time starters. As stated above, these Starters perform all functions required of the Starter's Office which includes marshaling of the course, running errands, etc. c. "The situation occurred because there are only two staff employees responsible for the cashier, starter and marshal functions." 0 O page 2 KPMG Peat Marwick November 23, 1998 True. As stated above, there are two full -time (40 hour per week) and two part -time (16 hour per week, and 20 hour per week) Starters to cover a seven - day -week operation which opens for business at 06:30 am and closes at 05:30 pm daily. It should be noted that on most days between the hours of 06:30 to 08:30 am and 03:30 to 05:30 pm, there is one Starter on duty. Therefore this individual is require to perform all functions of the Starter's office. d. "One employee serves as the starter /cashier while the other employee performs the duties of the marshal." No comment. e. "Cash register receipts are not required to be presented to obtain golf carts or to play golf." We do not have a golf cart attendant per se. We have golf course groundskeepers doing cart handling work. Their primary function is to stage carts, wash, fuel and return carts to storage. Therefore we do not have an individual available to collect receipts and in turn issue rental carts. The physical location of the cart staging area in proximity to the Starter's Office would deem such activity redundant. Cash register receipts are checked on occasion when the marshal comes across individuals on the course they do not recognize as having registered for play at the Starter's Office. f. "Under these circumstances, it may be possible for the starter to allow golfers to play for free or to pocket cash receipts and not enter it into the cash register." At the close of business, at approximately 02:30 pm when there are two Starters on duty. There is reconciliation of the cash collected compared to the number of golfers, number of monthly cards sold, number of rental carts issued, and any other income collected. g. "Green and cart fees at the Hilo Municipal Golf Course amounted to $835,687 for the fiscal year ending June 30, 1998." The figure presented is the total of all income including the concessionaire rentals. Income from golf operations amounted to $739,000 for this period. 0 0 `. F. ei/: "•. - : as k BUILDING DIVISION DPW ': COUNTY OF HAWAII - 25 AUPUNI STREET - HILO, HAWAII 96720 o KONA OFFICE (808) 327 -3520 `.4' x. N. HILO OFFICE (808) 961 -8331 ( ) November 27, 1998 TO: Connie Kiriu, Legislative Auditor THRU: Jiro A. Sumada, Deputy Chie ngin: er FROM: Wayne Onomura, Division Chi - i SUBJECT: PRELIMINARY DRAFT MANAGEMENT LETTER FISCAL YEAR ENDED JUNE 30, 1998 The comment regarding segregation of duties (one (1) clerk to collect money and another clerk to issue permit) is not only unfeasible and unwarranted but anti -good public services. Due to the lack of manpower, the Building Division, with only two (2) clerks for the Kona Office and the same amount for the Hilo Office, more often than not has only one (1) clerk manning the permit issuance of each office. With the "two -man" concept, issuance of permits cannot be done throughout the workday and issuance of permits (building, plumbing, electrical and sign) will be delayed tremendously. Whenever permits are issued, records and activities would have to reflect properly issued permits. Subsequent to the issuance of permits, copies of the permit application are given to the applicant as well as the area inspector. A permittee then is required to call the area inspector for inspections and approvals for the work to be done. The issued permit basically is a receipt for fees paid. In essence then, the issuance of a permit and the approval of the work to be done as prescribed by the permit are segregated. The control on the permitting process is the inspector. The permit application form, which includes a record of the fees paid, is a three -part form. The customer has one copy; the clerical staff has one copy; and the building inspector receives a copy. The inspector's copy could be included in the end of day reconciliation and then forwarded. No building project would be completed unless the inspector has a copy of the application that was reconciled to the payment. A permit clerk could not take the money, file the application and give someone a permit without being detected when the construction was inspected. 1 r '$8 NOU 2? Pfl 3 36 couNi ' i, 11, COMPREHENSIVE ANNUAL FINANCIAL REPORT E Fiscal Year Ended June 30, 1998 r •. � — rte ..tri *. .. "or COUNTY OF HAWAII Hilo, Hawaii C -6s ,q✓o 0 0 COMPREHENSIVE ANNUAL FINANCIAL REPORT Fiscal Year Ended June 30, 1998 J 4ty.. •ah- y • o . � O ___ OF p , 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 J 0 0 -' COUNTY OF HAWAII Comprehensive Annual Financial Report — For the Fiscal Year Ended June 30, 1998 Table of Contents Page INTRODUCTORY SECTION Letter of Transmittal 1 GFOA Certificate of Achievement 11 Organization Chart 12 List of Elected Officials 13 List of Principal Officials 14 J FINANCIAL SECTION Independent Auditors' Report 15 Glossary of Certain Terms Used in Financial Statements 17 General Purpose Financial Statements: J Combined Balance Sheet - All Fund Types and Account Groups and Discretely Presented Component Unit 20 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types and Expendable Trust Funds 24 — Combined Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual (Budgetary Basis) - General and Special Revenue Fund Types 26 Combined Statement of Revenues, Expenses and Changes in Retained Earnings - Proprietary Fund Type and Discretely Presented Component Unit 28 Combined Statement of Cash Flows - Proprietary Fund Type and Discretely Presented Component Unit 29 Notes to the Combined Financial Statements 31 Supplemental Information: General Fund: Comparative Balance Sheets 65 Comparative Statements of Revenues, Expenditures and Changes in Fund Balances 67 t_ Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Budgetary Basis) 68 0 0 FINANCIAL SECTION (Continued) Page Supplemental Information (continued): — Special Revenue Funds: — Combining Balance Sheet 74 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 76 — Combining Schedule of Revenues, Expenditures and Changes in L Fund Balances - Budget and Actual (Budgetary Basis) 78 Highway Fund - Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Budgetary Basis) 81 — Parking Meter Fund - Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Budgetary Basis) 82 r Sewer Fund - Schedule of Revenues, Expenditures and Changes in — Fund Balance - Budget and Actual (Budgetary Basis) 83 _ Bikeway Fund - Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Budgetary Basis) 84 -J Cemetery Fund - Schedule of Revenues, Expenditures and Changes in — Fund Balance - Budget and Actual (Budgetary Basis) 85 Vehicle Disposal Fund - Schedule of Revenues, Expenditures and Changes in — Fund Balance - Budget and Actual (Budgetary Basis) 86 — Solid Waste Fund - Schedule of Revenues, Expenditures and Changes in — Fund Balance - Budget and Actual (Budgetary Basis) 87 Golf Course Fund - Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Budgetary Basis) 88 — Geothermal Relocation Revolving Fund - Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Budgetary Basis) 89 Beautification Fund - Schedule of Revenues, Expenditures and Changes — in Fund Balance - Budget and Actual (Budgetary Basis) 90 Debt Service Funds: Combining Balance Sheet 91 — Combining Statement of Revenues, Expenditures and Changes in Fund Balances 92 — Capital Projects Funds: Combining Balance Sheet 93 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 94 Capital Projects Fund - Schedule of Appropriations, Expenditures and Encumbrances - Budget and Actual (Budgetary Basis) 95 O O FINANCIAL SECTION (Continued) Supplemental Information (continued): Page Enterprise Funds: Combining Balance Sheet 101 Combining Statement of Revenues, Expenses and Changes in Retained r Earnings (Deficit) 103 Combining Statement of Cash Flows 104 Trust and Agency Funds: Combining Balance Sheet 106 Expendable Trust Funds - Combining Statement of Revenues, Expenditures and Changes in Fund Balances 108 Hawaii County Housing Agency - Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Budgetary Basis) 109 Agency Funds - Combining Statement of Changes in Assets and Liabilities 110 General Long -Term Debt Account Group: Schedule of General Long -Term Debt 115 Schedule of Debt Service Requirements to Maturity for General Obligation Bonds 116 General Fixed Assets Account Group: Schedule of General Fixed Assets by Source 117 Schedule of Changes in General Fixed Assets by Function 118 Schedule of General Fixed Assets by Function and Activity 119 STATISTICAL SECTION L Chart 1 - General Governmental Revenues and Expenditures Comparison 121 Table 1 - General Governmental Expenditures by Function 122 Chart 2 - General Governmental Expenditures by Function 123 Table 2 - General Governmental Revenues by Source 124 Chart 3 - General Governmental Revenues by Source 125 Table 2a - General Governmental Tax Revenues by Source 126 Table 3 - Property Tax Levies and Collections 127 Table 4 - Assessed and Estimated Actual Value of Taxable Real Property 128 Table 5 - Real Property Assessed Values by Classification and Tax Rates 129 Chart 4 - Assessed Value of Real Property 133 0 0 0 STATISTICAL SECTION (Continued) — Page Table 6 - Principal Taxpayers 134 Table 7 - Computation of Legal Debt Margin 135 Table 8 - Ratio of Net Bonded Debt to Assessed Value and Net Bonded Debt Per Capita 136 — Table 9 - Ratio of Annual Debt Service Expenditures for General Obligation Bonded Debt to Total General Governmental Expenditures 137 Table 10 - Demographic Statistics 138 Table 11 - Property Value, Construction and Bank Deposits 139 Table 12 - Miscellaneous Statistical Data 140 r J n 1 1 0 0 INTRODUCTORY SECTION II J r I- r a 0 "45,71. oF, 0 Stephen K. Yamashiro • '- \CWT{ Harry A. Takahashi Mayor �ti�rt� Director s :, S. K Schutte .. J P. . ., �l .. P . ∎ - : Deputy OF County at ji,anntii DEPARTMENT OF FINANCE 25 Aupuni Street, Room 118 • Hilo, Hawaii 96720 -4252 (808) 961 -8234 • Fax (808) 961 -8248 October 23, 1998 _ 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, 1997 to June 30, 1998. This report was prepared by the County's Department of Finance. The accuracy of the financial statements and the completeness and fairness of their presentation are the responsibility of the County government. We believe the enclosed data are complete and accurate in all material respects and are reported in a manner designed to present fairly the financial position and results of operations of the various funds 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, 1998 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 u 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. 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. t-- -1- 0 0 However, the County does not provide such other traditional services as public education, _ hospitals and courts. These services are provided by the State government. r The County of Hawaii consists of the island of Hawaii, 4,038 square miles in size. It is twice as — large as the combined area of all the other inhabited islands in the Hawaiian Archipelago. Since there is no other local or municipal government within the County, there are no overlapping taxes and no overlapping debt. Hawaii County has an elected mayor and a nine- member council. Economic Condition and Outlook The state of Hawaii as a whole has not shared in the economic expansion being enjoyed by the — United States mainland. The County is no exception, being hit hard by Japan's economic woes and the demise of the sugar industry. However, for the third year in a row, the County has led r the state in job creation. Factors contributing to this include thriving tounsm, hotel development and renovation, and growth in retailing. r The city of Hilo on the east side of the island serves as the county seat and the financial center _ for the County. Hilo's infrastructure includes Hilo Harbor, a deep water port, and Hilo International Airport, which is capable of handling fully- loaded wide body aircraft. While the sunny west side of the island is growing more rapidly than the Hilo side, the east side is still home to the bulk of the County's population. The west side is more dependent on the visitor industry. It is home to a number of major hotels and resorts. Kona's Keahole Airport can — accommodate direct flights from mainland and foreign markets. The Big Island 1998 issue of First Hawaiian Bank's Economic Forecast newsletter and the County's Department of Research and Development are the sources for the economic information in this section. Tourism — Record high occupancy levels for west Hawaii hotels and resorts have continued for the second straight year. So far in 1998, eastbound arrivals are up 17% from 1997, and the westbound visitor county is up 5 %. In addition, cruise ships are contributing an estimated $16 million annually to the local economy. Hilo expects 96 port calls in 1998, up from 70 in 1997. Retail — The local retail industry in Hilo continues to be challenged by the arrival of large stores such as Wal -Mart, Office Max and Borders. Consumers are welcoming the shopping options, and local retailers are trying to carve out individual niches to preserve their viability. In Kona, a new waterfront shopping complex will be anchored by the County's first Hard Rock Cafe. Film industry — A network television series is being filmed in west Hawaii for the first time. -- "Wind on Water" will air on NBC in the fall of 1998. Besides the direct impact on the economy from the money spent while filming the series, the show will help to publicize the County as an attractive tourist destination. Other recent film activities include "Baywatch" segments and — commercials, and a feature film is in the planning stages. r Agriculture — The size and diversity of climates in the County make the land well suited to — many types of crops. Trees are being planted on several large tracts of former sugar cane land in an effort to establish a timber industry here. Other land is being used for diversified crops such — as coffee, macadamia nuts, papaya, flowers, and foliage. New crops and products such as kava and herbal extracts are expected to increase in economic importance. -2- O 0 Major Initiatives For the Year During the year, the County focused on fiscal management, road repairs, fire safety and emergency medical services, computer issues, and other issues affecting the quality of' life in the County. Fiscal management — The County again ended the year in good financial condition in spite of private sector economic difficulties and a shrinking real property tax base. Prudent management by the present administration has enabled the County to end the year with a $16.9 million unreserved fund balance in the general fund. Road repairs — The County's emphasis continues to be on using County resources as matching funds to obtain federal ISTEA grants for road and bridge repairs. This leveraging enables the County to stretch its resources and repair many more miles of roads than could be done with only County funds. Fire safety and EMS — Through the Community Development Block Grant program, three new fire trucks were purchased for stations in Pahala, Laupahoehoe, and Hilo. The use of volunteer fire stations in rural areas to supplement regular County forces continues to grow, enabling n country districts to have improved protection and lower fire insurance rates. A north Kohala y coast volunteer fire station was constructed with private funds. All volunteer fire companies are now equipped with pagers for immediate call -out, and with radios for two -way emergency o communications. The Emergency Medical Services program was active during the year. Personnel responded to 11,268 emergency calls, and two new ambulances were placed in service to upgrade the present 20- vehicle fleet. Aeromedical services continued to be provided 12 hours a day, thanks to a continuation of state funding for the service. Year 2000 — The County established a Year 2000 readiness project to ensure that all of its critical computer systems will function properly in the year 2000. All applications running on the main computer system, including the main accounting and payroll systems, have been assessed to determine what modifications are necessary for Year 2000 compliance. Work has begun on assessing the County's smaller computer systems also. Parks and recreation — Continuing its partnership with the community, several park improvements were completed with the help of community groups and volunteers and were placed in service during the year. A national award - winning children's playground was dedicated in west Hawaii. It was constructed with the assistance of over 1,000 community volunteers who helped by donating labor and materials to the project. A new Japanese Tea House was dedicated and will serve as a cultural centerpiece for Hilo. Over $400,000 in private funds were raised for the project. Complying with Americans with Disabilities Act accessibility requirements in facilities and programs was a priority during the year, with restroom renovations completed at several facilities. A County-wide disabilities specialist was hired to assist in making the Summer Fun program accessible to children with disabilities. _3_ 0 O J For the Future — Performance contract — Since the performance contract for the energy retrofit of the County Building has been a success, work is underway to retrofit other County facilities island -wide, ` again using a performance contract to fund the project. Energy cost savings over ten years will go to pay for the cost of the work done. ADA compliance — The County is under two stipulated agreements signed by federal court to — implement provisions of the Americans with Disabilities Act. In the next several years the County will be working on curb cuts and on Parks and Recreation facilities and programs. The County intends to comply with all court- mandated requirements within the established deadlines — for corrective action. r Year 2000 — The County will complete all necessary modifications to computer programs and _. the related validation and testing in the next fiscal year to ensure that the County is ready to enter the new century with all critical systems operational. r' J Financial Information r The management of the County is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the County are protected from loss, theft or misuse and to ensure that adequate accounting data are compiled to allow for preparation of financial statements in conformity with generally accepted accounting principles. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management. Budgetary Control The County maintains budgetary controls to ensure that legal provisions of the annual budget are complied with and that expenditures do not exceed budgeted amounts. 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 capital projects fund. Budgetary control is established at the department level. Formal budgetary integration is employed as a management control device for the general fund, special revenue funds, 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 pnnciples. Intergovernmental revenues are recognized when awarded by the granting agency, encumbrances and unexpended allotments are treated as expenditures for purposes of determining legal compliance with the annual budget, all leases are treated as operating leases, and accounts payable are not accrued. The County also maintains an encumbrance accounting system as one technique of accomplishing budgetary control. Encumbrances outstanding at fiscal year end are reported as reservations of fund balances and do not constitute expenditures or liabilities because they will — -4- 0 0 `— 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. General Government Functions 0 The following is a summary of operations for the fiscal year ended June 30, 1998, including the general fund, special revenue funds, and debt service fund. Revenues - Revenues in fiscal 1998 totaled $159,097,999, a 3.4% increase over 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 1997 (Decrease) — Taxes and assessments $97,332,591 61.2% $1,208,459 1.3% Licenses and permits 6,351,072 4.0 227,565 3.7 7 Intergovernmental 38,892,594 24.4 2,876,060 8.0 J Charges for current services 8,885,127 5.6 1,089,292 14.0 Fines and forfeitures 366,804 0.2 20,368 5.9 Interest and penalties 5,880,834 3.7 21,302 .4 — Miscellaneous 1,388,977 .9 (273,3761 (16.4) Total $159.097.999 100.0% $5,169,670 3.4% J r Licenses 4% L _ Taxes 61% n .pn6 ' h y es w, Intergovernmental x t:* ,fi. 4 1 l -. Miscellaneous 1% Interest/penalties 4% Charges for services 6% J 1998 Revenues by Source r _ The County's largest single source of revenues, taxes and assessments, showed a modest increase during the year and contributed 61.2% 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 $931,000 more than the prior fiscal year, and accounted for most of the increase during the year. Assessments are based on 100% of fair market value, and reflect r declining property values county-wide. Tax rates remained unchanged from the prior year. Charges for services increased 14.0% to $8,885,127 due to an increase in sewer rates during the year. -5- 0 0 — Miscellaneous 10 = i I Interest & penalties 0 l Fines and forfeitures 0 1 1 Charges for services 0 — Intergovernmental 11 r Licenses & permits 0 '£ � ,+ ^nC *`Yn3� . �: f ..... '?!f .. Taxes ° O O O O O O O O O O 0 0 0 0 0 0 0 0 0 0 r- 0 0 0 v i CO ° cc m cc ° o — ❑ 1998 ■ 1997 — ($000) Comparison of Revenues by Source - FY 1997 and 1998 Expenditures - Expenditures for general government purposes in the fiscal year ended June 30, 1998 totaled $158,376,171, an increase of 3.2% over the preceding period. The amounts of expenditure by major functions and changes from last year follow: Increase Percent of Percent (Decrease) Increase u Function Amount of Total From 1997 (Decrease) Public safety $ 55,673,306 35.2% $1,283,666 2.4% U General govemment 20,511,463 12.9 893,352 4.6 Highways and streets 6,620,657 4.2 (362,791) (5.2) — Sanitation 12,082,365 7.6 365,343 3.1 Health, education, welfare 5,010,651 3.2 3,749 .1 — Culture and recreation 11,800,251 7.5 338,401 3.0 ., Pension and retirement contributions 14,044,134 8.9 (251,313) 1.8 Health fund 9,437,709 5.9 749,862 8.6 — Miscellaneous 3,364,238 2.1 417,620 14.2 — Capital outlay 5,603,234 3.5 1,144,698 25.7 Debt service 14,228,163 9.0 373,247 2.7 — Total $158,376,171 100.0% $4,955,834 3.2% — `. -6- -- V o 0 _ Capital outlay 3% Miscellaneous 2% Debt service 9% Health fund 6% .4 Pensions 9% s la* Public Safety 35% Culture /rec 4 General i' % ° Vitt Atertidl 1 -. 44 "g HEW 3 govt 13% � % � ' .a _ ' ¢ - Sanitation 8% E Highways & streets 4% L • 1998 Expenditures by Function r U J Debt servicer Capital outlay • r Misc .r Health fund ' Pension/retire Culture & recreation HEW r Sanitation r Highways & streets ES General govt Public safety o _..... 0 0 0 0 0 00 o o o o 0 0 O N Q M R ( ( ❑ 1998 • 1997 Comparison of Expenditures by Function - FY 1997 and 1998 r 7 _ O a • Salaries and wages for public safety increased during the year due to collective bargaining pay increases for the two bargaining units representing police and fire employees. The expenditure for capital outlay increased $1.1 million from 1997 for a 25.7% increase. The amount went up due to the expenditure of $2.1 million in federal HOME program grant funds as the County works to expend grants within allowable time constraints. — General Fund Balance The unreserved fund balance for the general fund amounted to $16.9 million at June 30, 1998. Of this amount, $15.5 million was designated for various purposes, including $14.0 million that was projected and anticipated as revenue to finance the ensuing fiscal year 1999 operating budget. The balance of $1.4 million was unreserved and undesignated. Enterprise Operations _ Kulaimano Elderly Housing Project - The operating revenue of this fund totaled $234,586 during the fiscal year, a decrease of $2,740 from the prior year. Operating expenses were $378,769, up from $148,490 last year. Interest paid on long -term debt exceeded interest earned on investments by $48,659. Net loss for this fiscal year was $193,108. Ouli Ekahi Affordable Housing Project — The operating revenue of this fund was $207,974, up from $190,911 in the prior year. After operating expenses of $218,055 and interest income of $776, the net loss for the year was $9,305. Component Unit - Department of Water Supply J Water sales totaled $20,365,500, an increase of $2,587,391 over the prior year. Operating expenses of $19,618,183 are $1,707,999 higher than last year, resulting in operating income of r $747,317. Nonoperating revenues (primarily interest earnings) net of nonoperating expenses -- (primarily interest expense) totaled $479,117, resulting in net income of $1,226,434. r Pension Plan All full -time employees of the County participate in the Employees' Retirement System of the — State of Hawaii, a cost - sharing, multiple- employer defined benefit public employee retirement system. r Debt Administration The County issued general obligation bonds to agencies of the federal government on behalf of _ the component unit in the amount of $118,350 during the year. J The County has drawn down on eleven 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, 1998 (net of repayments) totaled $29,030,743. The total debt outstanding at June 30, 1998 was $163,374,430 (including debt of the enterprise fund and the component unit). Under current State statutes, the County's general obligation bonded debt issuances are subject to a legal limitation of 15% of total assessed value of real -8- —, O G property. As of June 30, 1998, the County's net general obligation bonded debt of $133,641,322 was well below the legal limit of $1,523,535,385. Cash Management r- Cash temporarily idle during the year was invested in demand deposits, certificates of deposit and repurchase agreements. The average yield on investment was 5.24 %. The County's policy is to minimize credit and market risks while maintaining a competitive yield on its portfolio. Accordingly, with the exception of $257,115 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 a County- 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 L The Hawan County Charter requires an annual audit by independent certified public accountants. KPMG Peat Marwick LLP was selected by the County Council to perform the audit. Employee Union Contracts County employees are members of seven different bargaining units. Four bargaining units have (^ contracts which expired June 30, 1997 and have been extended indefinitely. Two bargaining L units have contracts which expire June 30, 1999, and one has a contract which expired June 30, 1995 and was extended to April 30, 1998. This last contract covers blue collar government workers statewide. The union contends that a tentative agreement was reached early in 1998, but it was not ratified by the state legislature or the Hawaii County Council. The union is claiming in court that this agreement should take effect anyway, but the County is contesting that position and does not recognize that there was a tentative agreement. If the union prevails in court, the new contract will cover the period July 1, 1995 through June 30, 1999, and the cost to the County in wages under the agreement will be in excess of $2 million. Certificate of Achievement The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the County of Hawan for its comprehensive annual financial report for the fiscal year ended June 30, 1997. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized comprehensive annual financial report, whose contents -9- 0 0 r — ^1 conform to program standards. Such CAFR must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe our current report continues to conform to the Certificate of Achievement program requirements, and we are submitting it to GFOA. Acknowledgments Il 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. 1 I RA/LL/. obicvet r HARRY A. TAKAHASHI _ Director of Finance J r L r J - 10 - r 0 0 U Certificate of Achievement for Excellence in Financial Reporting Presented to County of Hawaii For its Comprehensive Annual r Financial Report L for the Fiscal Year Ended June 30, 1997 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. A urzub /MID STUB "l \ - — w 210 cmraarox s President r MEAL it must U/ t / / ` 7 1 /� (V� Executive Director r L - 11 - 0 0 J County of Hawaii Organization Chart County Electorate County Council I Mayor Prosecuting Attorney _' County Clerk — Office of the Mayor Managing Director Safety Coordinator Departments and agencies Agencies under Departments under under direct supervision administrative supervision commissions and of the Mayor and/or of the Mayor: administrative supervision Managing Director: of the Mayor: Civil Defense — Corporation Counsel Office of Aging Civil Service Finance Police Planning Liquor Control Research & Development Housing & Community (— Public Works Development Parks & Recreation Water Supply Fire Department (semi- autonomous) Mass Transportation — r C -12- -- 0 0 r County of Hawaii -- Elected Officials r Administrative Officers (Term: 1996 -2000) Stephen K. Yamashiro Mayor Jay T. Kimura Prosecuting Attorney County Council (Term: 1996 -1998) James Y. Arakaki Chair Al Smith Vice Chair Aaron S.Y. Chung Member — Bobby Jean Leithead -Todd Member r John Ray Member _ Joseph Reynolds Member John Santangelo, Jr. Member J. Curtis Tyler, III Member Dominic Yagong Member 9 r L. 9 0 - 13- 0 0 Principal Officials June 30, 1998 — r, County Clerk Donald Ikeda 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 Nelson Tsuji Chief Engineer Donna Fay K. Kiyosaki — Director of Parks and Recreation George Yoshida -- Manager, Department of Water Supply Milton Pavao Civil Defense Administrator Harry Kim Director of Liquor Control Janice A. Pakele L 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 14- 0 0 n FINANCIAL SECTION L 1 - nninn 0 0 KPMG Peat Marwick LAP PO Box4150 Honolulu, HI 96812 -4150 L L Independent Auditors' Report To the Chair and Members of the County Council County of Hawaii L State of Hawaii: r 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, 1998, 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 the significant estimates E made by management, as well as evaluating the overall financial statement presentation. We believe that our L audit provides a reasonable basis for our opinion. L 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, 1998, 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. L In accordance with Government Auditing Standards, we have also issued our report dated October 23, 1998 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. L (— -15 nnnn .. _ . 0 0 - 1 J 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 fisted J in the table of contents under supplemental information are presented for purposes of additional analysis and are not a required part of the general purpose financial statements of the County of Hawaii, State of Hawaii. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly presented in all matenal 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. express no opinion — thereon 7.4CeitVeteitee AA? Honolulu, Hawaii L' October 23, 1998 J r v 1 1 1 1 1 J L 16- L • 0 0 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 a self- 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 to make expenditures and to incur obligations for specific purposes. An appropriation is usually limited in amount and as to the time when it 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 - 1 expenses and capital outlays. Expenditures are distinguished from encumbrances in that J 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 of an appropnation. Except for continuing or indeterminate appropriations, an appropriation is made for a certain period of time. At the end of this penod, any unexpended or unencumbered balance thereof is returned to fund balance, unless otherwise provided by law. T L r L - 17- 0 0 J J 1 J This page intentionally left blank. r- - 1 8 - 0 0 • GENERAL PURPOSE FINANCIAL STATEMENTS 1 L r 1 - 19- 0 0 COUNTY OF HAWAII — Combined Balance Sheet All Fund Types and Account Groups and Discretely Presented Component Unit — J June 30, 1998 (With comparative totals for June 30, 1997) — Proprietary Governmental Fund Types Fund Type _ Special Debt Capital — General Revenue Service Projects Enterprise Assets and Other Debits i Cash and investments (notes 3 and 16): ;. Cash and cash equivalents $ 5,856,536 $11,831,173 $ 291,837 $ 8,021,684 $ 215,046 Investments 22,142,657 -- 19,877,177 33,100,000 500,000 Imprest and change funds 25,670 2,000 -- -- 150 Receivables, net of allowance for doubtful accounts: — Trade -- 2,538,435 -- -- 11,968 Real property taxes 11,472,887 -- -- -- -- Due from other governments 2,070,917 7,971 -- 1,889,361 -- — Due from other funds (note 4) 1,810,387 111,991 -- 211,073 -- Other 300,728 175,872 -- 2,015 1,988 — Inventories 2,030,118 -- -- -- -- — Prepaid expenses -- -- -- -- 1,798 Restricted assets (note 3): — Cash and cash equivalents -- -- -- 224,727 205,676 Investments -- -- -- -- -- Property and rights held under deferred — compensation plan (note 15) -- -- -- -- -- Fixed assets, net of accumulated depreciation where — applicable (note 5 and 16) -- -- -- -- 1,568,466 Deferred charges -- -- -- -- -- Amount available in debt service funds -- -- -- -- -- — Amount to be provided for retirement of general long -term debt -- -- -- -- -- — — Total assets and other debits $45,709,900 $14,667,442 $20,169,014 $43,448,860 $2,505,092 J See accompanying notes to combined financial statements. r J L - 20 - r -t 0 0 r L — 1 Fiduciary Totals - Component Fund Types Account Groups Primary Unit Totals - General Government Department Reporting Entity — Trust and Long -Term General (Memorandum of (Memorandum Only) Agency Debt Fixed Assets (Only) Water Supply June 30, 1998 June 30, 1997 $10,862,964 $ -- $ -- $ 37,079,240 $ 235,636 $ 37,314,876 $ 38,533,868 1,314,820 -- -- 76,934,654 1,759,302 78,693,956 85,329,944 rl 100 -- -- 27,920 13,617 41,537 39,751 -- -- -- 2,550,403 1,870,863 4,421,266 3,629,919 J -- -- 11,472,887 11,472,887 13,003,368 -- 84,774 4,053,023 4,053,023 12,729,171 — 3,277,263 -- -- 5,410,714 -- 5.410,714 7,088,886 111,615 -- -- 592,218 205,267 797,485 598,219 -- -- -- 2,030,118 449,343 2,479,461 2,482,398 -- -- -- 1,798 15,009 16,807 17,727 1 1,400,000 -- -- 1,830,403 -- 1,830,403 1,845,560 — -- -- -- -- 25,283,680 25,283,680 10,753,221 -- -- -- -- -- -- 26,576,092 r -- -- 294,329,967 295,898,433 142,741,508 438,639,941 421,928,554 -- -- -- -- 5,210,767 5,210,767 4,759,634 — -- 19,836,866 -- 19,836,866 -- 19,836,866 18,429,799 -- 176.879,855 -- 176,879,855 -- 176,879,855 175,530,474 $17,051,536 $196,716,721 $294,329,967 $634,598,532 $177,784,992 $812,383,524 $823,276,585 (Continued) 1 1 1 - 21- 0 0 COUNTY OF HAWAII — — Combined Balance Sheet All Fund Types and Account Groups and Discretely Presented Component Unit — June 30, 1998 (With comparative totals for June 30, 1997) — Proprietary Governmental Fund Types Fund Type — Special Debt Capital General Revenue Service Projects Enterprise Liabilities, Equity and Other Credits Liabilities: — Warrants payable $ 2,884,711 $ 591,889 $ -- $ 1,224,397 $ 12,909 Accounts payable 1,198,300 928,190 -- 1,977,260 522 Due to other funds (note 4) 2,956,125 1,330,390 -- 2,757 -- Due to federal government - arbitrage rebate 232,851 -- -- -- -- —' Accrued liabilities -- 35,401 234,015 -- 7,729 Customer advances and deposits -- -- -- -- -- Customer deposits payable from restricted assets -- -- -- -- 26,390 Deferred revenue (note 6) 12,264,695 2,688,175 -- 355,086 377 Bonds payable (notes 9 and 16) -- -- -- -- -- Notes payable (note 9) -- -- -- -- 1,159,837 '— Other general long -term debt (notes 7, 8, 9, 13, 15 and 16) -- -- -- -- -- Assets held for the benefit of improvement districts -- -- -- -- -- Other 718,086 -- -- 170,351 -- — Deferred compensation benefits payable (note 15) -- -- -- -- -- Total liabilities 20,254,768 5,574,045 234,015 3,729,851 1.207,764 Equity and other credits. Investments in general fixed assets -- -- -- -- -- n Contributed capital (notes 10 and 16) -- -- -- -- 955,663 _ Retained earnings (notes 9 and 12): Reserved -- -- -- -- 165,288 — Unreserved -- -- -- -- 176,377 Fund balances (note 12): Reserved 8,543,602 2,685,970 19,934,999 24,174,178 -- r Unreserved. j Designated 15,459,428 3,749,567 -- 4,600,610 -- Undesignated 1,452,102 2,657,860 -- 10,944,221 -- Total equity and other credits 25,455,132 9,093,397 19,934,999 39,719,009 1,297,328 — Total liabilities, equity and other credits $45,709,900 $14,667,442 $20,169,014 $43,448,860 $2,505,092 r See accompanying notes to combined financial statements. — -22- r - 0 0 — (Concluded) Fiduciary Totals - Component 1 Fund Types Account Groups Primary Unit Totals - J General Government Department Reporting Entity Trust and Long -Term General (Memorandum of (Memorandum Only) Agency Debt Fixed Assets (Only) Water Supply June 30, 1998 June 30, 1997 r i $ 1,524,085 $ -- $ -- $ 6,237,991 $ 384,758 $ 6,622,749 $ 6,826,920 — 4,893 -- -- 4,109,165 814,163 4,923,328 3,144,478 1,121,442 -- -- 5,410,714 -- 5,410,714 7,088,886 r -- -- -- 232,851 -- 232,851 136,026 — 1,595,593 -- -- 1,872,738 1,653,130 3,525,868 3,982,733 69,791 -- -- 69,791 215,446 285,237 238,556 -- -- -- 26,390 8,924,701 8,951,091 8,493,465 -- -- -- 15,308,333 -- 15,308,333 16,644,433 -- 120,398,500 -- 120,398,500 12,785,350 133,183,850 138,941,500 — -- -- -- 1,159,837 -- 1,159,837 1,171,731 -- 76,318,221 -- 76,318,221 -- 76,318,221 68,546,273 ri 6,726,939 -- -- 6,726,939 -- 6,726,939 5,100,071 — -- -- -- 888,437 -- 888,437 861,443 -- -- -- -- -- -- 26,576,092 11,042,743 196,716,721 -- 238,759.907 24,777,548 263,537,455 287,752,607 r -- -- 294,329,967 294,329,967 -- 294,329,967 281,938,486 L_. -- -- -- 955,663 108,285,533 109,241,196 107,955,480 — -- -- -- 165,288 18,192,456 18,357,744 2,444,384 -- -- -- 176,377 26,529,455 26,705,832 37,744,781 — 2,654,349 -- -- 57,993,098 -- 57,993,098 54,062,338 562,693 -- -- 24,372,298 -- 24,372,298 27,548,893 2,791,751 -- -- 17,845,934 -- 17,845,934 23,829,616 ri 6,008,793 -- 294,329,967 395,838,625 153,007,444 548,846,069 535,523,978 r $17,051,536 $196,716,721 $294,329,967 $634,598,532 $177,784,992 $812,383,524 $823,276,585 -, - 0 0 COUNTY OF HAWAII — Combined Statement of Revenues, Expenditures and Changes in Fund Balances — All Governmental Fund Types and Expendable Trust Funds — For the Fiscal Year Ended June 30, 1998 (With comparative totals for the fiscal year ended June 30, 1997) — Governmental Fund Types — Special Debt Capital General Revenue Service Projects — Revenues: — Taxes and assessments $87,420,313 $9,912,278 $ -- $ -- Licenses and permits 3,268,071 3,083,001 -- -- Intergovernmental 38,437,063 455,531 -- 3,482,093 Charges for current services 1,660,651 7,224,476 -- -- Fines and forfeitures 366,804 -- -- -- — Rents 127,367 -- -- -- interest and penalties 4,948,075 -- 932,759 7,391 — Miscellaneous 1,027,314 234,296 -- 467,670 Total revenues 137,255,658 20,909,582 932,759 3,957,154 Expenditures: Current: r- General government 20,481,226 30,237 -- -- Public safety 53,146,612 2,526,694 -- 974,005 — Highways and streets 1.263,890 5,356,767 -- 4,553,000 Sanitation -- 12,082,365 -- 4,467,424 Health, education and welfare 5,006,905 3,746 -- -- ,`, Culture and recreation 10,994,518 805,733 -- 2,091,260 Pension and retirement contributions (note 15) 12,325,588 1,718,546 -- -- -- 1 Health fund 8,591,942 845,767 -- -- Miscellaneous 2,800,072 564,216 -- 11,283 — Capital outlay 5,603,234 -- -- -- Debt service: Interest and finance charges 30,644 -- 7,724,699 -- L. Principal retirement 49,824 -- 6,422,996 -- Total expenditures 120,294,405 23,934,071 14,147,695 12,096,972 ^ Excess (deficiency) of revenues over expenditures 16,961 253 (3,024,489) (13,214,936) (8,139,818) — Other financing sources (uses): — Increase in capital lease obligations -- -- -- -- Sale of general fixed assets 17,385 -- -- -- Intergovernmental loans -- -- -- 1,404,908 Proceeds from sale of bonds -- -- -- -- Operating transfers in 1,153,627 7,605,583 15,372,771 2,936,366 _ Operating transfers out (23,066,109) (2,984,479) (932,759) (85,000) Total other financing sources (uses) (21,895,097) 4,621,104 14,440,012 4,256,274 Excess (deficiency) of revenues and other sources over expenditures and other uses (4,933,844) 1,596,615 1,225,076 (3,883,544) — Fund balances at beginning of year 30,339,071 7,496,782 18,709,923 43,602,553 Increase in reserve for inventories 49,905 -- -- -- — Fund balances at end of year $25,455,132 $9,093,397 $19,934,999 $39,719,009 — See accompanying notes to combined financial statements. - 24- r 0 0 r Fiduciary Totals — Fund Type (Memorandum Only) Expendable Trust 1998 1997 r $ -- $97,332,591 $96,124,132 • -- 6,351,072 6,123,507 — 7,902,808 50,277,495 52,098,957 -- 8,885,127 7,795,835 -- 366,804 346,436 -- 127,367 83,808 214,890 6,103,115 6,068,940 646,643 2,375,923 2,066,184 8,764,341 171,819,494 170,707,799 "1 J 9,775 20,521,238 26,230,653 -- 56,647,311 57,052,237 r 11,173,657 13,703,685 -- 16,549,789 20,813,987 — 7,816,144 12,826,795 13,187,496 -- 13,891,511 16,800,981 ^ 219,790 14,263,924 14,367,009 -- 9,437,709 8,687,847 -- 3,375,521 2,973,571 —, -- 5,603,234 4,458,536 — 46 7,755,389 7,630,122 2,311 6,475,131 6,228,834 r 8,048,066 178,521,209 192,134,958 — 716,275 (6,701,715) (21,427,159) _ -- -- 469,210 -- 17,385 14,598 — -- 1,404,908 12,092,855 -- -- 15,098 -- 27,068,347 25,078,142 -- (27,068,347) (25,078,142) — -- 1,422,293 12,591,761 I-1 716,275 (5,279,422) (8,835,398) 5,292, 518 105,440, 847 113,874,807 — -- 49,905 401,438 r $6,008,793 $100,211,330 $105,440,847 r, -25- 0 0 COUNTY OF HAWAII -, Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual (Budgetary Basis) General and Special Revenue Fund Types - For the Fiscal Year Ended June 30, 1998 General Fund Special Revenue Funds _ Variance - Variance - Favorable Favorable - Budget Actual (Unfavorable) Budget Actual (Unfavorable) Revenues: - Taxes and assessments $83,484,500 $87,420,313 $ 3,935,813 $9,756,438 $9,912,278 $155,840 _ Licenses and permits 3,454,611 3,268,071 (186,540) 2,946,938 3,083,001 136,063 Intergovernmental 37,779,576 36,977,776 (801,800) 498,200 455,657 (42,543) - Charges for current services 1,658,100 1,660,651 2,551 8,187,074 7,224,476 (962,5981 - Fines and forfeitures 783,500 366,804 (416,696) -- -- -- Rents 188,500 127,367 (61,133) -- -- -- Interest and penalties 3,500,000 4,888,466 1,388,466 -- -- -- Miscellaneous 2,525,115 2,656,282 131,167 188,300 234,296 45.996 - Total revenues 133,373,902 137,365,730 3,991,828 21,576,950 20,909,708 (667 - Expenditures: - Current: General government 22,336,402 20,393,675 1,942,727 142,577 130,666 11,911 - Public safety 56,824,901 53,419,738 3,405,163 3,189,846 2,835,510 354,336 Highways and streets 1,356,516 1,326,357 30,159 7,830,846 6,280,156 1,550,690 Sanitation -- -- -- 14,898,800 12,202,328 2,696,472 Health, education and welfare 5,273,765 5,055,203 218,562 12,000 3,746 8,254 Culture and recreation 11,569,667 10,977,389 592,278 797,183 768,551 28,632 - Pension and retirement contributions 12,331,618 12,325,588 6,030 1,876,582 1,718,546 158,036 Health fund 8,664,233 8,591,942 72,291 850,751 845,768 4,983 n Miscellaneous 4,875 _04 2,807,890 2,067,314 2,103,618 621,264 1,482,354 u Capital outlay 3,172,001 3,172,001 -- -- -- -- r Total expenditures 126,404,307 118,069,783 8,334,524 31,702,203 25,406,535 6,295,668 Excess (deficiency) of revenues over expenditures 6,969,595 19,295,947 12,326,352 (10,125,253) (4,496,827) 5,628,426 _, Other financing sources (uses): - Operating transfers in 1,153,919 1,153,627 (292) 8,697,740 7,605,583 (1,092,157) Operating transfers out (25,836,854) (24,677,695) 1,159,159 (3,144,056) (2,984,479) 159.577 - Total other financing sources (uses) (24,682,935) (23,524,068) 1,158,867 5,553,684 4,621,104 (932,580) _, Excess (deficiency) of revenues and other sources over expenditures and other uses (17,713,340) (4,228,121) 13,485,219 (4,571,569) 124,277 4,695,846 _ Unbudgeted self - insurance activities -- 59,609 59,609 -- -- -- r Fund balances at beginning of year 30,339,071 30,339,071 -- 7,496,782 7,496,782 -- Fund balances at end of year $12,625,731 $26,170,559 $13,544,828 $2,925,213 $7,621,059 $4,695,846 r See accompanying notes to combined financial statements. -26- r, 0 0 — Totals _ (Memorandum Only) Variance - Favorable Budget Actual (Unfavorable) r - $93,240,938 $97,332,591 $ 4,091,653 6,401,549 6,351,072 (50,477) - 38,277,776 37,433,433 (844,343) 9,845,174 8,885,127 (960,047) 783,500 366,804 (416,696) 188,500 127,367 (61,133) 3,500,000 4,888,466 1,388,466 - 2,713,415 2,890,578 177,163 j 154,950,852 158,275,438 3,324,586 - 22,478,979 20,524,341 1,954,638 _ 60,014,747 56,255,248 3,759,499 9,187,362 7,606,513 1,580,849 • 14,898,800 12,202,328 2,696,472 5.285,765 5,058,949 226,816 - 12,366,850 11,745,940 620,910 14,208,200 14,044,134 164,066 9,514,984 9,437,710 77,274 6,978,822 3,429,154 3,549,668 3,172,001 3,172,001 -- 158,106.510 143.476,318 14,630,192 - (3,155,658) 14,799,120 17,954,778 — 9,851,659 8,759,210 (1,092,449) - (28,980,910) (27,662,174) 1,318,736 - (19,129251) (18,902,964) 226,287 - (22,284,909) (4,103,844) 18,181,065 59,609 59,609 37,835,853 37,835,853 -- $15,550,944 $33,791,618 $18,240,674 n - 0 0 0 J 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, 1998 (With comparative totals for the fiscal year ended June 30, 1997) - Proprietary Component - Fund Type Unit Totals - Department Reporting Entity of Water (Memorandum Only) _ Enterprise Supply 1998 1997 Operating revenues: Water sales $ -- $20,365,500 $20,365,500 $17,778,109 Rental receipts from tenants 282,341 -- 282,341 266,206 Rental subsidy from federal government - HUD 153,327 -- 153,327 156,332 Miscellaneous 6,892 -- 6,892 5,699 - Total operating revenues 442,560 20,365,500 20,808,060 18,206,346 Operating expenses: Power and pumping -- 6,948,033 6,948,033 6,514,098 - Utilities 51,692 -- 51,692 33,929 General and administration 159,863 2,903,204 3,063,067 2,648,182 Maintenance and repairs 261,664 1,899,119 2,160,783 1,991,469 _ Customers' accounting and collecting -- 850,581 850,581 892,228 Purification -- 979,328 979,328 788,789 r Transmission and distribution -- 720,979 720,979 703,068 Source of supply -- . 78,313 78,313 58,804 - Lease expense 82,207 -- 82,207 76,226 Depreciation 41,398 5,238,626 5,280,024 4,551,126 Total operating expenses 596,824 19,618,183 20,215,007 18,257,919 Operating income (loss) (154,264) 747,317 593,053 (51,573) Nonoperating revenues (expenses): - Interest income 34,135 1,118,592 1,152,727 1,139,567 Other revenue - 90,891 90,891 146,887 Interest on long -term debt (82,018) (728,658) (810,676) (807,127) Other expenses -- (12,446) (12,446) (12,729) - Gain (loss) on disposal of fixed assets (266) 10,738 10,472 (274,756) Total nonoperating revenues (expenses) (48,149) 479,117 430,968 191,842 _ Net income (loss) (202,413) 1,226,434 1,024,021 140,269 r Add depreciation on contributed utility plant -- 3,850,390 3,850,390 3,534,325 Increase (decrease) in retained earnings (202,413) 5,076,824 4,874,411 3,674,594 Retained earnings at beginning of year 544,078 39,645,087 40,189,165 36,514,571 Retained earnings at end of year $ 341, 665 $44, 721,911 $45,063,576 $40,189,165 _. See accompanying notes to combined financial statements. r _ 28- L 0 0 COUNTY OF HAWAII — Combined Statement of Cash Flows Proprietary Fund Type and Discretely Presented Component Unit L For the Fiscal Year Ended June 30, 1998 (With comparative totals for the fiscal year ended June 30, 1997) r Proprietary Component Fund Type Unit Totals - Department Reporting Entity of Water (Memorandum Only) — Enterprise Supply 1998 1997 - Cash flows from operating activities: Cash received from customers $ -- $20,750,001 $20,750,001 $17,934,049 T Cash received from tenants 287,484 -- 287,484 268,359 — Cash received from federal government - HUD 153,327 -- 153,327 156,332 Cash payments to suppliers for goods and services (563,064) (10,157,885) (10,720,949) (9,657,556) - Cash payments to employees for services -- (4,513,418) (4,513,418) (4,220,279) Net cash provided by (used in) operating activities (122,253) 6,078,698 5,956,445 4,480,905 Cash flows from capital and related financing activities: — Principal paid on Long -term debt (11,894) (860,500) (872,394) (855,156) Proceeds from bond issue -- 118,350 118,350 -- Interest paid on long -term debt (82,018) (733,992) (816,010) (806,462) Proceeds from sale of fixed assets -- 17,272 17,272 27,482 Acquisition and construction of capital assets (6,427) (6,438,834) (6,445,261) (8,431,884) Capital contributions -- 1,523,504 1,523,504 1,891,006 — Net cash used for capital and related financing activities (100,339) (6,374,200) (6,474,539) (8,175,014) Cash flows from investing activities: — Purchase of investments (1,500,000) (82,140,840) (83,640,840) (78,787,202) Proceeds from sale and maturities of investments 1,500,000 81,400,839 82,900,839 81,419,288 Interest on investments 34,757 1,105,943 1,140,700 1,158,498 — Net cash provided by investing activities 34,757 365,942 400,699 3,790,584 0 Net increase (decrease) in cash and cash equivalents (187,835) 70,440 (117,395) 96,475 Cash and cash equivalents at beginning of year 608,707 178,813 787,520 691,045 Cash and cash equivalents at end of year $420,872 $ 249,253 $ 670,125 $ 787,520 (Continued) c 1 J „1 - 29 - J 0 0 • COUNTY OF HAWAII _ Combined Statement of Cash Flows _ Proprietary Fund Type and Discretely Presented Component Unit r-, For the Fiscal Year Ended June 30, 1998 (With comparative totals for the fiscal year ended June 30, 1997) — Proprietary Component — Fund Type Unit Totals - Department Reporting Entity of Water (Memorandum Only) _ Enterprise Supply 1998 1997 Reconciliation of operating income (loss) to net cash provided by (used in) operating activities: Operating income (loss) ($154,264) $747,317 $593,053 ($51,573) — Adjustments to reconcile operating income (loss) to net — cash provided by (used in) operating activities: Depreciation 41,398 5,238,626 5,280,024 4,551,126 Provision for uncollectible accounts -- 114,953 114,953 146,694 (Increase) decrease in trade accounts receivable (4,262) (205,971) (210,233) 264,585 (Increase) decrease in other receivables (303) -- (303) 399 .- (Increase) decrease in inventory — 52,842 52,842 (92,311) (Increase) decrease in prepaid expenses 619 301 920 (7,734) —' Increase (decrease) in warrants payable (3,542) (311,625) (315,167) 116,660 — Decrease in accounts payable (1,422) (32,581) (34,003) (834,389) Increase (decrease) in accrued liabilities (3,293) 474,836 471,543 389,427 — Increase (decrease) in customer deposits payable 2,969 — 2,969 (2,007) Increase (decrease) in deferred revenue (153) -- (153) 28 Total adjustments 32,011 5,331,381 5,363,392 4,532,478 Net cash provided by (used in) operating activities ($122,253) $6,078,698 $5,956,445 $4,480,905 — Noncash capital activities: During the fiscal years ended June 30, 1998 and 1997, the Department of Water Supply received infrastructure valued at $3,612,602 and $3,140,106, respectively, as contributions in aid of construction. See accompanying notes to combined financial statements. L_ - 30 - r L 0 0 COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1998 — 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 critena in GASB Statement No. 14 for inclusion in the reporting entity are excluded from the County's general purpose financial statements. o 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 government; public safety; highways and streets; sanitation; health, education and welfare; culture and recreation; pension and retirement contributions; health fund; miscellaneous; capital outlay; and debt service. The State of Hawaii assumes full responsibility for several _ major functions usually performed by local governments, including education, welfare, health and judicial functions. There are no separate city, county or township governments nor any school districts, special districts, authorities or public corporations with overlapping authority. GASB Statement No. 14 defines component units as legally separate organizations for which the elected officials of the primary government are financially accountable. "Financial accountability" is the level of accountability that exists if a primary government appoints a voting majority of an organization's governing board and is either able to impose its will on that organization or there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the primary government. A primary government has the ability to impose its will on an organization if it can significantly influence the programs, projects, activities or level of services performed or provided by the organization. An organization has a financial benefit or burden relationship with the primary government if any one of three conditions exist: (1) The primary government is legally entitled to or can otherwise access the organization's resources; (2) The primary government is legally obligated or has otherwise assumed the obligation to finance the deficits of, or provide financial support to, the organization; or (3) The pnmary government is obligated in some manner for the debt of the organization. As required by generally accepted accounting pnnciples 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 -31- 1 0 0 r— u COUNTY OF HAWAII Notes to the Combined Financial Statements — June 30, 1998 1 component unit is included in the County's reporting entity because of its financial relationship with the County. Discretely Presented Component Unit The component unit column in the 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's Charter. Although the County does not have the authonty 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 of self - 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. Governmental resources are allocated to and accounted for in individual funds 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 - Governmental funds are those through which most governmental functions of the County are financed. The acquisition, use and balances of the r 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 govemmental fund types: _ General 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. - 32 - 0 0 COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1998 Special 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. Capital 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 (GASB) 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 penodic determination of revenues earned, expenses incurred and/or net income is appropriate for capital maintenance, public policy, management control, accountability or other purposes. Fiduciary Fund Types - Fiduciary funds are used to account for assets held by the County 1 in a trustee capacity or as an agent for individuals, private organizations, other governmental units and/or other funds. The following are the County's fiduciary fund types: r- Trust 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 -33- J 0 0 COUNTY OF HAWAII r Notes to the Combined Financial Statements -- r June 30, 1998 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: General Long -Term Debt Account Group - This account group is established to account for all long -term liabilities that will be financed from governmental funds. Long -term liabilities of the enterprise funds are accounted for in those funds. General Fixed Assets Account 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. — Modified Accrual Basis - The modified accrual basis of accounting is followed by the — County's governmental 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 generally not measurable until actually received. Real property taxes levied for the current year and State Revolving Fund loan proceeds are considered available when collected. In applying the susceptible to accrual concept to intergovernmental revenues, the legal and — contractual requirements of the numerous individual programs are used as guidance. There are essentially two types of these revenues. In one, monies must be expended on the specific 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 -34- 0 0 COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1998 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 a potential revenue does not meet both the "measurable" and "available" criteria for recognition in the current period. In subsequent periods, when both revenue recognition critena are met, the liability for deferred revenue is removed from the combined balance sheet and revenue is recognized. L. 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 r 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. 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 r-- 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. r -35 v O O COUNTY OF HAWAII _ Notes to the Combined Financial Statements - - June 30, 1998 _ 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% percent 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 r collected within the current period unless the amounts expected to be collected soon — thereafter (within 60 days) are matenal 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, 1998. _ Inventories Inventories consist of materials and supplies and are reported as expenditures at the time of purchase (purchase method). Police and fire department inventories are stated using the - first in, first out (FIFO) method. Other inventories are stated at average cost. Liquor Control Section 281 of the Hawaii Revised Statutes requires that liquor license revenues collected be used only for costs and expenses directly relating to operational and administrative costs — actually incurred by the liquor commission collecting such fees. The unexpended fees at June 30, 1998 of $301,573 are reflected as a reserve of general fund balance (See Note 12). Fixed Assets • J Fixed assets acquired for general governmental 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. -36- 0 0 COUNTY OF HAWAII Notes to the Combined Financial Statements J June 30, 1998 Fixed assets consisting of certain improvements (other than buildings), including roads, r 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: r Buildings 50 years Furnishings and equipment 5 to 10 years Ground and site improvements 20 to 50 years Long -term Obligations The County reports long -term debt of govemmental funds at face value in the general long- term debt account group. Certain other governmental fund obligations not expected to be a 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 are reported as liabilities in the funds. Compensated Absences Employees earn vacation credit at the rate of one and three- quarter working days for each month of service. Up to ninety days of vacation leave credits can be accumulated per employee. In addition, employees who work overtime can elect to take compensatory time off instead of overtime pay. The time off is earned at the rate of one and a half hours for each hour of overtime worked. There is no statutory limit to the amount of compensatory time off an employee can accumulate. Both compensatory time off and vacation credits are converted to pay upon termination of employment. 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, 1998 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 to pay upon termination of employment. Accumulated sick leave at June 30, 1998 totaled $41,928,293 for the primary government. - 37 - 0 0 COUNTY OF HAWAII Notes to the Combined Financial Statements -- r June 30, 1998 Leases Leases transferring substantially all of the risks and benefits of ownership are recorded as r 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 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. New Pronouncements Effective July 1, 1997, the County adopted the following three statements issued by the GASB. GASB Statement No. 27, "Accounting for Pensions by State and Local Government Employers," establishes standards for the measurement, recognition and display of 9 pension expenditures and related assets, liabilities and note disclosures in financial reports of state and local governments. See "Retirement Plan Contributions" above and ^ Note 15. The effect of adoption of GASB Statement No. 27 had no cumulative effect on beginning fund balance. GASB Statement No. 31, "Accounting and Financial Reporting for Certain Investments and External Investment Pools," establishes fair value standards for investments in certain types of financial instruments. With the exception of investments held in a refunding escrow account, the County's investments all fall into categories that can be — valued by cost -based measures. See "Cash and Investments" above, and Note 3. The effect of adoption of GASB Statement No. 31 as of July 1, 1997 had no cumulative effect on beginning fund balance. ,- 38 C 0 0 COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1998 r GASB Statement No. 32, "Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans," rescinds the earlier requirement that assets of IRC Section 457 deferred compensation plans be reported by employers on their balance sheet, unless the employer is acting as a fiduciary for those assets. Since a the County has no fiduciary responsibility for assets under its plan, such assets have been removed from the combined balance sheet. The effect of adoption of GASB Statement No. 32 as of July 1, 1997 had no cumulative effect of beginning fund balance and is discussed further in Note 15. Totals 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 t_ taken as a whole. r Additionally, the 1997 totals presented in the totals columns are intended to provide a summarized comparison with comparable 1998 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 1997 amounts have L been reclassified to conform to classifications adopted in 1998. 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY Annual Budget The County follows these procedures in establishing the budgetary data reflected in the financial statements: • 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. A project- length budget is submitted to the County Council for the capital projects fund. • The Mayor submits to the County Council amendments to the proposed operating and capital budgets within ten working days after the close of the state legislature, but not later than May 5. - 39 - 0 0 1 COUNTY OF HAWAII Notes to the Combined Financial Statements �- June 30, 1998 r • 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 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 appropriations required by law and appropriations for debt service, which may not be decreased or deleted. Supplemental appropriations were made during the 1997 -98 fiscal year to recognize revenue from sources not anticipated at the time of the onginal -- budget and to establish the authorization for such funds to be expended. Such supplemental appropnations totaled $7.5 million in the general fund and $1.1 million in the special revenue funds. • Appropriations for the operating budget lapse at the end of the fiscal year to the extent that they have not been expended or encumbered. Appropriations for capital expenditures that are not encumbered lapse at the end of two fiscal years following the fiscal year that the appropriation was made. • Formal budgetary integration is employed as a management control device during the year for the general fund, special revenue funds, capital projects fund, and one expendable trust fund (the 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, intergovemmental 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 statements on a GAAP basis, accounts payable are accrued and treated as a reduction of encumbrances for balance sheet — presentation. L. -40- L 0 0 COUNTY OF HAWAII Notes to the Combined Financial Statements a June 30, 1998 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, 1998: General Special Revenue J Fund Funds Ending fund balance - GAAP basis $25,455,132 $9,093,397 Encumbrance adjustments: Beginning encumbrances and unexpended allotments 6,958,973 1,214,697 D Ending encumbrances and unexpended allotments (6,193,041) (2,685,970) Beginning accounts payable in excess of encumbered amount -- (1,065) Increase in reserve for inventory of materials and supplies (49,905) -- Increase in petty cash (600) -- Ending fund balance - Non -GAAP budgetary basis $26.170,559 $7,621,059 3. CASH AND INVESTMENTS Bank time certificates of deposit (TCDs) and repurchase agreements (repos) with original matunties of three months or less are considered cash and cash equivalents for purposes of a 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 $38,937,563 and investments of $76,934,654 are included in the accompanying combined balance sheet at June 30, 1998. 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. GASB Statement No 3 Balance sheet caption: Total Deposits Investments Cash and cash equivalents $ 37,079,240 $ 9,177,368 $27,901,872 Restricted assets: Cash and cash equivalents 1,830,403 430,403 1,400,000 Imprest and change funds 27,920 r — Total cash and cash equivalents 38,937,563 Investments 76,934,654 10,050,000 66,884,654 Total cash, cash equivalents and Investments 115,872,217 Less imprest and change funds (27,920) r Classifications per GASB Statement No. 3 $115.844,297 $19,657.771 $96,186,526 J -41 J 0 0 COUNTY OF HAWAII Notes to the Combined Financial Statements — June 30, 1998 r J 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, 1998: General fund - actual $29,015,433 Payroll clearance fund - overdraft (1,016,240) _ General fund - as reported 27,999,193 Special revenue funds 11,831,173 Capital projects funds 40,071,757 State weight tax 509,799 Total pooled cash and investments $80.411,922 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 the general fund. J Interest earned is credited to the general fund unless otherwise designated by statute. r Deposits At June 30, 1998, the carrying amount of the County's deposits was $19,657,771 (including $430,403 reported in restricted assets) and the bank balance was $19,997,381. Of the bank balance, $900,000 was covered by federal depository insurance: $18,840,266 was covered by collateral held by the County's agent in the County's name in accordance with State statutes; and $235,864 held by bond paying agents and $21,251 held by a management agent were uncollateralized. Investments The Hawaii Revised Statutes authorize the County to invest in obligations of the U.S. Treasury, agencies and instrumentalities, time certificates of deposit, bank repurchase (� agreements and bonds of any improvement distnct of any county of the State, provided the Il investments are due to mature not more than three years from the date of investment. Investments are classified into three categories of credit risk: (1) 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 counterparty's trust department or agent in the County's name: or (3) uninsured and unregistered, with secunties 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. L. 42 �' 0 0 COUNTY OF HAWAII Notes to the Combined Financial Statements r June 30, 1998 At June 30, 1998, the investment balances held for the County at banks were as follows: r r Reported Fair 1... Amount Value Category 1: ^ Bank repurchase agreements $ 84,999,913 $ 84,999,913 1978 Sinking Fund repurchase agreements 11,186,613 11,186,613 Total investments $ 96,186,526 $ 96,186,526 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 $12,031,920 at June 30, 1998. A repurchase agreement is an agreement in which a governmental entity transfers cash to a broker - 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 $1,830,403 at June 30, 1998 consist of the following: The County deposited its share of the cost of the Alenaio Stream Flood Control Project E into an escrow account which amounted to $224,727 at June 30, 1998. The Army Corps of Engineers is authonzed to draw on these funds as needed dunng the course of the construction project. a Tenant security deposits received by the County for the Kulaimano Elderly Housing Project and the Ouli Ekahi Affordable Housing Project are recorded as a restricted asset. Such funds amounted to $8,367 and $18,703 respectively at June 30, 1998. Restricted amounts set aside by the Kulaimano Elderly Housing Project under its loan agreement with the Farmers Home Administration totaled $165,288 at June 30, 1998. This amount is restricted for debt service, or for other purposes with prior approval from L the Farmers Home Administration. An operating reserve fund was established by the Ouli Ekahi Affordable Housing Project pursuant to an agreement with the developer of the project. This restricted reserve amounted to $13,318 at June 30, 1998. The Improvement District No. 17 Fund has restricted $1,400,000 as a bond reserve at June 30, 1998 to comply with the requirements of its Kaloko Subdivision bond issuance. -43- O O COUNTY OF HAWAII Notes to the Combined Financial Statements C n June 30, 1998 r 4. INTERFUND RECEIVABLES AND PAYABLES Interfund receivables and payables consist of the following at June 30, 1998: Due from Due to Other Funds Other Funds — General fund $1,810,387 $2,956,125 , Special revenue funds: Highway fund 73,770 819,817 _. Parking meter fund 30,000 14,620 Sewer fund -- 172,614 -, Vehicle disposal fund -- 3,392 Solid waste fund 8,221 260,083 Golf course fund -- 59,864 Total special revenue funds 111,991 1 330,390 — Capital projects funds: Capital projects fund 211,073 2.757 Trust and agency funds: Hawaii county housing agency -- 98,848 Geothermal asset fund -- 4,878 `, Performance and refundable deposit fund -- 270 Payroll clearance fund 3,277.263 1,017,446 Total trust and agency funds 3,277,263 1.121,442 Total $5.410.714 $5,410,714 5. FIXED ASSETS A summary of changes in the general fixed assets account group follows: Balance Balance _ July 1, June 30, 1997 Additions Retirements 1998 Land $ 15,513,843 $ 655,316 $ 11,538 $ 16,157,621 _ Buildings and structures 117,964,129 91,747,080 471,127 209,240,082 Machinery and equipment 44,908,696 5,542,531 1,760,914 48,690,313 Construction in progress 103,551.818 4,933,766 88,243,633 20,241,951 "` Total 8281,938.486 $102,878,693 $90,487;212 $294,329,967 I- - 44 - 0 0 COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1998 The above summary includes fixed assets of the Hawaii County Housing Agency, an expendable trust fund, in the amount of $4,955,898. The following summarizes the enterprise funds' fixed assets at June 30, 1998: Land $ 753,877 Buildings 1,136,008 Ground and site improvements 261,000 Furnishings and equipment 86,206 Less: accumulated depreciation (668,625) r Net fixed assets $1,568,466 • LJ r 6. DEFERRED REVENUE _ Deferred revenue at June 30, 1998 consists of the following: Special Capital General Revenue Projects Enterprise Fund Funds Funds Funds Total Real property taxes $11,719,975 $ -- $ -- $ -- $11,719,975 Liquor control revenue 105,330 -- -- -- 105,330 Sewer revenue -- 1,282,103 -- -- 1,282,103 Tipping fee revenue -- 1,281,072 -- -- 1,281,072 Intergovernmental 439,390 125,000 355,086 -- 919,476 r Uneamed rental income -- -- -- 377 377 Total $12,264,695 $2,688,175 $355,086 $377 $15,308,333 r 7. LEASES The County leases machinery and equipment under noncancellable leases expiring at r 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 $1,105,218, and the related present value of the remaining obligations under the capital leases amounting to $549,928 at June 30, 1998 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 $448,739 for the fiscal year ended June 30, 1998. - 45 0 0 r t _ COUNTY OF HAWAII — Notes to the Combined Financial Statements r June 30, 1998 The future minimum obligations under capital and operating leases at June 30, 1998 are as follows: Capital Operating Leases Leases Year Ending June 30: 1999 $207,016 $ 438,216 _- 2000 63,649 423,962 2001 63,023 408,020 2002 62,352 312,062 2003 61,633 13,681 Thereafter 209,404 6,130 Total minimum lease payments 667,077 $1,602,071, -' Less amount representing interest (117,149) Obligations under capital leases $549,928 8. SOLID WASTE LANDFILL CLOSURE AND POSTCLOSURE CARE COSTS Hilo Landfill 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 the closure and postclosure care costs in each r" 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, 1998, the County recognized a liability of $13,658,000, based on the use of 98% of the estimated capacity of the landfill. During the fiscal year ended June 30, 1998, $81,041 was spent on closure of the landfill. The remaining $802,000 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 1998. Actual costs at that time may be t " higher due to inflation, changes in technology, or changes in regulations. Subsequent event — 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. Kealakehe In October, 1993, the County closed its Kealakehe landfill in Kona. Under state and federal requirements, the County would have to monitor and maintain this site for ten years from the closure date. However, the County anticipates monitoring and maintaining - 46 - 0 0 COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1998 0 the site for thirty years because there is presently a subterranean fire which requires active management. The estimated cost of closure and postclosure is $12,250,000, based on what it would cost to perform the required closure and postclosure care in 1998. Actual costs may be higher due to inflation, changes in technology, or changes in regulations. Through June 30, 1998, $6,012,000 was spent on closure and postclosure care of the landfill. The remaining estimated liability of $6,238,000 is included in the general long -term debt account group. During the year ended June 30, 1998, a total of $46,526 was spent on this landfill. Of this amount, $4,463 was for gas monitoring and training and $42,063 was for the management of the subterranean fire. The County is providing financial assurance for postclosure care and remediation through self insurance as explained below. Pu'uanahulu In May, 1993, the County contracted with a private company to construct and operate a new landfill on County land at Pu'uanahulu in West Hawaii. A public employee union challenged this contract in court. As a result of a Hawaii Supreme Court decision in this case, the County renegotiated its contract with the same private company. 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. Financial Assurance For fiscal year 1998, the County has provided for financial resources ...-i that will be available to provide for 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 government 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. n 9. LONG -TERM DEBT General Obligation Bonds The County issues general obligation bonds to provide funds for the acquisition and construction of mayor capital facilities. These bonds have been issued by the County for both primary govemment and component unit activities (see Note 16). r- -47- 0 0 COUNTY OF HAWAII Notes to the Combined Financial Statements n June 30, 1998 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, 1998: Bonds payable at July 1, 1997 $125,414,000 Bonds retired (5,015,500) Bonds payable at June 30, 1998 $120,398.500 General obligation bonds payable reported in the general long -term debt account group at — June 30, 1998 are comprised of the following individual issues: Public improvement and/or refunding bonds: 1977 Series A at 5.0 %, due through 2012 $ 309,000 1978 Refunding at 5.0% to 6.5 %, due through 2007 20,075,000 1989 Refunding at 6.2% to 6.95 %, due through 2004 2,250,000 1993 Refunding & PI at 2.5% to 5.6 %, due through 2013 63,150,000 1996 Series A at 4.5% to 5.5 %, due through 2016 30,000,000 1996 Series B at 4.5% through 2016 736,500 1997 Series A at 4.875% through 2017 3,878,000 — Total general govemment $120,398,500 -- Annual debt service requirements to maturity for the above general obligation bonds, — including interest payments of $57,212,799, are as follows: Fiscal year ending June 30: 1999 $ 12,848,324 2000 12,822,692 2001 12,787,420 2002 12,760,378 2003 12,725,707 "' Thereafter 113,666,778 Total $177,611,299 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, 1998, consisting of assets, investments (at fair value) and cash, was $32,124,325. -48- L ' O 0 COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1998 — The assets of this trust account and the liability for the defeased bonds are not included in _ the County's financial statements. At June 30, 1998, $30,900,000 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 thirteen projects approved for funding with these loans. The schedule below shows the County's SRF transactions for the fiscal year ended June 30, 1998: Loans Approved Loan Balance Loan Balance r— Authorized Amount July 1, 1997 Additions Retirements June 30, 1998 -../ Hilo WWTP $12,724,311 $10,783,817 $ -- ($556,432) $10,227,385 Waiakea Mill 1,300,000 1,152,560 -- (55,240) 1,097,320 Waiakea Hslots 459,321 390,861 -- (20,168) 370,693 Waiakea Hslots II 6,900,000 -- -- -- -- Amako A &B 2,374,600 2,027,625 -- (102,995) 1,924,630 — Kalanianaole 1,499,944 1,461,809 -- (60,081) 1,401,728 Alii Drive A &B 3,210,243 2,642,974 -- (125,326) 2,517,648 `' Alii Drive C &D 3,780,000 3,366,489 -- (149,011) 3,217,478 Alii Drive E &F 2,300,000 1,453,928 -- (57,515) 1,396,413 Waiaha Bay 3,697,893 3,129,301 37,726 (134,048) 3,032,979 — Kealakehe 1,300,071 1,150,461 -- (55,139) 1,095,322 Holualoa Bay 3,080,000 1,473,506 1,367,182 (91,541) 2,749,147 Disappear. Sands 2,000,000 -- -- -- -- $44,626,383 $29,033,331 $1,404,908 (51,407,496) $29,030,743 The loans bear interest at 2.06% to 3.02 %, exclusive of a 1.00% loan fee, and require payments through fiscal year 2017. Debt service to maturity, including interest and loan fees of $9,965,572, is given below for the disbursements to date on these projects. — Fiscal year ending June 30: 1999 $ 2,389,259 2000 2,389,259 2001 2,389,259 2002 2,389,259 r 2003 2,389,259 L Thereafter 27.050.020 Total $38,996,315 F L r _ 49 _ O 0 J COUNTY OF HAWAII Notes to the Combined Financial Statements -- r June 30, 1998 — Other General Long -term Debt The following is a summary of other general long - term debt transactions for the fiscal year ended June 30, 1998: — Balance Deductions Balance July 1, 1997 Additions & Payments June 30, 1998 Compensated absences $17,785,879 $ 718,010 $ -- $18,503,889 Claims and judgments (see Note 14) 7,000,000 5,328,513 (3,990,852) 8,337,661 Capital lease obligations (see Note 7) 602,063 -- (52,135) 549,928 Landfill closure costs r (see Note 8) 14,125,000 5,898,567 (127,567) 19,896,000 Total $39,512,942 $11,945,090 ($4,170,554) $47,287,478 Fund Balances - Debt Service Funds The fund balance in the debt service funds at June 30, 1998 includes $19,836,866 which is — available for principal payments on general obligation bonds and $98,133 which is set aside for the payment of interest on the bonds. Enterprise Fund Notes Payable The Kulaimano Elderly Housing Project is indebted to the U.S. Depai cent of Agriculture, ^ Farmers Home Administration on two notes payable with balances aggregating $1,159,837 at June 30, 1998. The notes, which mature in September 2029, are repayable in monthly c 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 for Improvement Distract No. 17, Kaloko Subdivision, to finance a roadway and water system. The bonds mature annually through 2011 and bear interest at 9.5 %. Total special assessment bonds payable were $12,255,000 at June 30, 1998. 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 50- L 0 0 COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1998 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. L. The following is a summary of special assessment bond transactions for Improvement District No. 17, Kaloko Subdivision, for the fiscal year ended June 30, 1998: Balance at July 1, 1997 $12,670,000 Deductions - maturities (415,000) Balance at June 30, 1998 $12,255,000 The following is a summary of the,annual maturities including interest of $9,822,763 for special assessment bonds: Year ending June 30: _ 1999 $ 1,597,613 2000 1,592,487 2001 1,593,088 2002 1,588,938 2003 1,589,563 Thereafter 14.116.074 Total $22,077.763 10. CONTRIBUTED CAPITAL Contributed capital of $411,296 at June 30, 1998 in the Kulaimano Elderly Housing Project r represents contributions from private and govemment sources at the inception of the project. Contributed capital of $544,367 in the Ouli Ekahi Affordable Housing Project at June 30, 1998 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, 1998 is as follows: r -51 L 0 0 COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1998 KEHP OEAHP Total Operating revenues $234,586 $207,974 $442,560 Depreciation 41,398 -- 41,398 Operating loss (144,183) (10,081) (154,264) Net loss (193,108) (9,305) (202,413) Net working capital 681,590 14,683 696,273 V Fixed assets, net 1,064,589 503,877 1,568,466 Total assets 1,946,140 558,952 2,505,092 — Long-term notes payable 1,159,837 -- 1,159,837 Total equity 764,229 533,099 1,297,328 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, 1998 consist of the following: — General fund: Imprest and change funds $ 25,670 Drug enforcement 32,354 Special duty police program 258,747 Future year expenditures 14,000,000 Claims andjudgments 1,142,657 Total general fund $15,459,428 Special revenue funds: Equipment replacement 2,052,775 Imprest fund 2,000 Future year expenditures 1,693,792 Future project 1,000 Total special revenue funds 3,749,567 Capital Projects Funds: Road repairs 1,537,891 Development impact 528,691 _ SRF (wastewater) projects 2,534,028 Total capital projects funds 4,600,610 — Trust and Agency Funds: Imprest fund 100 Affordable housing 96,754 's Future year expenditures 465,839 Total trust and agency funds 562,693 Total designated fund balance $24,372,298 -52- L. 0 0 COUNTY OF HAWAII --' Notes to the Combined Financial Statements June 30, 1998 Reserved Fund Balance i_- 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 J June 30, 1998 are composed of the following: Special Debt Capital Trust and 7 General Revenue Service Projects Agency _J Fund Funds Funds Funds Funds Total Reserved for: Encumbrances $6,193,041 $2,685,970 $ -- $17,217,553 $2,654,349 $28,750,913 '- Unexpended J allotments -- 6,956,625 6,956,625 I nventories 2,030,118 2,030.118 Debt service -- -- 19,934,999 -- -- 19,934,999 Taxi investigations 18,870 -- -- -- -- 18.870 Liquor control 301.573 -- -- -- -- 301.573 Total reserved fund balance $8,543,602 $2,685,970 $19 $24,174,178 $2 $57 ...... Retained Earnings At June 30, 1998, the Kulaimano Elderly Housing Project reported retained earnings L reserved for debt service in the amount of $165,288 and unreserved retained earnings of $187,645. The Ouli Ekahi Affordable Housing Project reported an accumulated deficit of 9 $11,268 at June 30, 1998. 13. COMMITMENTS AND CONTINGENCIES L Contractual commitments — Contractual commitments for capital projects, expenses, and supplies at June 30, 1998, except in the enterprise funds, are reflected in the combined financial statements as fund balance reserved for encumbrances. Contractual commitments for the enterpnse funds were immaterial. Intergovernmental revenues — The County has received federal and state grants for specific purposes that are subject to review and audit by grantor agencies. Such audits -- could lead to requests for reimbursement to the grantor agency for expenditures disallowed under terms of the grant. In the opinion of management of the County, disallowed costs, if any, would not be material. n L n - 53 - L 0 0 COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1998 Claims — Numerous claims and lawsuits have been filed against the County in the normal course of its operations. A liability for probable losses is included in the general long -term _ debt 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. v Collective bargaining — The collective bargaining agreement covering blue collar government workers statewide expired on June 30, 1995. The union has contended that a tentative agreement between the union and the public employers in the state was reached in early 1998. Notwithstanding the union's contention, the County is of the opinion that some of the legal requirements for a contract have not been complied with in order to effectuate — the agreement. For example, the cost items have not been approved by the state legislature or the Hawaii County Council as required by state statute. If the union's position prevails, the new contract will cover the period July 1, 1995 through June 30, 1999, and the cost to the County will be in excess of $2 million. The County is unable assess the eventual outcome of this issue because of the numerous issues and points of law involved. Managed process for public competition — The 1998 session of the state legislature passed a bill mandating that a multi - jurisdictional committee be formed to establish policies and ..J 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 compliance — The County is presently under two stipulated agreements signed by r federal court to implement provisions of the Americans with Disabilities Act. The first stipulated agreement relates to curb cuts, and requires the County to establish practices, procedures and policies on curb cuts. With the help of a consultant, the County has held public heanngs and established practices and procedures. Next, the County must complete _. a detailed inventory of all curbs on the island, and determine the engineering necessary to take corrective action. A transition plan, including a commitment of funding, must be approved by the County Council, and all corrective action must be completed by the year 2005. Until the inventory and transition plan is completed, an estimate of the cost to the County cannot be made. The second stipulated agreement relates to the Depaituient of Parks and Recreation (the Parks Department). The Parks Department must establish practices, policies and — -54- r 0 0 COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1998 L procedures regarding the programs offered by the Parks Department, and establish a transition plan that again must go before the County Council before the middle of the year 2000. In regards to facilities, the Parks Department must redo its self evaluation for all facilities, and obtain approval and commitment of funding from the County Council for necessary renovations. The tentative completion date of all necessary repairs and renovations is 15 years from the date the County Council accepts the self evaluation. The estimated cost of the facilities repairs alone is $30 million, which will be spent over the 15 year period. 14. RISK MANAGEMENT r The County is exposed to various risks of losses related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The County maintains fire and commercial multiple peril insurance on County facilities, flood insurance on selected structures, medical malpractice insurance for emergency medical technicians, 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 f, 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 f to be liquidated with expendable financial resources. At June 30, 1998, the amount of this L liability was $8,337,661. This is the County's best estimate based on available information. Changes in the reported liability since July 1, 1996 are given below. F L 7 L r L r - 55 - L 0 0 COUNTY OF HAWAII Notes to the Combined Financial Statements t-- June 30, 1998 _ General Workers' Total Liability Compensation Liability Balance at July 1, 1996 $ 464,250 $4,756,500 $5,220,750 Incurred claims (including IBNR)* 2,547,977 1,870,441 4,418,418 Claim payments (520,966) (2,118,202) (2,639,168) — Balance at June 30, 1997 $2,491,261 $4,508,739 $7,000,000 Incurred claims (including IBNR)* 1,454,549 3,873,964 5,328,513 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 r1 *Net of new claims liability and old claims resolved at less than previous estimate. L. 15. EMPLOYEE BENEFIT PLANS fl U Pension Plan Plan description All full -time employees of the County participate in the Employees' Retirement System of the State of Hawaii (System), a cost - 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 1, 1985. All 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 25 years of credited service. Such employees are — generally entitled to retirement benefits, payable monthly for life, of 2% or 21 % 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 — -56- — 0 0 COUNTY OF HAWAII — Notes to the Combined Financial Statements June 30, 1998 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 to the Employees' Retirement System of the State of Hawaii, 201 Merchant Street, Suite 1400, Honolulu, Hawaii 96813. Funding policy All 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 remaining amounts necessary to 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 actuanally determined based on actuarial assumptions established by Chapter 88, HRS. The County's contributions to the System for the fiscal years ended June 30, 1996, 1997 and 1998 were $10,188,900, $11,041,700, and $11,460,200 respectively, equal to the required contributions for each year. Transition year disclosure The County adopted the new reporting requirements of GASB Statement No. 27 effective July 1, 1997. The County has no pension liability as of the transition date, which is consistent with previously reported information. Subsequent event The 1998 state legislature passed a measure amending state statutes relating to the actuanal assumptions of the System. This amendment will reduce the County's employer contribution for the fiscal year ending June 30, 1999, by $1,767,300. 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 the fund. For employees hired prior to July 1, 1996 who retire with at least ten years of credited service, the County is required to pay 100% of the 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 J credited service, the County was required by statute in the year ended June 30, 1998 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 vanes depending on the r employee's years of service at the time of retirement. Currently, the County has 929 former employees who have retired with at least ten years of credited service and are receiving the full benefit. An additional four employees have -57- 0 0 COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1998 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, 1998, the County's contribution to the Health Fund for retired _ employees totaled $4.2 million. Subsequent event The 1998 state legislature passed a measure requiring the Health Fund to _ return to participating employers their share of insurance carrier refunds and rate credits that had been held by the insurance companies as reserves. The amount to be returned to the — County, including accrued interest to December 30, 1997, is approximately $1,604,800. Deferred Compensation Plan — County employees are permitted to participate in a deferred compensation plan of the State of Hawaii, adopted pursuant to Internal Revenue Code (IRC) section 457. The plan permits _ eligible employees to defer a portion of their salary until future years by contributing to a fund managed by a plan administrator. The deferred compensation amounts are not L available to employees until termination, retirement, death, or unforeseeable emergency. Through June 30, 1997, all amounts of compensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property, or rights were accounted for in an agency fund and were (until paid or made — available to the employee or beneficiary) solely the property and rights of the County, subject only to the claims of the County's general creditors. Participants' rights under the plan were equal to those of general creditors of the County in an amount equal to the fair value of the deferred amount for each participant. Effective July 1, 1997, in compliance with new federal law, a trust fund was established to protect plan assets from claims of — general creditors and from diversion to any uses other than paying benefits to participants — and beneficianes. 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, which was adopted by the County effective July 1, 1997 (see Note 1), plan assets of $31,524,865 have not been reported in the accompanying financial statements — at June 30, 1998. However, the plan assets of $26,576,092 at June 30, 1997 appear in the prior year totals column on the combined balance sheet. u - 58- — 0 0 COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1998 16. COMPONENT UNIT DISCLOSURES Cash and Investments 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 repurchase agreements regardless of initial maturity are considered investments and all bank TCDs are considered deposits. The amount of $235,636 shown on _ the balance sheet as cash and cash equivalents consists of cash on hand (deposit in transit) of $162,177 and balance in the checking account of $73,459. Deposits At June 30, 1998, the carrying amount of the Department's deposits was $5,873,459 and the bank balance was the same. This entire amount 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 restncted as to use, and is recorded as a restricted asset. Such funds amounted to $4,040,698 at June 30, 1998. Investments The Department is allowed to invest in the same types of instruments as the primary government (see Note 3). Investments are classified into three categories of credit risk: (1) 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 counterparty'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, 1998, the Department had investments of $21,242,982 (reported amount, which equals fair value) in bank repurchase agreements, which was all in risk category 1. All investments were restricted assets. Fixed Assets J 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. J -59- 0 0 LJ COUNTY OF HAWAII Notes to the Combined Financial Statements — June 30, 1998 Depreciation on the Depai tment 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 30 to 67 years — Machinery and equipment 5 to 20 years Water systems 25 to 50 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, 1998 were as follows: Utility plant in service $192,263,839 Less: accumulated depreciation (65,603,735) — 126,660,104 Construction in progress 16,081,404 Net fixed assets $142.741,508 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 $12,785,350 _ at June 30, 1998. General obligation bonds payable issued on behalf of the Department at June 30, 1998 are comprised of the following individual issues: — L Public improvement bonds: 1981 Series A at 5.0 %, due through 2016 $ 542,000 1993 Series A at 3.8% to 5.6 %, due through 2013 8,875,000 1998 Series A at 4.5 %, due through 2033 118,350 Total public improvement bonds 9,535,350 — Public improvement refunding bonds: 1989 Senes at 6.2% to 6.95 %, due through 2004 3.250.000 — Total Department $12,785,350 J r -60- — n 0 O r COUNTY OF HAWAII -- Notes to the Combined Financial Statements _ June 30, 1998 1 J Annual debt service requirements to matunty for these general obligation bonds, including interest payments of $5,462,792, are as follows: — Fiscal year ending June 30: 1999 $ 1,597,803 2000 1,564,516 2001 1,534,394 2002 1,507,422 — 1 2003 1,475,087 J Thereafter 10,568,920 l Total $18,248,142 J Contributed Capital The following is a summary of contributed capital of the Department for the fiscal year _ ended June 30, 1998: Balance Balance — July 1, June 30, 1997 Additions 1998 Contributed by County of Hawaii $ 1,132,683 $ -- $ 1,132.683 _ Contributions in aid of construction: Federal government 5,624,118 92,100 5,716,218 — State of Hawaii 52,028,255 218,610 52,246,865 County of Hawaii 8,118,989 212,595 8,331,584 --.) Non- government 89,993,394 4.612,801 94,606,195 Total contributions in aid of construction 155,764,756 5,136,106 160,900,862 J Less: accumulated amortization (49,897,622) (3,850,390) (53,748,012) Net contributions in aid of construction 105.867.134 1.285,716 107,152,850 Contributed capital $106,999.817 $1,285,716 $108,285.533 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 1, 1950. r• Commitments and Contingent Liabilities _ Claims and judgments - The Department is self - insured for workers' compensation and other perils. The liability at June 30, 1998 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. -61- 0 0 • COUNTY OF HAWAII T Notes to the Combined Financial Statements J June 30, 1998 4 r Construction contracts — The Department is obligated under construction contracts for the i -- utility plant and other projects. Such commitments approximated $4,213,663 at _ June 30, 1998. 17. YEAR 2000 (Unaudited) The County has established a Year 2000 (Y2K) readiness project to ensure that all of its computer systems will function properly after December 31, 1999. The County's primary fiscal systems run on a minicomputer. Several departments have their own minicomputers, — others have established personal computer local area networks for specific departmental — purposes, and there are many single user stand -alone personal computer systems. In addition, the County is evaluating equipment that utilizes embedded microprocessors or other devices that store, process and display dates to ensure that essential governmental functions will not be impaired by the arrival of the year 2000. During the fiscal year ended June 30, 1998, the County spent $85,000 to ensure that its primary computer system is Y2K compliant. Another $186,500 is committed to this project by various departments. — The County is making progress in addressing its Y2K concems. The awareness stage has been completed. Countywide meetings and workshops have been conducted to ensure that all departments are aware of the Y2K issues that impact them. For the County's primary — minicomputer, budgetary needs have been identified and a project plan has been — established. Oversight of outside departments will be performed by the County's data processing staff. — The County has completed the assessment of all applications that run on the primary —' minicomputer, and identified the modifications necessary to make all applications Y2K compliant. A schedule has been established for the programming changes necessary, and all changes will be made by County staff. The County is currently conducting its assessment of departmental minicomputers, networks, and single use computer systems, and expects to complete this assessment by December 1998. For all of the applications running on the mini computer, modifications and upgrades to both hardware and software systems were completed in August 1998. Validation and —' testing of the modified system began in September 1998 and will be completed in early 1999. Full implementation of the Y2K compliant system will follow immediately after successful validation and testing is completed. — In addition to evaluating its own systems and equipment, the County is contacting outside vendors and government agencies that it relies upon for support services for its computer ,-., applications, computer systems, and other date sensitive products, and requesting completion by them of a Y2K readiness questionnaire. The purpose of the questionnaire is 62- — 0 0 COUNTY OF HAWAII r Notes to the Combined Financial Statements L June 30, 1998 -- 3 to ensure that outside vendors and agencies are taking appropriate steps to become Y2K compliant before January 1, 2000. J - 1 -J - 7 L J 0 L r 0 - 63- J 0 0 7 J J This page intentionally left blank. E 1 64- - 0 0 COUNTY OF HAWAII r- Y O � � O� •,, are q 9 • 1 • - i--- ..-- ' -a-sk• • i OF N P Financial Audit Report for the Fiscal Year Ended June 30, 1998 J 0 0 GENERAL FUND The General Fund accounts for all financial resources except those required to be accounted for in another fund. r r C n r r e C A-- 0 0 COUNTY OF HAWAII General Fund Comparative Balance Sheets June 30,1998 and 1997 r- 1998 1997 Assets Cash and investments: Cash and cash equivalents $5,856,536 $15,040,738 Investments 22,142,657 12,533,048 Imprest and change funds 25,670 25,070 Total cash and investments 28,024,863 27,598,856 Receivables: Real property taxes: Delinquent 11,472,887 12,825,393 Litigated claims -- 177,975 Total real property taxes 11,472,887 13,003,368 Due from other governments: State of Hawaii 1,005,430 7,501,207 Federal government 1,065,487 1,619,895 Total due from other governments 2,070,917 9,121,102 Due from other funds 1,810,387 2,098,088 Other 300,728 220,369 r- Total receivables 15,654,919 24,442,927 Inventories 2,030,118 1,980,213 Total assets $45,709,900 $54,021,996 (Continued) U 9 r-- - 65- 0 • r -- COUNTY OF HAWAII (Concluded) .... General Fund — Comparative Balance Sheets r June 30,1998 and 1997 1998 1997 Liabilities and Fund Balance Liabilities: Warrants payable $ 2,884,711 $ 2,872,609 Accounts payable 1,198,300 1,258,569 Due to other funds 2,956,125 4,259,591 Due to federal government - arbitrage rebate 232,851 136,026 Deferred revenue: ..- Real property taxes 11,719,975 13,242,620 V Liquor control revenue 105,330 167,570 Intergovernmental 439,390 1,055,963 Total deferred revenue 12,264,695 14,466,153 Other 718,086 689,977 Total liabilities 20,254,768 23,682,925 fl Fund balance: Reserved for: — Encumbrances 6,193,041 6,958,973 Inventories 2,030,118 1,980,213 –.+ Taxicab investigations 18,870 -- Liquor control 301,573 225,435 r" Total reserved fund balance 8,543,602 9,164,621 Unreserved: Designated for: Imprest and change funds 25,670 25,070 Drug enforcement 32,354 32,354 Special duty police program 258,747 206,235 Future year expenditures 14,000,000 15,800,000 Claims and judgments 1,142,657 1,083,048 Total designated fund balance 15,459,428 17,146,707 Undesignated 1,452,102 4,027,743 Total fund balance 25,455,132 30,339,071 r Total liabilities and fund balance $45,709,900 $54,021,996 J r - 66- 0 O 9 COUNTY OF HAWAII General Fund Comparative Statements of Revenues, Expenditures and Changes in Fund Balances L_ For the Fiscal Years Ended June 30, 1998 and 1997 — 1998 1997 Revenues: Taxes and assessments $87,420,313 $86,489,656 — Licenses and permits 3,268,071 3,150,742 Intergovernmental 38,437,063 35,616,526 Charges for current services 1,660,651 1,698,830 Fines and forfeitures 366,804 346,436 Rents 127,367 83,808 Interest and penalties 4,948,075 4,920,177 Miscellaneous 1,027,314 1,304,017 Y Total revenues 137,255,658 133,610,192 Expenditures: Current: General government 20,481,226 19,615,104 n Public safety 53,146,612 51,569,478 J Highways and streets 1,263,890 1,293,013 Sanitation — 4,521 Health, education and welfare 5,006,905 5,002,914 J C ulture and recreation 10,994,518 10,682,846 L Pension and retirement contribution 12,325,588 12,533,069 Health fund 8,591,942 7,923,090 Miscellaneous 2,800,022 2,431,467 Capital outlay 5,603,234 4,458,536 Debt service: Interest and finance charges 30,644 13,029 Principal retirement 49,824 19,051 L-J Total expenditures 120,294,405 115,546,118 Excess of revenues over expenditures 16,961,253 18,064,074 Other financing sources (uses): Increase in capital lease obligations -- 469,210 f Sale of general fixed assets 17,385 14,598 L Operating transfers in 1,153,627 1,100,223 Operating transfers out (23,066,109) (21,471,085) Total financing uses (21,895,097) (19,887,054) J Deficiency of revenues and other sources over expenditures and other uses (4,933,844) (1,822,980) L Fund balance at beginning of year 30,339,071 31,760,613 Increase in reserve for inventories 49,905 401,438 Fund balance at end of year $25,455,132 $30,339,071 I— -67- L_ 0 0r .--.• COUNTY OF HAWAII 0 General Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Budgetary Basis) — For the Fiscal Year Ended June 30, 1998 Variance — Favorable Budget Actual (Unfavorable) Revenues: — Taxes and assessments - real property taxes $83,484,500 $87,420,313 $ 3,935,813 ,-., Licenses and permits: Nonbusiness licenses and permits 2,144,460 2,052,080 (92,380) Business licenses 1,035,151 949,870 (85,281) — Street use 275,000 266,121 (8,879) r Total licenses and permits 3,454,611 3,268,071 (186,540) r , Intergovernmental: — Federal: Programs for the aged 1,125,905 1,134,012 8,107 Community development block grants 2,156,000 2,156,000 -- Civil defense 107,900 106,914 (986) Law enforcement 2,245,405 1,887,677 (357,728) Other 1,812,600 1,802,878 (9,722) Total federal 7,447,810 7,087,481 (360,329) r State: U State General Fund - Act 185, SLH 1990 17,994,000 18,608,239 614,239 Emergency medical services 7,604,265 7,453,419 (150,846) Other 3,756,283 2,860,535 (895,748) Child support enforcement 977,218 968,102 (9,116) Total State 30,331,766 29,890,295 (441,471) Total intergovernmental revenue 37,779,576 36,977,776 (801,800) Charges for current services: General government 828,580 893,782 65,202 Culture and recreation 376,720 317,419 (59,301) — Highways and streets 434,800 435,643 843 Public safety 18,000 13,807 (4,193) Y Total charges for current services 1,658,100 1,660,651 2,551 Fines and forfeitures 783,500 366,804 (416,696) Rents 188,500 127,367 (61,133) J (Continued) 68 U C 1 b O O 0 COUNTY OF HAWAII (Continued) General Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - .L-+ Budget and Actual (Budgetary Basis) - For the Fiscal Year Ended June 30, 1998 Variance Favorable Budget Actual (Unfavorable) - Revenues (continued): Interest and penalties 3,500,000 4,888,466 1,388,466 Miscellaneous 2,525,115 2,656,282 131,167 Total revenues 133,373,902 137,365,730 3,991,828 - Expenditures: Current: r General government: L Finance 6,154,300 5,605,652 548,648 Automotive equipment 1,887,804 1,703,874 183,930 General government building 2,006,598 1,911,648 94,950 Legislative 2,299,267 2,000,244 299,023 (� Law 3,053,919 2,978,473 75,446 Planning and zoning 1,617,140 1,316,718 300,422 Research and development 1,377,923 1,189,866 188,057 Mayor's office 940,664 888,937 51,727 Engineering 970,074 925,555 44,519 Personnel services 795,429 712,233 83,196 Chief engineer 806,189 795,048 11,141 - Elections 427,095 365,427 61,668 - Total general government 22,336,402 20,393,675 1,942,727 - Public safety: Police department 30,754,418 28,940,607 1,813,811 Fire department 17,296,184 16,731,489 564,695 Prosecuting attorney 4,601,188 3,903,799 697,389 Protective inspection 1,444,502 1,384,522 59,980 r Liquor control 855,674 688,089 167,585 Flood control 460,720 396,361 64,359 Civil defense agency 464,338 433,143 31,195 r Humane Society 604,170 604,170 -- Industrial safety 343,707 337,558 6,149 Y Total public safety 56,824,901 53,419,738 3,405,163 Q Highways and streets: Mass transit 1,356,516 1,326,357 30,159 (Continued) r r -69- r O 0 1 COUNTY OF HAWAII (Continued) General Fund -' Schedule of Revenues, Expenditures and Changes in Fund Balance - r Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 1998 Variance Favorable - Budget Actual (Unfavorable) Expenditures (continued): _ Current (continued): Health, education and welfare: r Office of Aging 1,293,424 1,255,677 37,747 Elderly Activities 2,495,056 2,409,308 85,748 Education 290,000 257,335 32,665 Social programs 900,000 863,976 36,024 Cemeteries 193,999 167,621 26,378 Physical examination 101,286 101,286 -- Total health, education and welfare 5,273,765 5,055,203 218,562 Culture and recreation: Community music 146,400 144,472 1,928 Organized recreation: Maintenance 4,731,873 4,619,613 112,260 Recreation 1,389,443 1,344,265 45,178 Aquatics 2,044,297 1,870,850 173,447 r- Hoolulu Park complex 698,492 685,631 12,861 Administration 1,038,155 955,691 82,464 Children's zoo 552,516 507,202 45,314 Summer fun 317,376 235,517 81,859 r Culture and arts 107,316 105,337 1,979 Elderly activities administration 543,799 508,811 34,988 Total culture and recreation 11,569,667 10,977,389 592,278 Pension and retirement contributions 12,331,618 12,325,588 6,030 Health fund 8,664,233 8,591,942 72,291 Miscellaneous 4,875,204 2,807,890 2,067,314 Total current 123,232,306 114,897,782 8,334,524 { Capital Outlay - Community Development jug Block grants (HUD) CDBG 1995 (59,483) (59,483) -- CDBG 1996 59,483 59,483 -- CDBG 1998 2,164,500 2,164,500 -- Total Community Development Block Grants (HUD) 2,164,500 2,164,500 -] - HOME Program 1,007,501 1,007,501 -- r . Total capital outlay 3,172,001 3,172,001 -- (Continued) ,^, J - 70 - .J 0 0 r- COUNTY OF HAWAII (Concluded) General Fund C Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Budgetary Basis) — For the Fiscal Year Ended June 30, 1998 - Variance Favorable Budget Actual (Unfavorable) Expenditures (continued): 7' Total expenditures 126,404,307 118,069,783 8,334,524 Excess of revenues over expenditures 6,969,595 19,295,947 12,326,352 Other financing sources (uses): Operating transfers in: Golf Course Fund 135,868 135,868 — Capital Projects Fund 85,000 85,000 -- 1978 Sinking Fund 933,051 932,759 (292) C Total operating transfers in 1,153,919 1,153,627 (292) Operating transfers out: Sewer Fund 650,437 650,437 -- Solid Waste Fund 7,842,157 6,750,000 1,092,157 Golf Course Fund 175,146 175,146 -- Capital Projects Fund 117,755 117,755 -- Sewer Loan Fund 67,000 -- 67,000 Debt Service Fund 16,984,359 16,984,357 2 Total operating transfers out 25,836,854 24,677,695 1,159,159 Total other financing uses (24,682,935) (23,524,068) 1,158,867 C Deficiency of budgeted revenues and other sources over budgeted expenditures and other uses: (17,713,340) (4,228,121) 13,485,219 9 Unbudgeted self - insurance revenues -- 59,609 59,609 u Fund balance at beginning of year 30,339,071 30,339,071 -- Fund balance at end of year $ 12,625,731 $26,170,559 $13,544,828 C r— r - 0 0 r J r r L This page intentionally left blank. C r r r a 0 r -72- C 0 0 a SPECIAL REVENUE FUNDS HIGHWAY FUND - Used to account for the costs of maintaining the County's highways and streets. Financing is provided primarily by fuel, motor vehicle weight and public utility franchise taxes. 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 parts. 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 payments from restaurant and pro shop concessionaires. a 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. BEAUTIFICATION FUND - Used to accumulate moneys for the beautification of highways and disposal of abandoned vehicles within the County. Financing is provided by assessments on vehicle registrations. J r 4 0 0 a r This page intentionally left blank. Q E L 0 L -J r L - 73 - 0 0 , r COUNTY OF HAWAII i Special Revenue Funds Combining Balance Sheet [ June 30, 1998 (J (With comparative totals for June 30, 1997) _ Parking Highway Meter Sewer Bikeway Cemetery Fund Fund Fund Fund Fund Assets `-' Cash and cash equivalents $5,638,027 $ -- $2,578,408 $38,339 $24,400 r' Imprest fund -- -- - -- -- Receivables: Waste disposal charges receivable -- -- 1,282,103 -- -- _ Due from state government 7,971 -- -- -- -- Due from other funds 73,770 30,000 - -- -- Other 2,325 166 165,245 -- -- -, Total receivables 84,066 30,166 1,447,348 -- -- ,� Total assets $5,722,093 $30,166 $4,025,756 $38,339 $24,400 - Liabilities and Fund Balances r Liabilities: Warrants payable $ 390,018 $ 100 $ 73,767 $ 2,498 $ -- - Accounts payable 334,926 -- 41,441 -- -- Due to other funds 819,817 14,620 172,614 -- -- {� Accrued liabilities -- -- 27,194 -- -- El Deferred revenue 125,000 -- 1,282,103 -- -- Total liabilities 1,669,761 14,720 1,597,119 2,498 -- r Fund balances: Reserved for encumbrances 1,587,825 -- 163,775 -- -- Unreserved: -' Designated for: J Equipment replacement -- -- 2,052,775 -- -- Imprest fund -- -- -- -- -- Future year expenditures 1,230,000 15,446 -- -- -- Future project 1,000 -- -- -- -- - Total designated fund balance 1,231,000 15,446 2,052,775 -- -- Undesignated 1,233,507 -- 212,087 35,841 24,400 r Total fund balances 4,052,332 15,446 2,428,637 35,841 24,400 -- Total liabilities and fund balances $5,722,093 $30,166 $4,025,756 $38,339 $24,400 r J - 74 - L ' 0 0 r Vehicle Solid Golf Geothermal Beauti- Totals n Disposal Waste Course Relocation fication J Fund Fund Fund Rev. Fund Fund 1998 1997 r $431,853 $2,010,499 $179,831 $641,869 $287,947 $11,831,173 $9,638,535 - -- -- 2 ,000 -- -- 2,000 2,000 r -- 1,256,332 -- -- -- 2,538,435 1,842,368 _. _ -- -- -- -- 7,971 5,241 -- 8,221 __ -- __ 111,991 488,738 -- 6,771 1,365 -- -- 175,872 99,804 - -- 1,271,324 1,365 -- -- 2,834,269 2,436,151 $431,853 $3,281,823 $183,196 $641,869 $287,947 $14,667,442 $12,076,686 L $ 37,339 $ 83,326 $ 3,243 $ -- $ 1,598 $ 591,889 $ 729,611 901 541,621 930 7,200 1,171 928,190 470,240 1 3,392 260,083 59,864 -- -- 1,330,390 1,390,570 L -- 8,207 -- - -- 35,401 -- 1,281,072 -- -- -- 2,688,175 1,989,483 41,632 2,174,309 64,037 7,200 2,769 5,574,045 4,579,904 50,336 715,924 4,704 135,429 27,977 2,685,970 1,214,697 -- -- -- -- -- 2,052,775 1,106,775 -- -- 2,000 -- -- 2,000 2,000 -- 391,590 56,756 -- -- 1,693,792 3,062,252 _- -- -- -- 1,000 1,000 391,590 58,756 -- -- 3,749,567 4,172,027 339,885 -- 55,699 499,240 257,201 2,657,860 2,110,058 U 390,221 1,107,514 119,159 634,669 285,178 9,093,397 7,496,782 E $431,853 $3,281,823 $183,196 $641,869 $287,947 $14,667,442 $12,076,686 L Ei r L r-- - 75 - J 0 0 J COUNTY OF HAWAII 7 Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances r For the Fiscal Year Ended June 30, 1998 (With comparative totals for the fiscal year ended June 30, 1997) - Parking Vehicle - Highway Meter Sewer Bikeway Cemetery Disposal _, Fund Fund Fund Fund Fund Fund Revenues. Taxes $ 9,912,278 $ -- $ -- $ -- $ -- $ -- r Licenses and permits 2,463,510 -- -- 34,872 -- 467,692 Intergovernmental 216,217 -- -- 12,000 -- -- Charges for current services 101,202 82,036 3,820,344 -- -- 266 Miscellaneous 55,495 78 9,229 -- 7,000 619 C Total revenues 12,748,702 82,114 3,829,573 46,872 7,000 468,577 Expenditures: c Current: General government - '_, Public safety 2,418,990 107,704 -- -- -- -- Highways and streets 5,294,804 -- -- 33,189 -- -- Sanitation -- -- 2,976,789 -- -- 667,519 Health, education & welfare 3,746 -- -- -- -- -- Culture and recreation -- -- -- -- -- -- r Pension and retirement contributions 926,056 21,395 315,367 -- -- 6,257 Health fund 452,231 9,698 129,891 -- -- 1,313 Miscellaneous 319,972 -- 61,946 -- -- -- r Debt service: Interest charges -- -- -- -- -- -- Principal retirement -- -- -- -- -- -- Total expenditures 9,415,799 138,797 3,483,993 33,189 -- 675,089 Q Excess (deficiency) of revenues over expenditures 3,332,903 (56,683) 345,580 13,683 7,000 (206,512) Other financing sources (uses): r Operating transfers in: General Fund - -- 650,437 -- -- -- Highway Fund -- 30,000 -- -- -- -- r Operating transfers out: General Fund -- -- - -- -- -- Parking Meter Fund (30,000) -- -- -- -- -- Public Improvement Bond Fund (2,818,611) -- -- -- -- - Total other financing sources (uses) (2,848,611) 30,000 650,437 -- -- -- Excess (deficiency) of revenues and other r sources over expenditures and other uses 484,292 (26,683) 996,017 13,683 7,000 (206,512) Fund balances at beginning of year 3,568,040 42,129 1,432,620 22,158 17,400 596,733 Fund balances at end of year $ 4,052,332 $15,446 $2,428,637 $35,841 $24,400 $390,221 r J -76- --, E • 0 0 Solid Golf Geothermal Beauti- Totals - Waste Course Relocation fication Fund Fund Rev. Fund Fund 1998 1997 J r- $ -- $ -- $ -- $ -- $ 9,912,278 $ 9,634,476 L -- -- -- 116,927 3,083,001 2,972,765 225,874 1,440 -- -- 455,531 400,008 - 2,384,941 835,687 -- -- 7,224,476 6,097,005 346 -- 161,529 -- 234,296 274,528 - 2,611,161 837,127 161,529 116,927 20,909,582 19,378,782 J -- -- 30,237 -- 30,237 3,007 - -- -- -- - 2,526,694 2,820,162 -- -- -- 28,774 5,356,767 5,690,435 -J 8,438,057 -- -- -- 12,082,365 11,712,501 -- -- -- 3,746 3,988 -- 805,733 -- - 805,733 779,004 343,803 105,668 -- -- 1,718,546 1,762,378 200,232 52,402 -- -- 845,767 764,757 182,159 139 -- - 564,216 515,151 _- - -- -- -- 18,892 -- -- -- -- -- 221,567 9,164,251 963,942 30,237 28,774 23,934,071 24,291,842 L- (6,553,090) (126,815) 131,292 88,153 (3,024,489) (4,913,060) 6,750,000 175,146 - -- 7,575,583 7,288,988 L __ _ __ -- 30,000 -- 4 L - (135,868) -- -- (135,868) (160,868) r . -- -- -- -- (30,000) -- -- - -- -- (2,818,611) (2,497,557) 6,750,000 39,278 -- -- 4,621,104 4,630,563 196,910 (87,537) 131,292 88,153 1,596,615 (282,497) 910,604 206,696 503,377 197,025 7,496,782 7,779,279 $1,107,514 $119,159 $634,669 $ 285,178 $ 9,093,397 $ 7,496,782 r r - 77 - O 0 . r COUNTY OF HAWAII n 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, 1998 Parking Meter Highway Fund Fund Sewer Fund Budget Actual Budg Actual Budget Actual Revenues: Taxes $9,756,438 $9,912,278 $ -- $ -- $ -- $ -- j Licenses and permits 2,371,938 2,463,510 -- -- -- -- Intergovernmental 270,000 216,217 -- -- 9,500 9,500 c Charges for current services 180,000 101,202 142,500 82,036 4,213,299 3,820,344 Miscellaneous 40,100 55,495 -- 78 100 9,229 Total revenues 12,618,476 12,748,702 142,500 82,114 4,222,899 3,839,073 Expenditures: t-- Current General government -- `-' Public safety 3,049,891 2,731,535 139,955 103,975 -- -- Highways and streets 7,685,846 6,201,151 -- -- -- -- Sanitation -- -- -- -- 3,732,809 2,919,258 Health, education & welfare 12,000 3,746 -- -- -- -- Culture and recreation -- -- .-- -- -- -- Pension and retirement contributions 998,739 926,056 21,846 21,395 397,200 315,367 Health fund 452,231 452,231 9,699 9,699 132,330 129,891 Miscellaneous 633,738 322,357 5,000 -- 1,168,914 118,806 Total expenditures 12,832,445 10,637,076 176,500 135,069 5,431,253 3,483,322 Excess (deficiency) of revenues over expenditures (213,969) 2,111,626 (34,000) (52,955) (1,208,354) 355,751 Other financing sources (uses): Operating transfers in -- -- 30,000 30,000 650,437 650,437 Operating transfers out (3,008,188) (2,848,611) -- -- -- -- r Total other financing sources (uses) (3,008,188) (2,848,611) 30,000 30,000 650,437 650,437 Excess (deficiency) of revenues and other r sources over expenditures and other uses (3,222,157) (736,985) (4,000) (22,955) (557,917) 1,006,188 Fund balance at beginning of year 3,568,040 3,568,040 42,129 42,129 1,432,620 1,432,620 Fund balance at end of year $345,883 $2,831,055 $38,129 $19,174 $874,703 $2,438,808 _ 0 i t- - 78 - 0 0 r L 1 J 0 Bikeway Fund Cemetery Fund Vehicle Disposal Fund Solid Waste Fund Golf Course Fund _- Budget Actual Budget Actual Budget Actual Budget Actual Budget Actual $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- 20,000 34,872 -- -- 440,000 467,692 -- -- -- -- _ -- -- -- -- -- -- 216,000 228,500 2,700 1,440 -- -- -- -- 100 266 2,815,000 2,384,941 836,175 835,687 -- -- - 7,000 100 619 -- 346 -- -- 20,000 34,872 -- 7,000 440,200 468,577 3,031,000 2,613,787 838,875 837,127 J 30,000 21,189 -- -- -- -- -- -- - 626,474 534,562 10,539,517 8,748,508 -- -- -- -- -- -- -- -- -- -- -- -- 797,183 768,551 -- -- -- -- 6,413 6,257 343,803 343,803 105,702 105,668 _- -- -- -- 1,313 1.313 200,232 200,232 52,402 52,402 -- -- -- -- 6,000 -- 287,604 179,962 2,362 139 - 30,000 21,189 -- -- 640,200 542,132 11,371,156 9,472,505 957,649 926,760 (10,000) 13,683 -- 7,000 (200,000) (73,555) (8,340,156) (6,858,718) (118,774) (89,633) ` -- -- -- -- -- -- 7,842,157 6,750,000 175,146 175,146 r -- -- -- -- __ -- -- (135,868) (135,868) L -- -- -- -- -- -- 7,842,157 6,750,000 39,278 39,278 - - (10,000) 13,683 -- 7,000 (200,000) (73,555) (497,999) (108,718) (79,496) (50,355) r- 22,158 22,158 17,400 17,400 596,733 596,733 910,604 910,604 206,696 206,696 L- $12,158 $35,841 $17,400 $24,400 $396,733 $523,178 $412,605 $801,886 $127,200 $156,341 - (Continued) r L ✓ - 79 - 0 Q COUNTY OF HAWAII r l Special Revenue Funds (Concluded) Combining Schedule of Revenues, Expenditures and Changes in Fund Balances - fl Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 1998 ,_ Total Special Revenue Funds - Geothermal Relocation Variance Revolving Fund Beautification Fund Favorable Budget Actual Budget Actual Budget Actual (Unfavorable) Revenues: .- Taxes $ -- $ -- $ -- $ -- $9,756,438 $9,912,278 $155,840 Licenses and permits -- -- 115,000 116,927 2,946,938 3,083,001 136,063 '- Intergovernmental -- -- -- -- 498,200 455,657 (42,543) r Charges for current services -- -- -- -- 8,187,074 7,224,476 (962,598) Miscellaneous 148,000 161,529 -- -- 188,300 234,296 45,996 - Total revenues 148,000 161,529 115,000 116,927 21,576,950 20,909,708 (667,242) - Expenditures: Current: General government 142,577 130,666 -- -- 142,577 130,666 11,911 '-' Public safety -- -- -- -- 3,189,846 2,835,510 354,336 ,_. Highways and streets -- -- 115,000 57,816 7,830,846 6,280,156 1,550,690 Sanitation -- -- -- -- 14,898,800 12,202,328 2,696,472 r- Health, education & welfare -- -- -- -- 12,000 3,746 8,254 Culture and recreation -- -- -- -- 797,183 768,551 28,632 Pension and retirement contributions 2,879 -- -- -- 1,876,582 1,718,546 158,036 r, Health fund 2,544 -- -- -- 850,751 845,768 4,983 Miscellaneous -- -- -- -- 2,103,618 621,264 1,482,354 - Total expenditures 148,000 130,666 115,000 57,816 31,702,203 25,406,535 6,295,668 -1 Excess (deficiency) of revenues - over expenditures -- 30,863 -- 59,111 (10,125,253) (4,496,827) 5,628,426 Other financing sources (uses): Operating transfers in -- -- -- -- 8,697,740 7,605,583 (1,092,157) Operating transfers out -- -- -- -- (3,144,056) (2,984,479) 159,577 - Total other financing sources (uses) -- -- -- -- 5,553,684 4,621,104 (932,580) Excess (deficiency) of revenues and other r sources over expenditures and other uses -- 30,863 -- 59,111 (4,571,569) 124,277 4,695,846 _, Fund balance at beginning of year 503,377 503,377 197,025 197,025 7,496,782 7,496,782 -- _■ Fund balance at end of year $503,377 $534,240 $197,025 $256,136 $2,925,213 $7,621,059 $4,695,846 r J -80- r 0 0 COUNTY OF HAWAII Highway Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 1998 ,_ Variance Favorable Budget Actual (Unfavorable) Revenues: Taxes: r Fuel tax $ 6,132,188 $ 5,832,429 ($299,759) t. Public utility franchise tax 3,624,250 4,079,849 455,599 Total taxes 9,756,438 9,912,278 155,840 Licenses and permits - motor vehicle weight taxes 2,371,938 2,463,510 91,572 Intergovernmental 270,000 216,217 (53,783) Charges for current services 180,000 101,202 (78,798) Miscellaneous 40,100 55,495 15,395 Total revenues 12,618,476 12,748,702 130,226 Expenditures: r Public safety - traffic engineering 3,049,891 2,731,535 318,356 Highways and streets 7,685,846 6,201,151 1,484,695 Health, education & welfare 12,000 3,746 8,254 Pension and retirement contributions 998,739 926,056 72,683 c Health fund 452,231 452,231 -- Miscellaneous 633,738 322,357 311,381 Total expenditures 12,832,445 10,637,076 2,195,369 Excess (deficiency) of revenues over expenditures (213,969) 2,111,626 2,325,595 Other financing uses: Operating transfers out: Parking Meter Fund (30,000) (30,000) -- Capital Projects Fund (2,978,188) (2,818,611) 159,577 Total other financing uses (3,008,188) (2,848,611) 159,577 i_. Deficiency of revenues over expenditures and other uses (3,222,157) (736,985) 2,485,172 ri Fund balance at beginning of year 3,568,040 3,568,040 -- Fund balance at end of year $ 345,883 $ 2,831,055 $2,485,172 U r , - 81 - L 0 0 r • J COUNTY OF HAWAII Parking Meter Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - fl Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 1998 — Variance Favorable Budget Actual (Unfavorable) �Q Revenues: Charges for current services - highways and streets $142,500 $82,036 ($60,464) Miscellaneous -- 78 78 Total revenues 142,500 82,114 (60,386) r Expenditures: Public safety - parking 139,955 103,975 35,980 Pension and retirement contributions 21,846 21,395 451 — Health fund 9,699 9,699 -- Miscellaneous 5,000 -- 5,000 Total expenditures 176,500 135,069 41,431 r' Deficiency of revenues over expenditures (34,000) (52,955) (18,955) Other financing sources: r Operating transfers in - Highway Fund 30,000 30,000 -- a Deficiency of revenues and other sources over expenditures (4,000) (22,955) (18,955) r Fund balance at beginning of year 42,129 42,129 -- Fund balance at end of year $38,129 $19,174 ($18,955) r L. C r -J '-4 r - 82- (� C 0 0 --- COUNTY OF HAWAII Sewer Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - - Budget and Actual (Budgetary Basis) r For the Fiscal Year Ended June 30, 1998 — Variance _ Favorable Budget Actual (Unfavorable) Revenues: Intergovernmental $ 9,500 $ 9,500 -- Charges for current services - sewer fees 4,213,299 3,820,344 ($392,955) Miscellaneous 100 9,229 9,129 Total revenues 4,222,899 3,839,073 (383,826) L. Expenditures: r- Sanitation 3,732,809 2,919,258 813,551 Pension and retirement contributions 397,200 315,367 81,833 Health fund 132,330 129,891 2,439 Miscellaneous 1,168,914 118,806 1,050,108 Total expenditures 5,431,253 3,483,322 1,947,931 — Excess (deficiency) of revenues over expenditures (1,208,354) 355,751 1,564,105 Other financing sources: Operating transfers in - General Fund 650,437 650,437 -- Excess (deficiency) of revenues and other sources L� over expenditures (557,917) 1,006,188 1,564,105 — Fund balance at beginning of year 1,432,620 1,432,620 -- Fund balance at end of year $874,703 $2,438,808 $1,564,105 C , , - 83- 0 0 r- 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, 1998 Variance — Favorable Budget Actual (Unfavorable) Revenues - licenses and permits - bicycle tax $20,000 $34,872 $ 14,872 Expenditures - highways and streets 30,000 21,189 8,811 C Excess (deficiency) of revenues over expenditures (10,000) 13,683 23,683 Fund balance at beginning of year 22,158 22,158 -- Fund balance at end of year $12,158 $35,841 $23,683 C 0 -J r C -J [ -54- r O O L . 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, 1998 Variance Favorable Budget Actual (Unfavorable) Revenues - miscellaneous - sale of cemetery plots $ -- $ 7,000 $7,000 Fund balance at beginning of year 17,400 17,400 -- Fund balance at end of year $17,400 $24,400 $7,000 -J r r L- r n r r -85 L 0 0 COUNTY OF HAWAII Vehicle Disposal Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 1998 Variance -- Favorable Budget Actual (Unfavorable) ` Revenues: Licenses and permits - vehicle disposal fee $440,000 $467,692 $ 27,692 Charges for services - towing charges 100 266 166 Miscellaneous 100 619 519 Total revenues 440,200 468,577 28,377 Expenditures: Sanitation 626,474 534,562 91,912 r, Pension and retirement contributions 6,413 6,257 156 Health fund 1,313 1,313 -- 1 _ , Miscellaneous 6,000 -- 6,000 Total expenditures 640,200 542,132 98,068 Deficiency of revenues over expenditures (200,000) (73,555) 126,445 m Fund balance at beginning of year 596,733 596,733 -- Fund balance at end of year $396,733 $523,178 $126,445 J r r 86 - 0 0 COUNTY OF HAWAII Solid Waste Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - — Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 1998 J Variance Favorable Budget Actual (Unfavorable) Revenues: Intergovernmental $ 216,000 $ 228,500 $ 12,500 Charges for services - tipping fees 2,815,000 2,384,941 (430,059) Miscellaneous -- 346 346 Total revenues 3,031,000 2,613,787 (417,213) Expenditures: Sanitation 10,539,517 8,748,508 1,791,009 Pension and retirement contributions 343,803 343,803 - - Health fund 200,232 200,232 -- Miscellaneous 287,604 179,962 107,642 Total expenditures 11,371,156 9,472,505 1,898,651 Deficiency of revenues over expenditures (8,340,156) (6,858,718) 1,481,438 Other financing sources: Operating transfers in - General Fund 7,842,157 6,750,000 (1,092,157) Deficiency of revenues and other sources over expenditures (497,999) (108,718) 389,281 Fund balance at beginning of year 910,604 910,604 -- Fund balance at end of year $412,605 $801,886 $389,281 C r -87 L 0 0 COUNTY OF HAWAII — Golf Course Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Budgetary Basis) " For the Fiscal Year Ended June 30, 1998 Variance — Favorable Budget Actual (Unfavorable) Revenues: Intergovernmental $ 2,700 $ 1,440 ($1,260) Charges for services 836,175 835,687 (488) — Total revenues 838,875 837,127 (1,748) Expenditures: Culture and recreation 797,183 768,551 28,632 Pension and retirement contributions 105,702 105,668 34 —, Health fund 52,402 52,402 — Miscellaneous 2,362 139 2,223 -- Total expenditures 957,649 926,760 30,889 Deficiency of revenues over expenditures (118,774) (89,633) 29,141 — Other financing sources (uses): —i Operating transfers in - General Fund 175,146 175,146 -- Operating transfers out - General Fund (135,868) (135,868) — _ Total other financing sources (uses) 39,278 39,278 -- _ Deficiency of revenues and other sources `' over expenditures and other uses (79,496) (50,355) 29,141 Fund balance at beginning of year 206,696 206,696 -- Fund balance at end of year $ 127,200 $ 156,341 $29,141 J 1 J - 88 - — 0 0 COUNTY OF HAWAII Geothermal Relocation Revolving Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - J Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 1998 Variance Favorable 7 Budget Actual (Unfavorable) Revenues - miscellaneous - geothermal royalties $148,000 $161,529 $13,529 Expenditures: General government 142,577 130,666 11,911 Pension and retirement contributions 2,879 -- 2,879 Health fund 2,544 -- 2,544 Total expenditures 148,000 130,666 17,334 Excess of revenues over expenditures -- 30,863 30,863 Fund balance at beginning of year 503,377 503,377 -- f Fund balance at end of year $503,377 $534,240 $30,863 E n L r L - 89- O 0 C 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, 1998 ^ Variance L Favorable Budget Actual (Unfavorable) L Revenues - licenses and permits - highway beautification $115,000 $116,927 $ 1,927 '—' Expenditures - highways and streets 115,000 57,816 57,184 Excess of revenues over expenditures -- 59,111 59,111 --• Fund balance at beginning of year 197,025 197,025 -- -- Fund balance at end of year $197,025 $256,136 $59,111 P L r L J r L -90- r + 0 0 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 r- 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. r 0 0 COUNTY OF HAWAII Debt Service Funds r Combining Balance Sheet June 30, 1998 r (With comparative totals for June 30, 1997) General Obligation Bonds Bond 1978 Totals Interest Redemption Sinking Fund Fund Fund 1998 1997 Assets r _ Cash and investments: Cash and cash equivalents $ -- $ 291,837 $ -- $ 291,837 $ 1,061,345 Investments 226,998 8,463,566 11,186,613 19,877,177 18,126,256 Total assets $226,998 $8,755,403 $11,186,613 $20,169,014 $19,187,601 r _ Liabilities and Fund Balances Liabilities: Accrued interest payable $128,865 $ -- $ -- $ 128,865 $ 137,528 Bonds payable — 105,150 — 105,150 340,150 Total liabilities 128,865 105,150 -- 234,015 477,678 Fund balances: Reserved for debt service - redemption of bonds and interest thereon 98,133 8,650,253 11,186,613 19,934,999 18,709,923 Total liabilities and fund balances $226,998 $8,755,403 $11,186,613 $20,169,014 $19,187,601 V 1 - 91- 0 0 . COUNTY OF HAWAII — Debt Service Funds — Combining Statement of Revenues, Expenditures and Changes in Fund Balances For the Fiscal Year Ended June 30, 1998 (With comparative totals for the fiscal year ended June 30, 1997) General Obligation Bonds Bond 1978 Totals _ Interest Redemption Sinking Fund Fund Fund 1998 1997 Revenues - interest $ -- $ -- $ 932,759 $ 932,759 $ 939,355 Expenditures: Interest and finance charges 7,724,699 -- -- 7,724,699 7,597,938 _ Principal retirement -- 6,422,996 -- 6,422,996 5,984,439 Total expenditures 7,724,699 6,422,996 -- 14,147,695 13,582,377 Excess (deficiency) of revenues over expenditures (7,724,699) (6,422,996) 932,759 (13,214,936) (12,643,022) -, Other financing sources (uses): — Operating transfers in - General Fund 7,542,708 7,830,063 -- 15,372,771 13,621,670 Operating transfers out - — General Fund -- -- (932,759) (932,759) (939,355) Total other financing sources (uses) 7,542,708 7,830,063 (932,759) 14,440,012 12,682,315 — Excess (deficiency) of revenues and other sources over expenditures and other uses (181,991) 1,407,067 -- 1,225,076 39,293 Fund balances at beginning of year 280,124 7,243,186 11,186,613 18,709,923 18,670,630 Fund balances at end of year $ 98,133 $8,650,253 $11,186,613 $19,934,999 $18,709,923 U J J -92- — 0 0 • r r CAPITAL PROJECTS FUNDS CAPITAL PROJECTS FUND - Used to account for the costs of constructing _ County capital improvements financed with general obligation bond proceeds, federal and state grants, and general and special revenue fund revenues. 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 �y special assessment bonds. • r r r C r - 0 0 r. COUNTY OF HAWAII L_. Capital Projects Funds r Combining Balance Sheet June 30, 1998 (With comparative totals for June 30, 1997) Capital Improvement Improvement Totals Projects District District Fund No. 16 No. 17 1998 1997 L. Assets Cash and investments: Cash and cash equivalents $ 6,971,757 $211,772 $838,155 $ 8,021,684 $ 3,699,158 Investments 33,100,000 -- -- 33,100,000 37,500,000 Total cash and investments 40,071,757 211,772 838,155 41,121,684 41,199,158 - Receivables: r , Due from other governments: State of Hav4aii 102,815 -- -- 102,815 197,920 Federal government 1,786,546 -- -- 1,786,546 3,352,913 Total due from other governments 1,889,361 -- -- 1,889,361 3,550,833 Due from other funds 211,073 -- -- 211,073 571,792 Private contributions receivable 2,015 -- -- 2,015 2,015 Total receivables 2,102,449 -- -- 2,102,449 4,124,640 Restricted assets - cash and cash equivalent 224,727 -- -- 224,727 218,519 Total assets $42,398,933 $211,772 $838,155 $43,448,860 $45,542,317 (I Liabilities CI and Fund Balances Liabilities: r Warrants payable $ 1,224,397 $ -- $ -- $ 1,224,397 $ 1,026,217 _ Accounts payable 1,977,260 -- -- 1,977,260 553,712 Due to other funds 2,757 -- -- 2,757 102 1' Deferred intergovernmental revenue 355,086 -- - 355,086 188,267 Other 170,351 -- -- 170,351 171,466 Total liabilities 3,729,851 -- -- 3,729,851 1,939,764 Fund balances: _. Reserved for: Encumbrances 17,208,400 -- 9,153 17,217,553 6,853,073 Unexpended allotments 6,128,694 - 827,931 6,956,625 15,837,086 Total reserved fund balance 23,337,094 -- 837,084 24,174,178 22,690,159 J Unreserved: Designated for: F Road repairs 1,537,891 -- -- 1,537,891 6,101,662 Development impact 528,691 -- -- 528,691 -- SRF projects 2,534,028 -- - 2,534,028 66,750 r Total designated fund balance 4,600,610 -- -- 4,600,610 6,168,412 Undesignated 10,731,378 211,772 1,071 10,944,221 14,743,982 Total fund balances 38,669,082 211,772 838,155 39,719,009 43,602,553 Total liabilities and fund balances $42,398,933 $211,772 $838,155 $43,448,860 $45,542,317 C - 93- 0 0 COUNTY OF HAWAII -, Capital Projects Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances For the Fiscal Year Ended June 30, 1998 r (With comparative totals for the fiscal year ended June 30, 1997) Capital Improvement Improvement Totals — Projects District District Fund No. 16 No. 17 1998 1997 r Revenues: Intergovernmental $ 3,482,093 $ -- $ -- $ 3,482,093 $ 7,691,536 Interest 7,391 -- -- 7,391 11,035 Miscellaneous: Developer's contributions 436,426 -- -- 436,426 204,348 Other 123 -- 31,121 31,244 5,670 Total revenues 3,926,033 -- 31,121 3,957,154 7,912,589 Expenditures: ^., General government -- -- -- -- 6,612,542 Public safety 974,005 -- -- 974,005 2,662,597 — Highways and streets 4,553,000 -- -- 4,553,000 6,720,237 Sanitation 4,467,424 -- -- 4,467,424 9,096,965 Culture and recreation 2,091,260 -- — 2,091,260 5,339,131 Miscellaneous 1,014 -- 10,269 11,283 26,953 — Total expenditures 12,086,703 -- 10,269 12,096,972 30,458,425 — Excess (deficiency) of revenues over v expenditures (8,160,670) -- 20,852 (8,139,818) (22,545,836) Other financing sources: State Revolving Fund loans 1,404,908 -- -- 1,404,908 7,320,355 Federal loans -- -- -- -- 4,772,500 Proceeds from sale of bonds (1996 Series A) -- -- -- -- 15,098 —, Operating transfers in: General Fund 117,755 -- -- 117,755 560,427 ,— Park Dedication Fund -- -- -- -- 9,277 Highway Fund 2,818,611 -- -- 2,818,611 2,497,557 `' Operating transfers out: J General Fund (85,000) -- -- (85,000) -- Total other financing sources 4,256,274 -- -- 4,256,274 15,175,214 Excess (deficiency) of revenues and other sources over expenditures (3,904,396) -- 20,852 (3,883,544) (7,370,622) r'I Fund balances at beginning of year 42,573,478 211,772 817,303 43,602,553 50,973,175 Fund balances at end of year $38,669,082 $211,772 $838,155 $39,719,009 $43,602,553 n -94- — 0 0 Capital Projects Fund Schedule of Appropriations, Expenditures and Encumbrances - 0 Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 1998 r Authonzations 1997 Encumbrances Lapsed Project Title Forwarded Appropriations Total Expenditures Encumbrances Balances - Public Safety: Fire: Kawailani Fire Station Garage $ - $ 10,000 $ 10,000 $ - $ 5,900 $ 4,100 Kawailani Fire Station Apparatus 25,000 25,000 25,000 - HPP Volunteer Fire Station Water 1,000,000 1,000,000 2,200 997,800 Fire Maintenance Shop Extension 3,384 - 3,384 - 3,384 - r ,,, Waikoloa Fire Station 866,905 - 866,905 866,894 - 11 Keauhou Fire /Emergency Station 62,679 - 62,679 2,793 - 59,886 Waikoloa Fire Station 75,672 - 75,672 75,479 - 193 HOVE Fire House - 33,000 33,000 30,586 2,414 - ,-- Waimea /Central Fire Station Retrofit - 40,000 40,000 - 40,000 - Total Fire 2,008,640 108,000 2,116,640 975,752 78,898 1,061,990 • Police: Pohce Air Duct Removal 479,845 - 479,845 3,101 403,343 73,401 _, Islandwide Communication Tower Replacement 315,000 - 315,000 2,812 312,188 - --.., Total Police 794,845 - 794,845 5,913 715,531 73,401 _ Flood Control: Alenaio Stream Flood Control 1,127,325 - 1,127,325 19,386 - 1,107,939 C Kukuau- Kapiolani Drainage 239,349 (210,565) 28,784 28,784 - - Mauna Iho Drainage Improvements 44,408 (36,350) 8,058 8,058 - - _ East Hawau Drainage Improvements - 246,915 246,915 32,889 214,026 - North Kona Dramage Improvements 54,780 - 54,780 2,346 28,800 23,634 East Hawau Drywell Improvements 10,277 - 10,277 10,277 - - West Hawaii Drainage Improvements - 100,000 100,000 - 100,000 - u Total Flood Control 1,476,139 100,000 1,576,139 101,740 342,826 1,131,573 r Total Pubhc Safety 4,279,624 208,000 4,487,624 1,083,405 1,137,255 2,266,964 Highways and Streets: ✓ Puna Highway /Traffic Division Projects - 159,600 159,600 25,188 134,412 - Nanawale Estates Road Improvements - 200,000 200,000 - 200,000 - �-+ Puna Highway /Traffic Division Projects - 1,986 1,986 1,942 44 - Puna Emergency Access Road 1,682 - 1,682 - - 1,682 Puna Highway Infrastructure - Federal Funds - 500,000 500,000 - 500,000 - South Kopua Road 9,648 - 9,648 9,648 - - -, Puna Highway /Traffic Division Projects 92,580 - 92,580 92,580 - - South Kopua Road 13,019 - 13,019 12,971 - 48 Q Old Volcano Road - Private 8,060 - 8,060 - 8,060 - Puna Emergency Access Road 927,349 927,349 15,943 911,406 - Manono Street- Kekuanaoa Street Signals 16,381 16,381 16,381 South Hilo Highway Safety 37,120 - 37,120 37,120 - - r, Mohouli Extension - Federal Funds 3,586,900 - 3,586,900 - 3,586,900 - Mohouh Extension - County Funds 246,129 - 246,129 105,076 141,053 - Hilo Road Improvements Phase 2 - Federal Funds 655,309 - 655,309 290,198 - 365,111 Hilo Road Improvements Phase 2 - County Funds 12,187 - 12,187 12,187 - - • South Hilo Highway /Traffic Division Projects 51,483 - 51,483 51,483 - - Hilo Roads Phase II 67,624 - 67,624 50,845 - 16,779 (Continued) r - 95 - 0 0 , r- 4 Capital Projects Fund r i ,_-) Schedule of Appropriations, Expenditures and Encumbrances - Budget and Actual (Budgetary Basis) r For the Fiscal Year Ended June 30, 1998 (Continued) Authonzahons --1 1997 Encumbrances Lapsed "- Project Title Forwarded Appropriations Total Expenditures Encumbrances Balances Highways and Streets, continued Kaumana Drive Wall /Guardrail 65,000 (65,000) - - - - - Haaheo School Sidewalks 240,150 - 240,150 140,935 99,215 - Komohana-Mohouli Traffic Signal - Federal Funds 156,276 - 156,276 20,547 - 135,729 i Ululam Street Phase II - 250,000 250,000 - - 250,000 South Hilo Highway /Traffic Division Projects 180,149 - 180,149 180,149 - - Lamkaula -Manono Traffic Signal - County Funds 214,072 - 214,072 81,434 27,852 104,786 Lamkaula -Manono Traffic Signal - Federal Funds 565,000 - 565,000 - 565,000 - e-1 Komohana Bridge - Federal Funds 240,000 - 240,000 59,697 180,303 - Komohana Bridge - County Funds 60,000 - 60,000 14,924 15,879 29,197 ' Kaahakini Bridge - Federal Funds 588,000 - 588,000 910 587,090 - - Kaahakuu Bridge - County Funds 147,000 - 147,000 - 22,000 125,000 Reeds Island Bndge - Federal Funds 2,000,666 - 2,000,666 15,000 1,985,666 - Reeds Island Bridge - County Funds 503,596 - 503,596 161 390,000 113,435 Mohouli Street Improvements 375,000 - 375,000 282 374,718 - Kawailam /Pohakulam /Amaola /Iwalam Streets 250,000 - 250,000 95,867 154,133 - -' Haaheo School Sidewalk Improvements 156,350 - 156,350 1,302 155,048 - . Kaumana /Ainako Signal - Federal Funds 546,591 - 546,591 244,197 64,559 237,835 Honomu /Mamalahoa Bridge - Federal Funds 124,000 - 124,000 158 123,842 - Honomu / Mamalahoa Bridge - County Funds - 31,000 31,000 563 30,437 - t'- Kalaoa /Mamalahoa Bndge - Federal Funds 108,000 - 108,000 932 107,068 - J Kalaoa /Mamalahoa Bridge - County Funds - 27,000 27,000 - 27,000 - Onomea Camp Road Bridge - Federal Funds 72,000 - 72,000 37,079 34,921 - (� Onomea Camp Road Bndge - County Funds - 18,000 18,000 9,230 8,770 - L Hilo Road Improvements Phase III - Federal Funds 65,976 - 65,976 7,157 58,819 - Komohana /Ponahawai Signal - Federal Funds 2,011,755 - 2,011,755 3,179 2,008,576 - Saddle Road Resurfacing - 1,345,000 1,345,000 43,236 1,301,764 - Mohouli Street Extension - 92,000 92,000 - 92,000 - Hilo Road Improvements - 120,000 120,000 2,508 117,492 - South Hilo Highway /Traffic Division Projects - 15,166 15,166 15,166 - - Hilo Road Improvements Phase III - County Funds - 900,650 900,650 - 900,650 - KaptolaniStreet - 700,000 700,000 - 700,000 - South Hilo Highway /Traffic Division Projects - 60,224 60,224 55,546 4,678 - J Haaheo School Sidewalk Improvements - 200,000 200,000 3,479 196,521 - Hilo Road Improvements Phase III - Federal Funds - 4,000,000 4,000,000 - 4,000,000 - Waiakea Houselots Resurfacing - 250,000 250,000 - 250,000 - North Hilo Highway /Traffic Division Projects 24,472 - 24,472 24,472 - - Hamakua Highway /Traffic Division Projects 72,176 - 72,176 72,176 - - Kalopa /Mamalahoa Bridge - Federal Funds 840,000 - 840,000 19,567 820,433 - Kalopa /Mamalahoa Bndge - County Funds 210,000 - 210,000 4,576 15,989 189,435 Opea / Mamalahoa Bndge - Federal Funds 564,000 - 564,000 - 564,000 - .-. Opea / Mamalahoa Bridge - County Funds 141,000 - 141,000 - - 141,000 Waikaalulu / Mamalahoa Bridge - Federal Funds 840,000 - 840,000 19,451 820,549 - Waikaa lulu /Mamalahoa Bndge - County Funds 210,000 - 210,000 4,576 15,989 189,435 Kuwa kaki Culvert Replacement 40,000 (40,000) - - - - Big Hill Culvert Replacement 40,000 (40,000) - - - - Inomo Bndge Replacement - Federal Funds - 124,000 124,000 19,450 104,550 - t, Inomo Bridge Replacement - County Funds - 31,000 31,000 4,507 26,493 - North Hilo Highway /Traffic Division Projects - 8,411 8,411 - 8,411 - North Hilo Highway /Traffic Division Projects - 100,350 100,350 - 100,350 - Hamakua Highway /Traffic Division Projects - 1,844 1,844 - 1,844 - Hamakua Highway /Traffic Division Projects - 114,600 114,600 - 114,600 - (Continued) -96- . 0 0 r Capital Projects Fund Schedule of Appropriations, Expenditures and Encumbrances - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 1998 (Continued) Authorizations ,_, 1997 Encumbrances Lapsed Project Title Forwarded Appropnahons Total Expenditures Encumbrances Balances _ Highways and Streets, contmued: Ahualoa Homestead Road - 150,000 150,000 - 150,000 - North Hilo Highway /Traffic Division Projects - 82,400 82,400 32,717 49,683 - til Hamakua Highway /Traffic Division Projects 5,973 5,973 5,973 Hamakua Wooden Bridges and Road Repairs 62,250 62,250 62,250 - Waipio Valley Road 25,084 - 25,084 25,084 - - r -, Kalopa Bypass /Sand Gulch 7,825 - 7,825 6,825 1,000 - Mamalahoa/Waimea Town 498,149 - 498,149 64,044 434,105 - North Kohala Highway /Traffic Division Projects 27,736 - 27,736 27,736 - - Mamalahoa /Lindsey- Kamamalu 30,182 - 30,182 4,875 25,307 - r. Mamalahoa /Waimea Town 400,000 - 400,000 - 400,000 - Lmdsey Road Improvements - Federal Funds 2,186,217 - 2,186,217 5 2,186,212 - Lindsey Road Improvements - County Funds 500,000 - 500,000 - 500,000 - North Kohala Highway /Traffic Division Projects - 66,553 66,553 - 66,553 - ,-- , South Kohala Highway /Traffic Division Projects - 29,450 29,450 - 29,450 - Mamalahoa /Lindsey - Kamamalu - 125,000 125,000 202 124,798 - - North Kohala Highway /Traffic Division Projects - 132,750 132,750 - 132,750 - South Kohala Highway /Traffic Division Projects - 132,950 132,950 - 132,950 - Kamamalu Street - 250,000 250,000 - 250,000 - Mamalahoa /Lindsey- Kamamalu - Federal Funds - 5,200,000 5,200,000 47,319 5,152,681 - North Kohala Highway /Traffic Division Projects - 632 632 - 632 - South Kohala Highway /Traffic Division Projects - 17,570 17,570 - 17,570 r - Waikoloa Road Shoulder Improvements - Federal - 1,200,000 1,200,000 4,823 1,195,177 - Waikoloa Road Shoulder Improvements - County - 300,000 300,000 - 300,000 - - Mamalahoa /Lindsey- Kamamalu- Private - 71,414 71,414 - 71,414 - Mamalahoa/Lindsey-Kamamalu - Pnvate - 48,670 48,670 - 48,670 - Alii Dnve Design and Archeological Study - Federal funds 1,284,097 - 1,284,097 282 1,283,815 - - Ahi Highway, Pnvate Funds 225,104 - 225,104 94 225,010 - Kona Road Improvements - Federal Funds 374,121 - 374,121 66,939 307,182 - r - Kuakuu /Palani Road - Hualalai 19,515 - 19,515 12,068 7,447 - Kaloko/Mamalahoa Hwy - Private Funds 48,000 - 48,000 - 48,000 - - Napoopoo /Mamalahoa Hwy - Pnvate Funds 161,250 - 161,250 - 161,250 - Kuakmi/ Palani Road - Hualalai 7,465 - 7,465 - 7,465 - r= Mamalahoa /Holualoa - Keauhou 15,110 - 15,110 9,665 5,445 - Kona Road Improvements - County Funds 9,957 - 9,957 3,678 - 6,279 U Kona Road Improvements - Federal 46,454 - 46,454 18,239 28,215 - Kona Road Improvements Phase II - County Fund - 445,435 445,435 2,700 252,980 189,755 t- Kuakmi Highway Improvements 126,185 - 126,185 43,063 6,569 76,553 Palani Road Sidewalks 150,000 - 150,000 - 150,000 - South Kona Highway /Traffic Division Projects 69,226 - 69,226 69,226 - - Alii Drive Bikeway Extension - 180,000 180,000 114,789 65,211 - O Ahi Dnve Bridge Replacement - County Funds - 125,000 125,000 125,000 - ' Alu Drive Bridge Replacement - Federal Funds 500,000 500,000 245 499,755 - Ahi Drive Shoreline Protection 53,000 53,000 53,000 - Kona Road Improvements Phase II - Federal Fund 4,708,800 - 4,708,800 540,457 4,168,343 - r Mamalahoa Highway Improvements - 300,000 300,000 - 300,000 - Kona Road Improvements - 120,000 120,000 5,199 114,801 - 4 - Kona Road Improvements Phase II - 262,316 262,316 - 262,316 - South Kona Highway /Traffic Division Projects - 48,656 48,656 48,656 - - r•- Kona Road Improvements Phase II - 777,600 777,600 - 777,600 - South Kona Highway /Traffic Division Projects - 249,300 249,300 15,287 234,013 - (Continued) -- - 97- 0 0 • . r --i Capital Projects Fund u Schedule of Appropriations, Expenditures and Encumbrances - Budget and Actual (Budgetary Basis) - For the Fiscal Year Ended June 30, 1998 (Continued) Authorizations 1997 Encumbrances Lapsed Project Title Forwarded Appropriations Total Expenditures Encumbrances Balances Highways and Streets, continued: Kona Road Improvements Phase II - 198,134 198,134 - 198,134 - 'J South Kona Highway /Traffic Division Projects - 96,087 96,087 95,641 446 - Ka'u Highway /Traffic Division Projects 67,300 - 67,300 67,300 - - Ka'u Highway /Traffic Division Projects - 76,293 76,293 - 76,293 - Ka'u Highway /Traffic Division Projects - 232,200 232,200 - 232,200 - �"' Ka'u Highway /Traffic Division Projects - 216,988 216,988 112,028 104,960 - Bndge Inspechon, Maintenance, Repair 22,590 - 22,590 22,590 - - r-.' Seismic Bridge Retrofit - Federal Funds 252,000 - 252,000 - 252,000 - Seismic Bndge Retrofit - County Funds 62,733 - 62,733 771 - 61,962 Island -wide Right -of -way Land Acquisition 99,300 - 99,300 30,179 69,121 - Manienie /Kaiwiki Bridge - Federal Funds 1,624,000 - 1,624,000 - 1,624,000 - Mamenie / Kaiwiki Bndge - 406,000 406,000 - 406,000 - Oshiro and Other Bridges - 2,000,000 2,000,000 16,940 1,983,060 - _ Circle Island Highway /Traffic Division Projects - 100,000 100,000 95,139 4,861 - ^ Bridge Replacement Program - 598,881 598,881 4,235 594,646 - Bridge Inspechon /Appraisal - Federal Funds 42,601 - 42,601 3,646 38,955 - Total Highways and Streets 30,155,602 24,279,432 54,435,034 3,520,280 48,664,352 2,250,402 r Sanitation and Waste Disposal. L Solid Waste Disposal. Hilo Landfill Closure 1,792 - 1,792 - 1,792 - Landfill Closure - 370,000 370,000 71,127 298,873 - Hilo Landfill Closure 30,719 - 30,719 9,914 20,805 - Kailua Landfill Closure 32,784 - 32,784 11,832 20,952 - Keauhou Transfer Station 699,713 - 699,713 32,779 666,934 - Keauhou Transfer Station 5,428 - 5,428 - 5,428 - Total Solid Waste Disposal 770,436 370,000 1,140,436 125,652 1,014,784 - Sewers' r Kapoho Wastewater System - 200,000 200,000 - 200,000 - Hilo Ocean Outfall - Federal funds 15,927 - 15,927 -- - 15,927 Hilo Wastewater System 33,632 - 33,632 - - 33,632 Hilo STP Demohhon /Rehabihtahon 700,000 - 700,000 51,450 648,550 - o Papaikou Collector Sewer 137,343 - 137,343 81,621 55,722 - Banyan Drive SPS Rehabilitation 250,000 - 250,000 - 250,000 - Ainako Interceptor Sewer A &B - SRF 318,548 - 318,548 1,597 316,951 - Walakea Pond Sewer Easement Improvements - 250,000 250,000 20,239 229,761 - Kamehameha Avenue Sewer Rehabilitation 719,731 - 719,731 381,814 337,917 - Waiakea Houselot Collector Sewer - SRF - 6,900,000 6,900,000 - 6,900,000 - Paukaa Collector Sewer - 181,108 181,108 2,358 178,750 - Houselots Collector Sewer Phase II - 11,160 11,160 121 11,039 - Hilo Wastewater Treatment Plant- Federal funds 180,983 - 180,983 - - 180,983 Waiakea Mill Pond Sewer 1,220 - 1,220 - - 1,220 Hilo Wastewater Treatment Plant II - EPA 26,794 - 26,794 - - 26,794 Old Waiakea Mill Sewer - State 28,758 - 28,758 - 28,758 - r Kamehameha Avenue Sewer Rehabilitation 152,152 - 152,152 142,512 9,640 -- Kaumana Gardens Sewer 125,228 - 125,228 81,801 43,427 - Houselots Collector Sewer 15,655 - 15,655 15,655 - - (Continued) - 98 - " 0 0 r Capital Projects Fund Schedule of Appropriations, Expenditures and Encumbrances - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 1998 (Continued) Authorizations 1997 Encumbrances Lapsed Protect Title Forwarded Appropnations Total Expenditures Encumbrances Balances Sanitation and Waste Disposal, continued: - Sewers, continued. Papaikou Collector System 485,488 - 485,488 184,441 301,047 - Hilo Ocean Outfall Loan Payback 173,000 173,000 172,500 500 Kamehameha Avenue Sewer 1,163,492 1,163,492 1,153,923 9,569 - Puako Wastewater System - 200,000 200,000 - 200,000 r• Kealakehe Wastewater Treatment Plant 111,140 - 111,140 11,517 99,623 - Kealakehe Wastewater Treatment Plant- Federal Fr 605,151 - 605,151 - - Kealakehe Effluent Disposal 96,139 - 96,139 - 96,139 - Old Kona Airport Sewer 164,252 - 164,252 4,478 - 159,774 Old Kona Airport Sewer Pumping Station and Force Main - Federal funds 930,004 - 930,004 - - 930,004 • Old Kona Airport Sewer Pumping Station & FM -! 267 - 267 - - 267 Alii Dnve/Waiaha Pump Station 33,343 - 33,343 - 33,343 - • Waiaha Bay SPS - SRF 159,509 - 159,509 157,821 1,688 - Ahi Dnve Interceptor Sewer - A &B - SRF 113,772 - 113,772 - 113,772 - - Kealakehe Wastewater Treatment Plant Expansior 308,347 - 308,347 - 308,347 - Alii Dnve Interceptor Sewer - C &D - SRF 175,609 - 175,609 175,609 - - - Ahi Drive Interceptor Sewer - E &F - SRF 772,354 - 772,354 115,487 593,764 63,103 Holualoa Bay SPS 1,600,550 - 1,600,550 1,009,992 186,383 404,175 ,_„ Disappearing Sands SPS 2,000,000 - 2,000,000 - - 2,000,000 Sewer Facility Rehabilitation 84,487 - 84,487 6,937 77,550 - • Waiaha Bay SPS - SRF 228,069 - 228,069 174,195 53,874 - Alu Drive Interceptor Sewer A &B - SRF 340,738 - 340,738 - 340,738 - ,, Kealakehe Sewage Effluent Disposal - 1,100,000 1,100,000 40,824 1,059,176 - Ahi Dnve Sewer/ Waiaha Pump Station - 250,000 250,000 - 250,000 - - Alit Drive Sewer Projects 72,517 - 72,517 34,949 37,568 - u Total Sewers 12,151399 9,265,268 21,416,467 4,021,841 12,973,096 4,421,530 ,-. Total Sanitation and Waste Disposal 12,921,635 9,635,268 22,556,903 4,147,493 13,987,880 4,421,530 - Culture and Recreation: Shipman Park Expansion and Improvements 1,209 - 1,209 - 1,209 - Kalapana Community Facility Improvement - 100,000 100,000 16,277 83,723 - 0 - Puna - Pahoa Swimming Pool 1,841 1,841 1,841 - Puna Parks 108,639 108,639 1,650 9,116 97,873 Keaau Park Ballpark /Tennis Lights 110,000 - 110,000 91,693 18,307 - - Pahoa Swimming Pool 125,042 - 125,042 125,042 - - Pahoa Swimming Pool 39,951 - 39,951 39,951 - - - Pohoiki Beach Park Expansion - 300,000 300,000 198,023 101,977 - Cooper Center Outdoor Court - 350,000 350,000 - 350,000 - C Puna Parks 1,000 1,000 - - 1,000 Hilo Bayfront Park Improvements 116,650 14,770 131,420 29,572 101,848 - Panaewa Zoo Primate Roof 80,000 80,000 75,787 4,213 - Downtown Hilo Landscape Improvements 135,000 - 135,000 - - 135,000 r•-) Panaewa Zoo Facility Improvements 185,204 11,200 196,404 170,505 25,899 - Park Improvements - District 2 15,100 86,827 101,927 9,410 92,517 - Palace Theater Improvements 57 - 57 - - 57 Onekahakaha Beach Park Improvements 52,330 - 52,330 - 52,330 - ,-- Keaukaha- Panaewa Gym Planning - 250,000 250,000 - 250,000 - Kawamoto Swim Stadium 128,744 - 128,744 125,207 3,537 - (Continued) -, - 99- 0 0 Capital Projects Fund Schedule of Appropriations, Expenditures and Encumbrances - Budget and Actual (Budgetary Basis) - For the Fiscal Year Ended June 30, 1998 -- (Concluded) Authorizations - 1997 Encumbrances Lapsed -J Protect Title Forwarded Appropnahons Total Expenditures Encumbrances Balances Culture and Recreation, continued: Hilo Municipal Golf Course Improvements - 9,648 9,648 5,698 3,950 - - Council District 4 Park Improvements - 44,960 44,960 8,899 36,061 - Council District 4 Park Improvements - 23,875 23,875 23,875 - - (� Kawamoto Swim Stadium - 600,000 600,000 266,272 333,728 - +� Hoolulu Complex Electrical Improvements - 75,000 75,000 63,157 11,843 - Hilo Bayfront Park Improvements - 118,580 118,580 216 118,364 - Kawamoto Swim Stadium 2,040 - 2,040 - 2,040 - '--' Kawamoto Swim Stadium Roof 180,900 - 180,900 180,900 - - Hilo Municipal Golf Course 1,345 - 1,345 - 1,345 - -" Panaewa Equestrian Center 3,503 - 3,503 3,503 - - WaiakeawaenaPlayground 2,710 - 2,710 2,710 - - Council District 1 Park Improvements 20,506 - 20,506 20,506 - - Council District 1 Park Improvements - 12,500 12,500 - 12,500 - _ Council District 9 Park Improvements 40,685 - 40,685 33,446 7,239 - New Waikoloa Park 108,000 66,850 174,850 87,114 87,736 - -' North /South Kohala Park 60,120 - 60,120 13,395 46,725 - Waimea Soccer Fields 25,000 - 25,000 5,001 19,999 - - Kailua Playground Park 894 - 894 - 894 - Kona Gym Showers /Lockers 250,000 - 250,000 - 250,000 - - Hookena Park Water Tank 11,711 - 11,711 7,345 4,366 - J 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 71,136 - 71,136 575 70,561 - Kona Swimming Pool 157,000 -- 157,000 129,000 28,000 - i_. Council District 8 Park Improvements 1,292 - 1,292 - 1,292 - Kona Swmumng Pool 500,000 - 500,000 - 500,000 - Kahuku Park Improvements - Pnvate 10,000 - 10,000 - 10,000 - �' Arthur Greenwell Park - 15,000 15,000 12,594 2,406 - J Kona Swimming Pool 674,516 - 674,516 21,056 653,460 - Hookena Beach Composting Toilets 100,000 - 100,000 1,717 98,283 - Park Improvements - District 7 2,720 - 2,720 2,720 - - r Miloli i Beach Composting Toilet - 15,000 15,000 - 15,000 - .J Hale Halewai Repairs /Improvements - 75,000 75,000 16,000 59,000 - Kona Swimming Pool - 3,000,000 3,000,000 - 3,000,000 - Council District 7 Park Improvements - 35,000 35,000 - 35,000 - Council District 8 Park Improvements - 23,600 23,600 - 23,600 - J Handicap Bamer Removal - 210,055 210,055 74,911 135,144 - Island-wide ADA Compliance - 500,000 500,000 22,601 477,399 - Wastewater System Upgrade - 100,163 100,163 - 100,163 - Handicap Bamer Removal 1,678 - 1,678 1,678 - - Total Culture and Recreation 3,376,765 6,038,028 9,414,793 1,889,847 7,291,016 233,930 Miscellaneous. J County Offices - Acquisition/Renovation 53,464 - 53,464 - - 53,464 East/ West Hawaii Office Renovation 3,770,147 - 3,770,147 16,069 280,100 3,473,978 Alae Cemetery Expansion 6,060 - 6,060 6,060 - - r Alae Cemetery Expansion - 50,000 50,000 - 50,000 - Ka'u Agricultura l Water System - State Funds 500,000 - 500,000 - 500,000 - `- Total Miscellaneous 4329,671 50,000 4,379,671 22,129 830,100 3,527,442 Total Capital Projects Fund $55,063,297 $40,210,728 $95,274,025 $10,663,154 $71,910,603 $12,700,268 -- - 100 - ,_ 0 0 r , J r C PROPRIETARY FUNDS ENTERPRISE FUNDS KULAIMANO ELDERLY HOUSING PROJECT - Used to account for the T 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 PROJECT - Used to account for the operation of a 33 -unit single - family affordable housing project located in J Waimea. Revenues are from rents collected. r J 0 r U r-^ L �> 0 0 0 COUNTY OF HAWAII Enterprise Funds Combining Balance Sheet June 30, 1998 - (With comparative totals for June 30, 1997) Kulaimano Ouli Ekahi Totals Elderly Affordable Housing Project Housing Project 1998 1997 Assets r Current assets: U Cash and cash equivalents $204,579 $ 10,467 $215,046 $381,516 Investments 500,000 500,000 500,000 Imprest fund 50 100 150 150 Accounts receivable 436 11,532 11,968 7,706 Interest receivable 1,033 106 1,139 1,761 Other receivable -- 849 849 546 Prepaid expenses 1,798 -- 1,798 2,417 _. Total current assets 707,896 23,054 730,950 894,096 Restricted assets - cash and cash equivalents: Tenant security deposits 8,367 18,703 27,070 25,685 -J Debt service reserve 165,288 -- 165,288 161,207 Operating reserve -- 13,318 13,318 40,149 0 Total restricted assets - cash and cash equivalents 173,655 32,021 205,676 227,041 Fixed assets: Land 250,000 503,877 753,877 753,877 a Buildings 1,136,008 -- 1,136,008 1,136,008 Grounds and site improvements 261,000 261,000 261,000 Furnishings and equipment 86,206 86,206 87,510 - 1,733,214 503,877 2,237,091 2,238,395 _ Accumlated depreciation (668,625) -- (668,625) (634,692) Fixed assets, net of accumulated depreciation 1,064,589 503,877 1,568,466 1,603,703 9 Total assets $1,946,140 $558,952 $2,505,092 $2,724,840 r (Continued) L 0 9 -101- 0 0 d • COUNTY OF HAWAII Enterprise Funds Combining Balance Sheet June 30, 1998 (With comparative totals for June 30, 1997) (Concluded) [, Kulaimano Ouli Ekahi Totals , Elderly Affordable J Housing Project Housing Project 1998 1997 Liabilities and equity [ Current liabilities: - 7 Warrants payable $ 12,361 $ 548 $ 12,909 $ 16,451 Accounts payable 522 -- 522 1,944 -r Due to developer -- 7,729 7,729 11,022 Unearned rental income 283 94 377 530 Notes payable - current 13,140 -- 13,140 12,280 - Total current liabilities 26,306 8,371 34,677 42,227 ~ Current liabilities payable from restricted assets - Customer deposits payable 8,908 17,482 26,390 23,421 - Notes payable 1,146,697 -- 1,146,697 1,159,451 _ Total liabilities 1,181,911 25,853 1,207,764 1,225,099 L 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 D Retained earnings (deficit): Reserved for debt service 165,288 -- 165,288 161,207 (- Unreserved 187,645 (11,268) 176,377 382,871 Total retained earnings (deficit) 352,933 (11,268) 341,665 544,078 Total equity 764,229 533,099 1,297,328 1,499,741 Total liabilities and equity $1,946,140 $558,952 $2,505,092 $2,724,840 L.) r t - 102 - - 0 C COUNTY OF HAWAII Enterprise Funds L Combining Statement of Revenues, Expenses and Changes in Retained Earnings (Deficit) For the Fiscal Year Ended June 30, 1998 (With comparative totals for the fiscal year ended June 30, 1997) n Kulaimano Ouli Ekahi Totals J Elderly Affordable Housing Project Housing Project 1998 1997 L Operating revenues: Rental receipts from tenants $ 78,249 $204,092 $282,341 $ 266,206 Rental subsidy from federal government - HUD 153,327 -- 153,327 156,332 Laundry receipts 3,010 -- 3,010 3,095 - Miscellaneous -- 3,882 3,882 2,604 Total operating revenues 234,586 207,974 442,560 428,237 Operating expenses: c ` Utilities 26,709 24,983 51,692 33,929 Maintenance and repairs 249,439 12,225 261,664 14,662 General and administration 61,223 98,640 159,863 178,278 Lease expense -- 82,207 82,207 76,226 Depreciation 41,398 41,398 44,640 Total operating expenses 378,769 218,055 596,824 347,735 ,� Operating income (loss) (144,183) (10,081) (154,264) 80,502 Nonoperating revenues (expenses): n Interest income 33,359 776 34,135 34,881 (J Interest expense on notes payable (82,018) (82,018) (83,256) Loss on disposal of assets (266) -- (266) -- Total nonoperating revenues (expenses) (48,925) 776 (48,149) (48,375) i_, Net income (loss) (193,108) (9,305) (202,413) 32,127 Retained earnings (deficit) at beginning of year 546,041 (1,963) 544,078 511,951 1 Retained earnings (deficit) at end of year $352,933 ($11,268) $341,665 $544,078 0 0 r L -, - 103- 0 0 • ,E COUNTY OF HAWAII Enterprise Funds Combining Statement of Cash Flows For the Fiscal Year Ended June 30, 1998 (With comparative totals for the fiscal year ended June 30, 1997) Kulaimano Ouli Ekahi Totals Elderly Affordable ,^ Housing Project Housing Project 1998 1997 Cash flows from operating activities: Cash received from tenants $ 81,314 $206,170 $287,484 $268,359 Cash received from federal government - HUD 153,327 -- 153,327 156,332 Cash payments to suppliers for goods and services (340,072) (222,992) (563,064) (290,441) Net cash provided by (used in) operating activities (105,431) (16,822) (122,253) 134,250 Cash flows from capital and related financing activities: Principal paid on notes payable (11,894) -- (11,894) (10,656) - Interest paid on notes payable (82,018) -- (82,018) (83,256) Acquisition and construction of capital assets (6,427) -- (6,427) (2,104) Capital contributions -- -- -- 3,245 Net cash used for capital and related financing activities (100,339) -- (100,339) (92,771) 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 33,809 948 34,757 34,719 Net cash provided by investing activities 33,809 948 34,757 34,719 t- Net increase (decrease) in cash and cash equivalents (171,961) (15,874) (187,835) 76,198 Cash and cash equivalents at beginning of year 550,245 58,462 608,707 532,509 El Cash and cash equivalents at end of year $378,284 $42,588 $420,872 $608,707 Reconciliation of operating income (loss) to net cash provided by operating activities: r Operating income (loss) ($144,183) ($10,081) ($154,264) $80,502 J Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation 41,398 -- 41,398 44,640 0 Decrease (increase) in accounts receivable (270) (3,992) (4,262) 3,351 Decrease (increase) in other receivables -- (303) (303) 399 Decrease in prepaid expenses 619 -- 619 58 Increase (decrease) in warrants payable (1,898) (1,644) (3,542) 3,987 - Increase (decrease) in accounts payable (1,422) -- (1,422) 40 Increase (decrease) in due to developer -- (3,293) (3,293) 3,252 Increase (decrease) in unearned rental income 111 (264) (153) 28 Increase (decrease) in customer deposits payable 214 2,755 2,969 (2,007) Total adjustments 38,752 (6,741) 32,011 53,748 r Net cash provided by (used in) operating activities ($105,431) ($16,822) ($122,253) $134,250 L. - 104 - •� 0 r 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 for Federal and County moneys used to provide public housing assistance within the County. GEOTHERMAL 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 from 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 construction of improvements and are accounted for in the capital projects funds. IMPROVEMENT DISTRICT REVOLVING FUND - Used to accumulate any surplus balance of an -1 improvement district after final payment of all bonds. Such moneys are available to make up deficiencies in other improvement districts. 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. 0 0 C L . This page intentionally left blank. rz r- C - 105 - 0 0 . r COUNTY OF HAWAII -, Trust and Agency Funds - Combining Balance Sheet - June 30, 1998 - (With comparative totals for June 30, 1997) r Expendable Trust Funds .-1 Hawaii County State Improvement Improvement r Park Housing Geothermal Weight District District J Dedication Agency Asset Tax No 16 No 17 Assets Cash and investments: -- Cash and cash equivalents $ -- $5,039,265 $ -- $509,799 $2,195,152 $2,868,589 Investments 117,189 -- 934,313 -- -- -- --. Imprest fund -- 100 -- -- -- -- Total cash and investments 117,189 5,039,365 934,313 509,799 2,195,152 2,868,589 ` Receivables: r' Due from federal government -- 84,774 -- -- -- -- Due from other funds -- -- -- -- -- -- - Other -- 111,615 -- -- -- -- Total receivables -- 196,389 -- -- -- -- Restricted assets - cash & cash equiv. -- -- -- -- -- 1,400,000 Property and rights held under - deferred compensation plan -- -- -- -- -- -- Total assets $117,189 $5,235,754 $934,313 $509,799 $2,195,152 $4,268,589 I iabilities and Fquity - Liabilities: Warrants payable $ -- $ 160,276 $ -- $ -- $ -- $ -- Accounts payable -- 1,952 2,941 -- -- -- Due to other hinds -- 98,848 4,878 -- -- -- -' Accrued liabilities -- 9,568 -- 509,799 120 -- Customer advances and deposits -- -- -- -- -- -- r Assets held for the benefit of improvement districts -- -- -- -- 2,195,032 4,268,589 - Deferred compensation benefits payable -- -- -- -- -- -- fl Total liabilities -- 270,644 7,819 509,799 2,195,152 4,268,589 J Fund balances: Reserved for encumbrances -- 2,654,290 59 -- -- -- --' Unreserved: .--I Designated for: Imprest fund -- 100 -- -- -- -- Affordable housing -- 96,754 -- -- -- -- fl Future year expenditures -- 465,839 -- -- -- -- _J Total designated fund balance -- 562,693 -- -- -- -- Undesignated 117,189 1,748,127 926,435 -- -- -- r Total equity 117,189 4,965,110 926,494 -- -- -- Total liabilities and equity $117,189 $5,235,754 $934,313 $509,799 $2,195,152 $4,268,589 r - 106 - E Ia • 0 O r 5-- Agency Funds Improvement District Performance Improvement Bond and and Flexible Totals District Interest Refundable Payroll Spending Revolving Redemption Deposits Clearance Account 1998 1222 L $11,959 $81,095 $ -- $157,105 $10,862,964 $8,546,194 263,318 -- -- -- -- 1,314,820 1,199,325 -- -- -- -- -- 100 100 ~ 263,318 11,959 81,095 -- 157,105 12,177,884 9,745,619 -- -- -- -- -- 84,774 51,995 -- -- -- 3,277,263 -- 3,277,263 3,930,268 -- -- -- -- -- 111,615 81,106 -- -- -- 3,277,263 -- 3,473,652 4,063,369 -- -- -- -- -- 1,400,000 1,400,000 -- -- -- -- -- -- 26,576,092 $263,318 $11,959 $81,095 $3,277,263 $157,105 $17,051,536 $41,785,080 - $ $ __ $11,034 $1,352,775 $ $ 1,524,085 $ 1,485,649 -- -- -- 4,893 13,269 -- -- 270 1,017,446 -- 1,121,442 1,438,623 -- 11,959 -- 907,042 157,105 1,595,593 1,820,249 -- -- 69,791 -- -- 69,791 58,609 263,318 -- -- -- -- 6,726,939 5,100,071 -- -- -- -- r -- -- 26,576,092 `) 263,318 11,959 81,095 3,277,263 157,105 11,042,743 36,492,562 -- -- -- -- -- 2,654,349 2,282,938 __ __ __ -- 750 100 96,754 61,647 L. -- 465,839 -- -- -- -- -- -- 562,693 61,147 -- -- -- -- -- 2,947,833 -- -- -- -- -- 6,008,793 5,292,518 $263,318 $11,959 $81,095 $3,277,263 $157,105 $17,051,536 $41,785,080 0 - 107_ 0 O .� COUNTY OF HAWAII r Expendable Trust Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances For the Fiscal Year Ended June 30, 1998 (With comparative totals for the fiscal year ended June 30, 1997) ,-, Hawaii County Totals Park Housing Geothermal _, Dedication Agency Asset 1998 1997 Revenues: Intergovernmental $ -- $7,902,808 $ -- $7,902,808 $8,390,887 Interest 6,135 161,224 47,531 214,890 198,373 Miscellaneous: Donations -- 31,360 50,000 81,360 50,000 Resale of property -- 564,675 -- 564,675 225,666 Other -- 608 -- 608 1,955 - Total revenues 6,135 8,660,675 97,531 8,764,341 8,866,881 v ., Expenditures: - Current: General government -- -- 9,775 9,775 -- Health, education and welfare -- 7,816,144 -- 7,816,144 8,180,594 Pension and retirement contributions -- 219,790 -- 219,790 71,562 Debt service: Interest charges -- 46 -- 46 263 _ Principal retirement -- 2,311 -- 2,311 3,777 ,- Total expenditures -- 8,038,291 9,775 8,048,066 8,256,196 Excess of revenues over expenditures 6,135 622,384 87,756 716,275 610,685 Other financing uses - Operating transfers out - Capital Projects Fund -- -- -- -- (9,277) Excess of revenues and other sources over expenditures and other uses 6,135 622,384 87,756 716,275 601,408 Fund balances at beginning of year 111,054 4,342,726 838,738 5,292,518 4,691,110 r Fund balances at end of year $117,189 $4,965,110 $926,494 $6,008,793 $5,292,518 1- n t-- -108- - 0 0 r 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, 1998 Variance Favorable Budget Actual (Unfavorable) Revenues: Intergovernmental: Federal grants: Housing preservation grant $ 50,000 $ 50,000 $ -- HUD - Housing assistance 6,306,300 6,282,067 (24,233) HUD - Voucher program 2,416,000 1,425,216 (990,784) Total intergovernmental 8,772,300 7,757,283 (1,015,017) Interest earned 12,720 161,225. 148,505 Donations -- 31,360 31,360 Resale of property -- 564,675 564,675 Other -- 609 609 Total revenues 8,785,020 8,515,152 (269,868) Expenditures: Health, education & welfare 9,072,987 8,044,329 1,028,658 Pension and retirement contributions 242,000 219,791 22,209 Total expenditures 9,314,987 8,264,120 1,050,867 Excess (deficiency) of revenues over expenditures (529,967) 251,032 780,999 Fund balance at beginning of year 4,342,726 4,342,726 -- Fund balance at end of year - budgetary basis $3,812,759 4,593,758 $780,999 L Adjustments to conform with generally accepted principals: ^ Encumbrances at beginning of year (2,282,938) Encumbrances at end of year 2,654,290 J Fund balance at end of year - GAAP basis $4,965,110 LI L. L - 109- 0 0 • . COUNTY OF HAWAII Agency Funds -- Combining Statement of Changes in Assets and Liabilities For the Fiscal Year Ended June 30, 1998 ._ ^ Balance Balance July 1, June 30, --1 1997 Additions Deductions 1998 r State Weight Tax Fund Assets Cash and cash equivalents $ 494,429 $ 5,781,514 $ 5,766,144 $ 509,799 Liabilities _ Warrants payable $ -- $ 5,766,144 $ 5,766,144 $ -- _. Accrued liabilities - due to State of Hawaii 494,429 5,781,514 5,766,144 509,799 Total liabilities $ 494,429 $11,547,658 $11,532,288 $ 509,799 Improvement District No. 16 Assets Cash and cash equivalents $1,805,040 $390,262 $150 $2,195,152 Liabilities Warrants payable $ -- $ 150 $150 $ -- Accrued liabilities 95 25 -- 120 Assets held for the benefit of improvement districts 1,804,945 390,087 -- 2,195,032 Total liabilities $1,805,040 $390,262 $150 $2,195,152 Li Improvement District No. 17 L. Assets Cash and cash equivalents $1,645,593 $2,825,505 $1,602,509 $2,868,589 ._. Restricted assets - cash and cash equiv. 1,400,000 -- -- 1,400,000 Total assets $3,045,593 $2,825,505 $1,602,509 $4,268,589 1 Liabilities rs Assets held for the benefit of improvement districts $3,045,593 $2,825,505 $1,602,509 $4,268,589 (Continued) 1 -110- — s 0 O r COUNTY OF HAWAII - Agency Funds n Combining Statement of Changes in Assets and Liabilities - For the Fiscal Year Ended June 30, 1998 (Continued) Balance Balance July 1, June 30, 1997 Additions Deductions 1998 Improvement District Revolving Fund 7 Assets J Cash and cash equivalents $ -- $ 13,785 $ 13,785 $ -- -- Investments 249,533 13,785 -- 263,318 Total assets $249,533 $27,570 $13,785 $263,318 Liabilities - Assets held for the benefit of improvement districts $249,533 $13,785 $ -- $263,318 Improvement District Bond and r Interest Redemption Fund Assets Cash and cash equivalents $37,409 $1,598,938 $1,624,388 $11,959 - Liabilities Accrued liabilities - debt service on ,-- special assessment bonds $37,409 $1,598,938 $1,624,388 $11,959 n Performance and Refundable ,ta Deposits Fund Assets Cash and cash equivalents $63,023 $112,041 $93,969 $81,095 Liabilities r Warrants payable $ 3,959 $ 101,043 $93,968 11,034 Due to other funds 455 270 455 270 Customer advances and deposits 58,609 112,040 100,858 69,791 r Total liabilities $63,023 $213,353 $195,281 $81,095 - 111 - 0 0 •c COUNTY OF HAWAII Agency Funds Combining Statement of Changes in Assets and Liabilities -, For the Fiscal Year Ended June 30, 1998 — (Continued) ^ Balance Balance July 1, June 30, 1997 Additions Deductions 1998 Payroll Clearance Fund _ Assets v Cash and cash equivalents $ -- $ 77,323,795 $ 77,323,795 $ -- Due from other funds 3,930,268 73,580,425 74,233,430 3,277,263 Other assets 89 -- 89 -- Total assets $3,930,357 $150,904,220 $151,557,314 $3,277,263 Liabilities Warrants payable $1,437,976 $73,878,486 $73,963,687 $1,352,775 Due to other funds 1,351,614 1,019,154 1,353,322 1,017,446 Accrued liabilities - withheld payroll taxes 1,140,767 15,763,103 15,996,828 907,042 Total liabilities $3,930,357 $90,660,743 $91,313,837 $3,277,263 Flexible Spending Account '- Assets Cash and cash equivalents $137,981 $484,017 $464,893 $157,105 — Liabilities Accrued liabilities $137,981 $484,017 $464,893 $157,105 (Continued) 4- - 112 - — 0 0 _ COUNTY OF HAWAII Agency Funds -, Combining Statement of Changes in Assets and Liabilities — For the Fiscal Year Ended June 30, 1998 (Concluded) — Balance Balance July 1, June 30, — 1997 Additions Deductions 1998 Total - All Agency Funds Assets Cash and cash equivalents $ 4,183,475 $ 88,529,857 $ 86,889,633 $ 5,823,699 Investments 249,533 13,785 -- 263,318 Due from other funds 3,930,268 73,580,425 74,233,430 3,277,263 J Restricted assets - cash 1,400,000 -- -- 1,400,000 -- Other 89 89 - 1 Total assets $9,763,365 $162,124,067 $161,123,152 $10,764,280 J Liabilities Warrants payable $ 1,441,935 $ 79,745,823 $ 79,823,949 $ 1,363,809 Due to other funds 1,352,069 1,019,424 1,353,777 1,017,716 — Accrued liabilities 1,810,681 23,627,597 23,852,253 1,586,025 Customer advances and deposits 58,609 112,040 100,858 69,791 F Assets held for the benefit L of improvement districts 5,100,071 3,229,377 1,602,509 6,726,939 Total liabilities $9,763,365 $107,734,261 $106,733,346 $10,764,280 r C L C C L c L C L 7 L - 113 - 0 0 0 This page intentionally left blank. L. - 114 - - 0 0 e re GENERAL LONG -TERM DEBT ACCOUNT GROUP This account group accounts for the long -term debt of the Primary Government — except that related to the Enterprise Fund. L S r n 0 0 —, COUNTY OF HAWAII — General Long -Term Debt Account Group Schedule of General Long -Term Debt June 30, 1998 . With Comparative Amounts for June 30, 1997 1998 1997 0 Amount Available and to be Provided For the Payment of General Long -Term Debt 7 Amount available in Debt Service Funds $ 19,836,866 $ 18,429,799 J Amounts to be provided for general long -term debt: General obligation bonds 102,020,887 108,351,387 n State Revolving Fund loans 27,571,490 27,666,145 Accrued compensated absences 18,503,889 17,785,879 Estimated claims and judgments 8,337,661 7,000,000 D Capital lease obligations 549,928 602,063 Landfill closure and postclosure care costs 19,896,000 14,125,000 Total amounts to be provided for general long -term debt 176,879,855 175,530,474 '- Total $196,716,721 $193,960,273 i_ General Long -Term Debt Payable ,Cr General obligation bonds payable: 1977 Series A, public improvement bonds $ 309,000 $ 324,000 1978 Series, refunding bonds 20,075,000 21,695,000 1989 Series, refunding bonds 2,250,000 2,702,500 1993 Series, refunding and public improvement bonds 63,150,000 65,930,000 1996 Series A, public improvement bonds 30,000,000 30,000,000 r 1996 Series B, public improvement bonds 736,500 762,500 i_. 1997 Series A, public improvement bonds 3,878,000 4,000,000 Total general obligation bonds payable 120,398,500 125,414,000 Other general long -term debt: State Revolving Fund loans 29,030,743 29,033,331 Accrued compensated absences 18,503,889 17,785,879 1 Estimated claims and judgments 8,337,661 7,000,000 Capital lease obligations 549,928 602,063 Landfill closure and postclosure care costs 19,896,000 14,125,000 Total other general long -term debt 76,318,221 68,546,273 — Total $196,716,721 $193,960,273 r. C .--, - 115 - LJ 0 0 I J COUNTY OF HAWAII — General Long -Term Debt Account Group — Schedule of Debt Service Requirements to Maturity — for General Obligation Bonds u June 30, 1998 Total Bonds Bonds Fiscal Outstanding 11 Year at Ended Beginning Total — u 30 of Year Principal Interest Requirements 1999 $120,398,500 $6,312,000 $6,536,324 $12,848,324 r , 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 100,507,500 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 ill 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 n 2017 303,000 303,000 14,771 317,771 — $120,398,500 $57,212,799 $177,611,299 — 9 n E 1 - 116- — 0 0 U GENERAL FIXED ASSETS ACCOUNT GROUP a This account group accounts for all fixed assets of the Primary Government other than those recorded in the Enterprise Fund. TI r r 0 0 COUNTY OF HAWAII General Fixed Assets Account Group Schedule of General Fixed Assets by Source June 30, 1998 r With Comparative Amounts for June 30, 1997 1998 1997 General fixed assets: Land $ 16,157,621 $ 15,513,843 f Buildings and structures 209,240,082 117,964,129 _ Machinery and equipment 48,690,313 44,908,696 Construction in progress 20,241,951 103,551,818 Total $294,329,967 $281,938,486 Investment in general fixed assets by source: Capital Projects Funds: General obligation bonds $ 86,944,584 $ 63,686,550 _ Federal grants 66,091,688 81,764,530 State grants 31,623,975 31,575,470 General Fund revenues 30,526,021 28,085,032 General Fund - Federal revenue 5,589,072 5,179,894 General Fund - State revenue 1,621,972 1,379,893 Special Revenue Funds revenues 7,518,384 6,874,349 Contributions 3,117,333 2,376,829 Assets acquired prior to 1979 (sources undetermined) 61,296,938 61,015,939 Total $294,329,967 $281,938,486 9 0 r - 117- O O COUNTY OF HAWAII General Fixed Assets Account Group IL Schedule of Changes in General Fixed Assets by Function For the Fiscal Year Ended June 30, 1998 Balance Balance July 1, June 30, 1997 Additions Deductions 1998 General government $ 14,425,913 $ 969,255 $ 1,039,269 $ 14,355,899 Public safety 38,729,332 4,538,040 276,359 42,991,013 Highways and streets 9,159,390 1,146,225 97,946 10,207,669 J Sanitation 44,929,054 86,043,683 148,438 130,824,299 Health, education and welfare 575,026 4,541 12,944 566,623 Culture and recreation 56,791,519 5,072,194 181,361 61,682,352 Educational facilities 8,573,375 -- 19,804 8,553,571 Housing and community development 5,203,059 170,989 467,458 4,906,590 Construction in progress 103,551,818 4,933,766 88,243,633 20,241,951 Total $281,938,486 $102,878,693 $90,487,212 $294,329,967 u Q 0 1 J -118 - 0 0 -, COUNTY OF HAWAII — General Fixed Assets Account Group Schedule of General Fixed Assets by Function and Activity June 30, 1998 Buildings Machinery and and 0 Land Structures Equipment Total General government: General government buildings $ 448,075 $ 4,894,677 $ -- $ 5,342,752 Mayor's office -- -- 3,008,161 3,008,161 County clerk -- -- 271,427 271,427 Finance -- -- 1,446,540 1,446,540 Corporation Counsel -- -- 150,915 150,915 Prosecuting attorney — -- 864,886 864,886 Planning -- -- 361,387 361,387 Personnel services -- -- 124,190 124,190 Research and development 64,718 64,718 Public works -- 2,720,923 2,720,923 Q Total general government 448,075 4,894,677 9,013,147 14,355,899 Public safety: Public safety buildings 1,902,047 20,513,248 -- 22,415,295 Police -- — 7,300,947 7,300,947 Fire -- — 12,482,175 12,482,175 -- 122,327 122,327 -- Liquor -- 670,269 670,269 r Civil defense -- Total public safety 1,902,047 20,513,248 20,575,718 42,991,013 Highways and streets 1,821,218 1,944,578 6,441,873 10,207,669 Sanitation 600,608 123,142,344 7,081,347 130,824,299 Health, education and welfare 72,574 406,730 87,319 566,623 Culture and recreation 9,846,565 46,633,319 5,202,468 61,682,352 Educational facilities 27,429 8,526,142 -- 8,553,571 Housing and community development 1,439,105 3,179,044 288,441 4,906,590 Total general fixed assets allocated to functions and activities $16,157,621 $209,240,082 $48,690,313 274,088,016 -J Construction in progress 20,241,951 Total general fixed assets $294,329,967 0 0 r. - 119 - 0 0 • iT C J u C r This page intentionally left blank. ti r _ 120 - 0 0 J STATISTICAL SECTION (UNAUDITED) D C 0 J r r • r 0 0 Chart 1 a COUNTY OF HAWAII ,_._. General Governmental Revenues and Expenditures Comparison Last Ten Fiscal Years (In Thousands) -9 $1 60,000 r $140,000 — -- ,^ . _ El Revenues — El Expenditures 0 $120,000 Z C $100,000 — j— . — — , — ' — r $80,000 � — — — — n J � $60,000 ------ — — — U ^ j $40,000 -- 1 i t.-.) $20,000 g 1 1 a 5 6 e r- 19 0 6 1 19 99 8 1991 1941: 199 , 9 199 199 59 ^9 9 69 9 9 , 1 9 L. L.-. a _ 121_ Table 1 COUNTY OF HAWAII General Governmental Expenditures by Function* Last Ten Fiscal Years (Values in Thousands) Highways Culture Pension O Fiscal General Public and and and Capital Debt Year Gov't. Safety Streets Sanitation Recreation Retirement Outlay Other Service Total 1989 $11,727 $28,528 $5,802 $3,957 $6,331 $3,409 $2,453 $8,671 $8,701 $79,579 1990 12,892 32,987 5,904 4,662 6,979 2,726 1,441 9,165 8,457 85,213 1 1991 15,092 39,858 6,191 5,727 7,695 6,694 983 10,874 9,344 102,458 1992 16,275 43,676 5,873 6,509 8,521 6,908 3,035 14,361 9,912 115,070 NJ 1993 16,658 46,428 6,325 6,274 9,007 11,306 417 15,969 10,757 123,141 1 1994 17,455 48,105 5,975 9,435 10,118 14,024 1,691 16,032 12,149 134,984 1995 18,688 50,728 8,041 9,775 10,497 10,084 1,877 17,488 12,653 139,831 1996 18,241 50,381 6,237 10,451 11,085 13,326 1,749 16,702 12,054 140,226 1997 19,618 54,390 6,983 11,717 11,462 14,295 4,459 16,641 13,855 153,420 1998 20,512 55,673 6,621 12,082 11,800 14,044 5,603 17,813 14,228 158,376 * Includes General, Special Revenue and Debt Service Funds. O I l t ) I _1 1 1 C 1 1 E1 C t r C a 1 t F ) t _i i ) C ( " D ( I i i . . a . 0 0 — Chart 2 r COUNTY OF HAWAII ._._.) General Governmental Expenditures by Function --) Last Ten Fiscal Years (In Thousands) J $160,000 -.J E3 Other 15,1 O Debt service PI : e 0 El Capital outlay r t e e r e r d e F' 2 • Pensions and retirement e e # e, $140,000 [Highways and streets Culture and recreation r ---, PI EgSanitation ; 5 5 L- ill r ir e El Old I 2 1 0 $120,000 El P u b I 1 c s a f e ty El General government r e in — 0 A 5 II/1 11 i I 111 MM.° ik Al. ' r r; i ; mO P 1 4 ` ■0 .• "---" , . $100,000 r ,_ i...... I 1 "4 '' L `.. 5 A P - ; , . 1 I/ t '. a L I P" , . , Iii M 1 re-in ,. $80,000 r A : Ni.; 0 „ , fo n, 1 .4s tar, 1111111. . 4 ; : ri l l ri t 4 :01t, I 11 1 ' 11 _, L... girt te, giu ii: 0 = 0 ,,, II 1 1 ' • 1 F r i s t 4 14 .0 MI . Mg Mg . $60,000 . 0 9 a IIIIIIII 4t; tt • - w i tti- i I em a kil :ffi -.: '' r NISI itA5 16 .. '4 <<tr< - M Pk &e. ktk - $40,000 44.1 4.4 _:4“: .-.f. 4 i...ti . s eat, a ; \ • 1/2 - IR . a - «"<.:W SIM " ;£,A3C n bc, ". ;a4' WV' . , S ea " pa . tm 1 0 Mc : WI 1 $20,000 .: kaq WA et ip . pl ftt. Of 01" 4, i . lo-, 0 si s. 00 ,•*-.. usn ;A?: '• "" ■■■11.■ to: g . i::<4::<%. , :::: mos w " • • Is:E.c. : ., ; >a , no ." mil MOM 4 MEM MI. mom an I--" :S. ft$: . A : : : M • EMI : : : : : : : :::1 sea" an • MEM on 7 1 • 1 :::: a" na n MI* : MEM a meg an :::1 MM. ... 9 ... uuu en MO. MMMO4 OEM ::: ::: usu use smm ne an WIN M. m n::: nal a ::: “ ::: :::1 an" Mil : "al GM. en $0 oii :4,1'r !”."...:0,4'.:.s4 •• °' :kali ........ ...ftt3.7.!!! !"..a! 7".54SW MI -5 4 , 52::AFfrwo :p. cp <3\ 41- cP ,:cii "siD <y elp rA -9 1 cbt 9' _g(Y 1 4655- NO C Cr 'S , 'S N e ie N ia S ir \ ' ,-- - 123 - ..... 0 0 Table 2 L COUNTY OF HAWAII n General Governmental Revenues by Source* .- Last Ten Fiscal Years -.- (Values in Thousands) 1 - Licenses Charges Interest Fiscal Taxes and and Inter- for and -- Year Assessments Permits Governmental Services Penalties Other Total - J 1989 $51,677 $4,364 $14,977 $2,642 $3,361 $2,171 $79,192 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 1,543 105,635 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 L , 1994 97,893 5,107 28,581 4,983 3,068 1,676 141,308 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 r * Includes General, Special Revenue and Debt Service Funds. r J r r r - 124 - - 0 0 Chart 3 COUNTY OF HAWAII General Governmental Revenues by Source Last Ten Fiscal Years (In Thousands) r $160,000 �r c may- o S (1 9 II 4. 17 0ther " � �� d iii Owl ®Interest and penalties IIII MO 9 $140,000 El Charges for services f 1 H 17 Intergovernmental IIII S ® Licenses and permits ti tj t (-... 12 Taxes r 6 ::. I'll I .0 gi o IIII D r s ; o .✓ ,. 11111 e 11111 • y " $80,000 li ii II f r ti {11 11111 rl V $60,000 S3 5 r a ti S U $40.000 i r 2 2 r^ T N yr S r l.- h 4' r I $20,000 L H 1 9ags 1 9a99p 19991 1991 199,.93 1 99 � 9A 199k 199 1996 g'l 199 9 0 9 -125 0 0 0 Table 2a COUNTY OF HAWAII General Governmental Tax Revenues by Source* E Last Ten Fiscal Years L (Values in Thousands) r Real Fiscal Property Fuel Franchise Year Tax Tax Tax Total 1989 $45,394 $4,562 $1,721 $51,677 1990 51,652 5,101 1,900 58,653 1991 59,132 5,269 2,231 66,632 u 1992 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 5,613 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 * Includes General, Special Revenue and Debt Service Funds. C C 4 r - 126 - I I t J C 1 I 1 f J E1 l ) Cal C CID ( I t J CID CC t 1 l ) LJ L —J t 1 Table 3 COUNTY OF HAWAII Property Tax Levies and Collections Last Ten Fiscal Years Outstanding Total Delinquent O Current Current Per Cent Delinquent Total Collections as Outstanding Taxes as Fiscal Tax Tax of Levy Tax Tax Per Cent of Delinquent Per Cent of Year Levy Collections Collected Collections Collections Current Levy Taxes Current Levy 1989 $44,416,160 $42,945,964 97% $2,448,083 $45,394,047 102% $3,337,414 8% 1990 50,458,383 48,923,669 97% 2,728,241 51,651,910 102% 2,856,423 6% 1 1991 57,712,379 56,569,414 98% 2,562,617 59,132,031 102% 2,595,021 4% N, 1992 67,605,373 65,873,046 97% 2,048,950 67,921,996 100% 3,127,928 5% 1993 83,446,331 76,978,718 92% 2,021,617 79,000,335 95% 8,523,559 10% 1994 97,509,098 85,339,803 88% 4,197,692 89,537,495 92% 14,032,108 14% 1995 93,391,179 85,080,983 91% 6,119,051 91,200,034 98% 15,452,375 17% 1996 91,765,845 87,685,635 96% 4,826,516 92,512,151 101% 13,897,900 15% 1997 86,530,440 81,596,901 94% 4,892,755 86,489,656 100% 13,003,368 15% 1998 85,002,683 81,104,884 95% 6,315,429 87,420,313 103% 11,472,887 13% 0 0 0 . ,U 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 Estimated Year Value Actual Value Actual Value 1989 $4,859,334 $4,859,334 100% 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 10,611,589 100% 1997 10, 279,240 10,279,240 100% 1998 10,156,903 10,156,903 100% r Notes: There is no personal property tax in Hawaii. Assessment ratios are uniform statewide. 9 J L r r - 128- — C C 1 1 f 1 1 f ) I ) I 1 I J [ I L I ( 1 [ J i t L__J i ] 1 II I L__J I I Table 5 COUNTY OF HAWAII Real Property Assessed Values by Classification and Tax Rates Last Ten Fiscal Years (Values in Thousands) Value of Building Value of Land Value of Fiscal Class of Net Taxable Tax Rates Net Taxable Tax Rates Net Taxable O Year Property Building Per $1000 Land Per $1000 Real Property • 1989 Improved Residential $624,876 $ 8.50 $829,550 $ 8.50 $1,454,426 Unimproved Residential 23,679 8.50 173,439 10.00 197,118 Apartment 532,022 8.50 201,468 10.00 733,490 Hotel and Resort 333,571 8.50 131,858 10.00 465,429 Commercial 219,962 8.50 154,361 10.00 374,323 I Industrial 114,891 8.50 86,380 10.00 201,271 N Agricultural 372,663 8.50 969,635 10.00 1,342,298 ■o Conservation 5,738 8.50 85,241 10.00 90,979 Total $2,227,402 $2,631,932 $4,859,334 1990 Improved Residential $648,299 $ 8.50 $869,889 $ 8.50 $1,518,188 Unimproved Residential 24,798 8.50 214,679 10.00 239,477 Apartment 565,325 8.50 277,954 10.00 843,279 Hotel and Resort 486,483 8.50 246,000 10.00 732,483 O Commercial 227,633 8.50 164,882 10.00 392,515 Industrial 123,229 8.50 95,153 10.00 218,382 Agricultural 401,654 8.50 1,062,655 10.00 1,464,309 Conservation 5,944 8.50 101,351 10.00 107,295 Total $2,483,365 $3,032,563 $5,515,928 Continued next page. Table 5 Value of Building Value of Land Value of Fiscal Class of Net Taxable Tax Rates Net Taxable Tax Rates Net Taxable Year Property Building Per $1000 Land Per $1000 Real Property 1991 Improved Residential $764,940 $ 8.50 $1,017,045 $ 8.50 $1,781,985 Unimproved Residential 27,953 8.50 248,915 10.00 276,868 Apartment 610,080 8.50 332,900 10.00 942,980 Hotel and Resort 554,978 8.50 295,031 10.00 850,009 Commercial 251,864 8.50 183,870 10.00 435,734 Industrial 138,338 8.50 97,261 10.00 235,599 Agricultural 479,780 8.50 1,123,384 10.00 1,603,164 O Conservation 8,108 8.50 165,143 10.00 173,251 Total $2,836,041 $3,463,549 $6,299,590 1992 Improved Residential $730,920 $ 8.50 $1,141,530 $ 8.50 $1,872,450 Unimproved Residential 29,965 8.50 346,107 10.00 376,072 Apartment 761,267 8.50 516,141 10.00 1,277,408 Hotel and Resort 619,670 8.50 410,598 10.00 1,030,268 L ^' Commercial 275,409 8.50 202,658 10.00 478,067 0 1 Industrial 146,789 8.50 116,864 10.00 263,653 Agricultural 501,534 8.50 1,335,223 10.00 1,836,757 Conservation 17,147 8.50 171,301 10.00 188,448 Total $3,082,701 $4,240,422 $7,323,123 1993 Improved Residential $589,348 $ 8.50 $1,007,554 $ 8.50 $1,596,902 Unimproved Residential 27,559 8.50 338,853 10.00 366,412 Apartment 1,023,953 8.50 542,769 10.00 1,566,722 O Hotel and Resort 593,678 8.50 414,200 10.00 1,007,878 Commercial 307,441 8.50 261,045 10.00 568,486 I Industrial 162,266 8.50 159,593 10.00 321,859 Agricultural 533,085 8.50 1,718,781 10.00 2,251,866 Conservation 17,365 8.50 213,886 10.00 231,251 Homeowners 491,943 7.00 816,985 7.00 1,308,928 $3,746,638 $5,473,666 $9,220,304 Continued next page. • ( I ( 1 I I 1 1 I ) f") 1 1 f i _I C I [ I [ l f) C J t I t _l 1 1 r I f I 1 1 1 1 C 1 1 l 11 i 1 1 1 E L_J CE3 C I l 1 l _l { It ti if It 1 f I Table 5 Value of Building Value of Land Value of Fiscal Class of Net Taxable Tax Rates Net Taxable Tax Rates Net Taxable Year Property Building Per $1000 Land Per $1000 Real Property 1994 Improved Residential $666,307 $ 8.50 $1,160,396 $ 8.50 $1,826,703 Unimproved Residential 29,882 8.50 507,840 10.00 537,722 Apartment 1,094,068 8.50 634,190 10.00 1,728,258 Hotel and Resort 637,324 8.50 440,005 10.00 1,077,329 Commercial 337,758 8.50 308,756 10.00 646,514 Industrial 178,881 8.50 171,387 10.00 350,268 Agricultural 621,373 8.50 2,119,861 10.00 2,741,234 O Conservation 18,183 8.50 320,265 10.00 338,448 Homeowners 578,094 4.45 987,777 4.45 1,565,871 $4,161,870 $6,650,477 $10,812,347 1995 Improved Residential $677,974 $ 8.50 $1,152,161 $ 8.50 $1,830,135 Unimproved Residential 29,280 8.50 408,628 10.00 437,908 Apartment 985,734 8.50 557,441 10.00 1,543,175 Hotel and Resort 485,309 8.50 425,875 10.00 911,184 w Commercial 359,489 8.50 343,536 10.00 703,025 Industrial 190,612 8.50 207,643 10.00 398,255 Agricultural 667,109 8.50 2,108,530 10.00 2,775,639 Conservation 18,654 8.50 298,075 10.00 316,729 Homeowners 658,518 4.45 1,044,324 4.45 1,702,842 $4,072,679 $6,546,213 $10,618,892 1996 Improved Residential $685,883 $ 8.50 $1,117,161 $ 8.50 $1,803,044 O Unimproved Residential 30,342 8.50 379,090 10.00 409,432 Apartment 933,525 8.50 532,847 10.00 1,466,372 Hotel and Resort 440,835 8.50 435,758 10.00 876,593 Commercial 380,340 8.50 348,511 10.00 728,851 Industrial 193,408 8.50 207,870 10.00 401,278 Agricultural 697,709 8.50 2,096,588 10.00 2,794,297 Conservation 19,586 8.50 296,791 10.00 316,377 Homeowners 739,411 4.45 1,075,930 4.45 1,815,341 $4,121,039 $6,490,546 $10,611,585 Continued next page. Table 5 Value of Building Value of Land Value of Fiscal Class of Net Taxable Tax Rates Net Taxable Tax Rates Net Taxable Year Property Building Per $1000 Land Per $1000 Real Property 1997 Improved Residential $709,171 $ 8.50 $1,129,258 $ 8.50 $1,838,429 Unimproved Residential 29,316 8.50 301,798 10.00 331,114 Apartment 874,260 8 50 381,140 10.00 1,255,400 Hotel and Resort 457,982 8.50 441,930 10.00 899,912 Commercial 389,259 8.50 355,582 10.00 744,841 Industrial 182,717 8.50 204,645 10.00 387,362 Agricultural 706,888 8.50 1,865,329 10.00 2,572,217 O Conservation 20,120 8.50 273,356 10.00 293,476 Homeowners 832,724 4.45 1,123,765 4.45 1,956,489 $4,202,437 $6,076,803 $10,279,240 1998 Improved Residential $713,930 $ 8.50 $1,080,755 $ 8.50 $1,794,685 Unimproved Residential 28,096 8.50 292,207 10.00 320,303 w Apartment 837,311 8.50 381,468 10.00 1,218,779 ^' Hotel and Resort 496,133 8.50 464,217 10.00 960,350 Commercial 418,672 8 50 394,194 10.00 812,866 Industrial 184,016 8.50 202,722 10.00 386,738 Agricultural 717,233 8.50 1,622,308 10.00 2,339,541 Conservation 19,741 8.50 277,293 10.00 297,034 Homeowners 901,862 4.45 1,124,745 4.45 2,026,607 $4,316,994 $5,839,909 $10,156,903 NOTE: Values at 100 per cent of fair market value. O • l I t 1 l 1 1 1 P 1 f� - 1 r J O l _I 1 ! ( 1 I I r 1 C J I I 1 1 I I ( I f I \' ' 0 0 Chart 4 — COUNTY o HAWAII Assessed Value of Real Property Last Ten Years (In Thousands) \ eam_ ❑Land LI _ d 1 ng s — — — $10, , | $8,000,000-7 - — ( . la § Li u-- — c $6,000,000 _ ] | | • : ( r ( II ( ; ) _ ta L.— it / ) tt k_, \ 444 • : . m( ( � — — ) % ( ; -- S : 6 Si ! _ • ! —./� ▪ { • ( \ $2 �|( ! � % � /| } [ \ } k | ( } ▪ | ! ( \ | ( ) i ƒ/ . m i L :2 L r j a ± . 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 L — - 133 - 0 0 C Table 6 COUNTY OF HAWAII r Principal Taxpayers June 30, 1998 Percentage 1997 of Total Assessed Assessed —, Taxpayer Business Valuation Valuation U Kaupulehu Makai Venture Developer $201,846,500 1.6% Mauna Lani Resort Inc. Developer 175,664,100 1.4% Global Resort Partners Hotel 122,500,000 1.0% South Kohala Resort Corp Developer 113,631,100 0.9% — B. P. Bishop Estate Land Trust 102,318,400 0.8% Mauna Kea Beach Hotel Corp Hotel 97,097,000 0.8% M. L. Hotel Investors LP Hotel 65,543,100 0.5% C KM Kona Partners Developer 51,313,200 0.4% Kona Coast Resort Ltd. Time Share 45,528,800 0.3% Mauna Kea Agribusiness Co. Agriculture 40,414,600 0.3% $1,015,856,800 8.0% J Note: Gross valuation at January 1,1997: $12,307,837,142 -J J 134 - — O O Table 7 COUNTY OF HAWAII Computation of Legal Debt Margin June 30, 1998 L Total assessed value $10,156,902,565 Limitation as set by the Constitution of the State of Hawaii (A) 1,523,535,385 Amount of debt applicable to debt limit: (B) County general obligation bonds $133,183,850 State Revolving Fund loans 29,030,744 Other debt 1,159,837 163,374,431 Less: Bonds maturing in current fiscal year 7,200,500 SRF loan principal maturing in current fiscal year 1,455,742 Bonds reimbursable by DWS 12,785,350 r Pro rata share of 1978 Sinking Fund 8,291,517 29,733,109 L. n Total amount of debt applicable to debt limit 133,641,322 l J Legal debt margin $1,389,894,063 (A) The bonded debt limitation of the County of Hawaii is established at 15% 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 incurred under special r improvement statutes when the security for such indebtedness is the properties benefited or improved or the assessments thereon; or, under certain conditions, to certain types of general obligation bonds issued by the County or State of Hawaii. - 135- Table 8 COUNTY OF HAWAII Ratio of Net Bonded Debt to Assessed Value and Net Bonded Debt Per Capita Last Ten Fiscal Years Ratio of Net Net Net Gross Less Net Bonded Debt Bonded O Fiscal Assessed Bonded Cash Bonded to Assessed Debt per Year Population Value (B) Debt (C) Reserve Debt Value Capita 1989 122,300 $4,859,333,813 $59,348,639 -- $59,348,639 1% 485 1 1990 120,317 5,515,927,686 86,432,191 -- 86,432,191 2% 718 1991 126,400 6,299,589,959 83,293,587 83,293,587 1% 659 a, 1992 130,500 7,323,121,965 90,273,907 -- 90,273,907 1% 691 I 1993 133,100 9,220,301,348 112,581,138 -- 112,581,138 1% 846 1994 135,500 10,812,347,583 108,388,377 -- 108,388,377 1% 800 1995 137,500 10,618,892,539 106,255,790 -- 106,255,790 1% 773 1996 138,400 10,611,588,618 136,062,774 -- 136,062,774 1% 983 1997 141,500 10,279,240,111 141,144,771 -- 141,144,771 1% 997 1998 N/A 10,156,902,565 133,641,322 -- 133,641,322 1% N/A (A) Total resident population for 1990 based on 1990 Census; all other population figures 0 estimated by State Department of Planning and Economic Development as of July 1. (B) Assessment ratio at 100 per cent. (C) Excludes refunded bonds considered defeased and cash available to pay bonds maturing in current fiscal year. Includes notes payable by County Housing Agency. (See Table 7) I 11 1 1 1 t 1 ( 1 C _I t I f ) L _I r i ( I I 1 1 1 f J L I I I i II if 1 r , • 0 0 El Table 9 COUNTY OF HAWAII Ratio of Annual Debt Service Expenditures For General Obligation Bonded Debt L. To Total General Governmental Expenditures 9 Last Ten Fiscal Years Ratio of Debt Total Total Service to General Fiscal Debt General Governmental Year Principal Interest Service Expenditures Expenditures 1989 $2,967,000 $4,899,844 $7,866,844 $79,578,807 10% 1990 3,022,000 5,083,110 8,105,110 85,213,673 10% L. 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 8% 1995 5,335,443 6,245,235 11,580,678 139,831,035 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% E 1998 6,422,996 7,724,699 14,147,695 158,376,171 9% L I L 0 - 137- 0 0 Table 10 _. COUNTY OF HAWAII Demographic Statistics �) Last Ten Fiscal Years I Fiscal Per Capita School Unemployment Year Population Income Enrollment Rate (A) 1988 117,500 $13,462 25,179 4.9% 1989 122,300 14,989 25,923 3.9% 1990 120,317 * 16,728 26,745 4.0% . 1991 126,400 16,520 27,834 4.5% ^ 1992 130,500 16,846 28,587 8.1% J 1993 133,100 17,573 29,433 7.5% 1994 135,500 17,812 30,164 10.8% 1995 137,500 18,628 28,188 ** 10.2% 1996 138,400 19,056 30,497 ** 9.9% 1997 141,500 N/A 30,599 ** 10.2% C— (A) Calendar year. 1 J 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. — C J -138- I 1 E1 r ----- ) E 1 1 I O t 1= Cl I 1 ( 1 1 1 r 1 C C l C. i r 1 u t I Table 11 COUNTY OF HAWAII Property Value, Construction and Bank Deposits Last Ten Fiscal Years * Property Value (000) Commercial Construction Residential Construction Bank 0 Year Commercial Residential Nontaxable No. Permits Value (000) No. Units Value (000) Deposits (000) 1988 $1,717,882 $3,617,176 $637,243 433 $38,632 2,277 $143,339 $639,800 1989 1,877,693 3,780,235 634,133 479 69,999 3,703 269,676 735,500 1 1990 2,520,408 4,639,279 809,916 530 77,588 3,459 346,020 868,200 1- 1991 2,777,112 5,272,526 872,289 463 50,941 3,052 319,584 891,300 Lo 1992 3,700,926 7,209,492 973,599 516 78,103 2,088 302,073 N/A 1 1993 4,189,062 8,753,252 1,231,771 509 66,538 1,838 183,664 N/A 1994 3,913,902 8,847,719 1,189,879 421 66,018 1,068 115,829 N/A 1995 3,759,152 8,971,327 2,118,894 515 71,164 1,108 197,074 N/A 1996 3,504,229 8,857,420 2,082,409 370 68,585 828 103,203 N/A 1997 3,613,307 - 8,694,530 1,235,986 305 44,590 766 111,655 N/A 0 * Source: Real Property Tax Division. Figures represent gross valuation at 100% of fair market value. Other figures are from Department of Research and Development, County of Hawaii, and are for the calendar year. O 0 •J Table 12 COUNTY OF HAWAII Miscellaneous Statistical Data June 30, 1998 Date first charter adopted June 1968 Form of government Mayor /Council Area in square miles 4,038 Miles of streets (County only) 860 Number of street lights 8,025 Fire protection: Number of stations 18 Number of fire fighters and officers (exclusive of volunteer fire fighters) 285 Police protection: Number of stations 8 Number of substations 8 Number of police officers 386 -- County water service: Number of consumers 33,716 Average consumption in gallons per day 22,353,383 Miles of water lines 1,083 n Miles of sanitary sewers (County only) 60 Number of building permits issued: Building permits 2,878 Electrical permits 2,567 Plumbing permits 2,103 Sign permits 75 Recreation and culture: Number of parks 118 Number of gyms and recreation centers 38 - 140 -