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Home My WebLink AboutCOM 0959.000 2018-2020 • Aaron S.Y.Chung Bonnie S.Nims,CGAP Council Chair 70o.' ••14 y,��,, Legislative Auditor Hawai`i County Council y�Lr�/s., --_`— Business Address N' 45;i'`most P��=` 'gTof 120 Pauahi St. fi NP3� Suite 309 Count nztitutt tCHilo,Hawai`i 96720 OFFICE OF THE LEGISLATIVE AUDITOR 25 Aupuni Street Hilo,Hawai`i 96720 * (808)961-8386 * Fax(808)961-8905 website:http:-%hawaiicounty.gov e-mail:publiclao;c7ihawaiicountv.gov May. 13, 2020 TO: Aaron S. Y. Chung, Council Chair and Members of the Hawai`i County Council Li 4141 FROM: Bonni e S.Nims, CGAP Legislative Auditor = RE: Post-Audit Reports for Fiscal Year Ending June 30, 2019 This letter transmits for your review, deliberation, and acceptance,the Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2019, as prepared by the County of Hawai`i ' Assistance Program mor the Single Audit Federal Financial Department of Finance and the of �' .f Fiscal Year Ended June 30, 2019, as prepared by external auditor,N&K CPAs Inc. Pursuant to the 2018 Hawai`i County Charter, Section 10-13,Post-audit, which requires the county council to provide at least once every year for an independent audit of the accounts and other evidences of financial transactions of the county and of every county agency and executive agency and performed by a certified public accountant or firm of certified public accountants who have no personal interest, direct or indirect, in the fiscal affairs of the county or of any of its agencies or executive agencies. N&K CPAs Inc. has prepared a PowerPoint Presentation to summarize the results of the report. They will not be attending the Finance Committee meeting. In the meantime,please feel free to contact me at 961-8490 should you require further information. Enclosures • cc w/o enclosures: N&K CPAs Inc. Department of Finance BSN/mp Comm. No. Ci Ref.To: F�-•- Ref.Date 19 40.10 Hawai`i County is an Equal Opportunity Provider and Employer I M-12 M_.M i Harry Kim Mayor Wiffred Okabe Prepared by Deanna Sako Director of Finance CSL MIMIT&GAIAM" Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2019 Table of Contents Page INTRODUCTORY SECTION Letter of Transmittal I GFOA Certificate of Achievement 8 Organization Chart 9 List of Elected Officials 10 List of Principal Officials I I Report of Independent Auditors 13 Management's Discussion and Analysis 16 Basic Financial Statements: Government -wide Financial Statements: Statement of Net Position 28 Statement of Activities 30 Fund Financial Statements: Balance Sheet - Governmental Funds 32 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 33 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 34 Reconciliation of the Change in Fund Balances of Governmental Funds to the Statement of Activities 36 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) - General Fund 38 Statement of Net Position - Proprietary Funds 42 Statement of Revenues, Expenses, and Changes in Fund Net Position - Proprietary Funds 43 Statement of Cash Flows - Proprietary Funds 44 Statement of Fiduciary Net Position - Fiduciary Funds 45 Statement of Changes in Fiduciary Net Position - Fiduciary Funds 46 Notes to the Basic Financial Statements 47 Required Supplementary Information 106 FINANCIAL SECTION (Continued) 149 Table 2 - Changes in Net Position Egly,e Combining and Individual Norimajor Fund Statements and Schedules: 152 Combining Balance Sheet - Nonmajor Governmental Funds 116 Combining Statement of Revenues, Expenditures, and Changes in Fund 154 Balances - Nonmajor Governmental Funds, 120 Schedules of Revenues, Expenditures, and Changes in Fund Balances - 159 Budget and Actual (Budgetary Basis); 160 Highway Fund 123 Sewer Fund 124 Solid Waste Fund 125 Cemetery Fund 126 Parking Meter Fund 127 Vehicle Disposal Fund 128 Bikeway Fund 129 Workforce Investment Act Fund 130 Golf Course Fund 131 Geothermal Relocation and Community Benefits Fund 132 Beautification Fund 133 Hawaii County Housing Agency 134 Park Dedication Fund 135 Short-term Vacation Rental Enforcement Fund 136 General Excise Tax Fund 137 Combining, Statement of Agency Funds Net Position - Agency Funds, 138 Combining Statement of Changes in Assets and Liabilities -,agency Funds 140 Combining Statement of Private Purpose Trust Net Position - Private Purpose Trusts 146 Combining Statement of Changes in Net Position - Private Purpose Trusts 147 Table I - Net Position by Component 149 Table 2 - Changes in Net Position 150 Table 3 - Fund Balances,, Governmental Funds 152 Table 4 - Changes in Fund Balance, Govemmental Funds 153 Table 5 - Real Property Assessed, Values by Classification and 'Fax Rates 154 Table 6 - Principal Taxpayers 158 Table 7 - Property Tax Levies and Collections 159 Table 8 - Ratios of Outstanding Debt by Type 160 Table 9 - Ratios of General Bonded Debt Outstanding 161 Table 10 - Legal Debt Margin Information 162 Table I I - Dernographic and Economic Statistics 163 Table 12 - Principal Employers,, County of Hawaii 164 Table 13 - Full -Time Equivalent County Government Employees by Function 165 Table 14 - Operating Indicators by Function 166 Table 15 - Capital Asset Statistics by Functions 167 INTRODUCTORY SECTION Hw-ry Kim kfrsjv- December 30, 2019 County of Hawal'i Finance Department 2.5 AtApuni Street, Suite 2103 # Hilo, Hawail 96720 (8tm8) 961-8234 @ Fax (808) 961-8569 The Honorable Mayor and Members of the Council County of I Jawai'i 25 Aupuni Street Hilo, Hawaii 96720 SteveTl A. litint Depay torr-ector We transmit herewith the Comprehensive Annual Financial Report for the: County of Hawai'i, State of Hawai'i (the County), for the fiscal year July 1, 2018 to June 30, 2019. This report was prepared by the County's Department of Finance. The accuracy of the financial statements and the completeness and fairness of their presentation are the responsibility of the County government, We believe the enclosed data are complete and accurate in all material respects and are reported in a manner designed to present fairly the financial position and results of operations of the various funds of the County. All disclosures necessary to convey time maximum understanding of the County"s financial activities have been included. Management's discussion and analysis is also included to aid users of the financial statements. This report presents the financial position of the County of Hawai'i at June 30, 2019 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 management's discussion and analysis, the basic financial statements, related notes, the combining and individual fund budgetary financial statements, and the independent auditors' report. • The Statistical Section includes selected financial and demographic information, generally presented on a multi-year basis. This report includes all funds of the County of Hawai'i, 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. Hawai'i 'c one is an equal oppmtunify provider and eatployer ,r'he County provides a full range of municipal services. These include police and fire protection; emergency medical care; public prosecutor; culture and recreation; sanitation; social services; water; planning and zoning; construction and maintenance of highways, streets and infrastructure; real property assessment and tax collection; and general administrative services. However, the County does not provide such other traditional services as public education, hospitals and courts. These services are provided by the State government, The County consists of the island of Hawaii, , 4,028 square miles in size. It is twice as large as the combined area of all the other inhabited islands in the Hawaiian Archipelago, Since there is no other local or municipal government within the County, there are no overlapping taxes and no overlapping debt. The County has an elected mayor and a nine -member council. Economic Condition and Outlook The island of Hawai'i, commonly known as the Big, Island, is located 214 miles from I-Ionolulu, the state capital; 2,200 miles from the west coast of the continental United States; and 4,00O miles from Japan. The city of Hilo on the east side of the island serves, as the county seat as well as the transportation and financial center for the Big Island. Hilos infrastructure includes Hilo Harbor, a deep -water port, and Hilo International Airport, which is capable of handling fully - loaded wide-bodied aircraft. Kailua-Kona and South Khala, major tourist destination areas on the west side of the Big, Island, are served by flights from the United States mainland, Canada and now Japan through the Kona International Airport, Scheduled freight services are available between the islands by air and sea transport. Communities on the island are linked by a network of State and County maintained streets and highways, The Big Island is the most diversified of the neighbor island economics. As a result it is buffered to some extent when any one industry lags. Although the unemployment rate for the County for the current fiscal year is at approximately 3.7 percent, which is 0.7 percent higher than at the end of the prior fiscal year, this is only the first increase in unemployment since 2009, when the rate was 11 .5 percent. Although the past few years proved challenging to the island's economy, it appears that the County will continue on its steady but slow road to improved financial health. This favorable outlook is supported by positive trends in the following key, areas of the island's economy, `rourism has always been one of the major industries on the island. In fiscal year 2019, the County suffered from two natural disasters, Hurricane Lane and a volcanic eruption in the community of Puna, which took a toll on the island's visitor industry. Even with the halting of volcanic activity during the fiscal year, efforts continue within tile County and impacted community to deal with the devastation and devise plans for recovery. Despite sensational headlines that described the island as, being covered with molten lava, the island has remained open for business. In addition to the mild climate and natural beauty it shares with other areas in the state, the County features the Hawaii Volcanoes National Park, in addition to Four other national parks that focus on Hawaiian culture and history. - 7 � In January 2020, the elegant Mauna Lani, Auberge Resorts Collection will open its doors and welcome guests to visit their luxurious rooms, five restaurants and lounges, three pools and spa. The Fairmont Orchid serves as home to the iawe wood honey, which is one of the rarest types of honey in the world. The hotel maintains four beehives that serve as home to over 80,000 honeybees and are open to guests. Major Initiatives Puhlic Safety— With the volcanic eruption in the lower Puna region endangering, both lives and property, the Hawaii County Civil Defense Agency (Agency), along with many of the departments throughout the County, faced many challenges but worked tirelessly to keep the community safe. The Hawaii Police Department had a challenging year in FY 19, as the onset of the fiscal year saw the department addressing the devastation caused by the lava eruption in the populated Leilani Estates,, Poholki, Kapoho, and ao-i areas. The department also began its quest for reaccreditation through the Commission for Accreditation on Law Enforcement Agencies (Caleag) during this fiscal year, having undertaken a "mock"' reaccreditation to prepare for a site visit expected at the; onset of FY 20. I X. mill I i UnT Lrairling-wro'lugik 1CL151duvc ined it 61UJIL UIC lCfdl tj with critical funding. These legislative measures and grants, provided direct benefit to our community with 1) alternative fundeid apparatus, hazardous materials detection equipment, Rescue Water Craft Program expansion, and training; 2) improved emergency communications with the completion of the implementation of a new Computer Aided Dispatch systeni and smart phone dispatching program for the Volunteer Division; 3) expansion of our community outreach which included the implementation of an opioid awareness campaign, the launch of a mobile app cardiac arrest notification to the general public for CPR assistance, and; 4) implementation of the Paradise Park Advanced Life Support ambulance unit. Public Works -- Over the past fiscal year the Department of Public Works (DPW) completed the Kawailani/'Iwalani Intersection Improvement Project which involved grading, paving, installing drainage improvements, water mains, retaining walls, street lighting and traffic signal systems, This project had a total cost of approximately $20 million. I .......... -------- ------ W For the Future 1 W1 4 5]SF4IU1-7#,I1ICCrS III LIM IM111, TILIN UCIE 'TCA' Uh LIM VftgUL VI 1 411 UpplV 1' in June; 2019 authorized funding for the purchase of the cameras as well as for hiring personnel to oIversee the project. Additionally, and again working with the Fire Department and Department of Public Works, we continue to press forward for a combined Fire and Police Dispatch Center and hope it can be realized as a Capital Improvement Project during the: upcoming Fiscal Year. The department continues to seek funding to perform necessary repairs and maintenance to the Public Safety Complex, which is the main police facility for the department,, as well as a co -located site (partnering with the Fire Department) to serve as the mMin Puna District Station in the Kea'au area, �in lieu of the current Pahoa substation, which is overcrowded and not centrally located, The Fire Department continues to build towards being the leader of all hazard mitigation response and prevention. Utilizing innovative approaches, the department shall 1) institute a succession plan for critical chief officer positions; 2) implement a grant writing and oversight team to effectively continue its success in receiving grant awards; 3) continue the expansion of its Community Paramedicine Program, 4) continue the expansion of its Ocean Safety Rescue Water Craft program, and 5) increase the emergency communication and interface between public safety organizations with the relocation of its emergency dispatch center to a public safety col -located dispatch center site. NEW 1911VIIII I Ifff1wille I,_IV mill The Kalanianaole Avenue Reconstruction project (Kanoelehua Avenue to Kuhio Street) is, valued at $18.4 million. The project is in collaboration with the State Department of Transportation (DOT) and includes multi -use accessibility and the enhancement of roadway capacity, operations and safety for motorists, bicyclists and pedestrians. I I he work involves the widening of Kalaniana'oile Avenue to add for a concrete curb, gutter and sidewalk, a paved shoulder, bicycle lanes, utility relocation and the installation of a new waterline. The Mdmalahoa Highway Widening project is valued at $19.6 million and started in fiscal year 2017. The project will construct turning lanes at side intersections. The work will include grading, paving, retaining walls and installing pavement markings and signs. Completion of the project is currently slated for the end of fiscal year 20i2Oi., Culture and Recreation - The Department will continue to provide a wide array of services and programs for ages ranging from youth to elderly, while continuing to implement essential repairs and improvements to facilities, with the ADA transition plan and FEMA projects taking precedence. Parks and Recreation also anticipates the opening of the wawa. Street new fields which consists of both a multipurpose and baseball field, Other Financial Information Mff 1-41TMI 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. The County maintains budgetary controls to ensure that legal provisions of the annual budget are complied with and that those expenditures do not exceed budgeted amounts. Activities of the general fund and special revenue funds 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 ftinds, and the capital projects fund. Budgetary control for the debt service fund is achieved through general obligation bond indenture provisions, The basis ofaccounting used for the budgets of the general and special revenue funds diff�rs, from generally accepted accounting principles. 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 included in the various fund balance categories based on whether the resources are restricted, committed or assigned and do not constitute expenditures or liabilities because they will be honored during the following year. As demonstrated by the statements and schedules included in the financial section of this report, the County continues to meet its responsibility for sound financial management. Significant Accounting Policies The County has implemented Governmental Accounting Standards Board Statement No, 14, The Financial Reporting Entity (GASB Statement No. 14), Statement No. 39, Determining Whether Certain Organizations Are Component Units (GASB Statement. No. 3 9,) and Statement No. 61 The Financial Reporting Entity: Omnibus an amendment of GASBS'tatemtints No. 14 and 34 (GASB Statement No. 61). All organizations, activities or functions that meet the criteria in GASB Statement No, 14, No. 39 and No. 61 for inclusion in the reporting entity are included in the County's basic financial statements. For further discussion on other significant accounting policies, refer to the notes, to the basic financial statements. M Financial Highlights Total revenues increased by $39.7 million from the prior year, which was mostly due to property taxes increasing by approximately $111.7 million. Most notably, there were increases in the value of net taxable real property of $634.9 million in the homeowners class, which increased by 9.O percent from the prior year, and $466,1 million in the residential class. Second, there was an $18!.5 million increase: in OtherTaxes in General Revenues resulting from the newly assessed general excise tax surcharge. With an 8.0 percent ($39,7 million) increase in revenues that was offset by a 6,0 percent ($31.2 million) increase in expenses, the County experienced a decrease in net position of $,11.7 million, which represented a 42,0% ($8.5 million) decrease over the prior year's decrease in net position. These results are prior to the impact of the prior year's cumulative effect of an accounting change related to the reporting of the County's liability related to Other Postemployment Benefits (OPEB)I. The County's net investment in capital assets, increased by $27.0 million from the prior year, which represented a 3.2 percent increase. New and continued construction projects in the areas of highways and streets and sanitation accounted for the majority of the increase. 1, MT 14 1 =T1Tr1T71711=0 I Independent Audit The County Charter requires an annual audit by independent certified public accountants,. N&K CPAs Inc. was selected in accordance with the: County Charter and the procurement provisions of the Hawaii Revised Statutes (HRS) and Hawaii Administrative Rules (HAR) to perform the audit, Employee Union Contracts County employees are members of eight different bargaining units, of which five have contracts that expire on June 30, 2021 and negotiations have either just concluded or are still ongoing for the remaining three that have expired. Certificate ofAchieventent The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the County of Hawaii for its Comprehensive Annual Financial Report for the fiscal year ended June 311, 201 . This was the thirty first consecutive year that the government has received this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report, This report must satisfy both generally accepted accounting principles and applicable legal requirements. A ' Certificate of Achievement is valid for a period of one year only. We be:lieve our curren I Comprehensive Annual Financial Report continues to meet the Certificate of Achievement Program's requirements, and we are submitting it to the GFOA to determine its eligibility t another certificate. The pof this report was made possible by the efficient and dedicated services of the entire staff of the Department of Finance and fiscal personnel in other departments. I am grateful for their help in preparing this report. I also thank the Mayor and the members of the County Council for their interest and support in assuring the continuing sound financial condition of the County of Hawaii, MW = � IRWARMILRIWOMMUNRI Lwl� WE 6 Certificate of Achievement for Excellencs rt Finzicn M� Presented to County of Hawaii • Financial Report for the: Fiscal Year Ended Executive Sire tor/ Coiunty of Hawaii, County Electorate ounty Council M or Prosecuting Attorney erurrtF 1 Legislative Office of Management: ierk AUditor Mcinciging Director* Departments under Agencies tinder Departments tinder direct stIpervision of the direct stipervision of the commissions and Managing Director: Managing Director: administrative supervision of the Mayor: Corporation Counsel Finance Planning Environmental M.-mogement Resecirch & Develolwnew, Public Work Parks & Recreation Information Technology Civil Defense Of ,fice of Aging heves Transit Qf ,fice of Housing & Convnuniry Development Human Resources Police Liquor Control Fire 'crier Suj)ply (Sem i-alliononloles) Imiiia Harry Kim Mitchell Ra& County Council (Term Aaron SY Chung Karen Eoff ffiffi,i , 1 . I o . , June 30, 2019 (Term: 2016-2020) Nummi Maile "Medeiros" David Ashley L. Kierkiewi Susan L. K. L i Valerie 1'. Poindexter Herbert M. "Tim" Richards, III Rebecca Villegas, Mayor Prosecuting Attorney Chair Vice Chair Member Member Member Member Member Member Member Principal Officials June 30, 2019 County Clerk Jon Henricks Legislative Auditor Bonnie Ninis Managing Director Wilfred O�kabe Deputy Managing Director Barbara Koss,ow Corporation Counsel Joseph Kamelamela Director of Finance Deanna Salto Planning Director Michael Yee Director of Personnel William rilhante Jr. Director of Research and Development Diane Ley Chief of Police Paul Ferreira Fire Chief Darren Rosario Director of Public Works David Yarnamoto Director of Environmental Management William Kucharski Parks, and Recreation Director Roxcic Waltjen Manager -Chief Engineer, Department of Water Supply Keith Okamoto Civil Defense Administrator Talmadge Ma ,no Director of Liquor Control Gerald Takase Mass Transit Administrator Brenda Carreira Executive on Aging Christian Alameda Administrator, Office of Housing and Community Development Neil Gyotoku Director of Information Technology Julie Ung, This page intentionally left blank. Em FINANCIAL SECTION N&K CPAs, Inc. ACCOUNTANTS I CONSULTANTS INDEPENDENT AUDITOR'S REPORT To the Chair and Members of the County Council County of Hawaii Report on the Financial Statements AMERICAN SAVINGS BANK TOWER 1001 BISHOP STREET, SUITE 1700 HONOLULU, HAWAII 96813-3696 T (808) 524-2255 F (808) 523-2090 We have audited the accompanying financial statements of the governmental activities, the business -type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the County of Hawaii, State of Hawaii (County), as of and for the fiscal year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the County's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall financial statement presentation of the financial statements. N&K CPAs, Inc. ACCOUNTANTS I CONSULTANTS We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the County of Hawaii, State of Hawaii, as of June 30, 2019, and the respective changes in financial position and, where applicable, cash flows thereof and the budgetary comparison for the general fund for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis (pages 16 through 26), schedule of changes in the net OPEB liability and related ratios (pages 106 through 107), schedule of contributions (OPEB) (pages 108 through 110), schedule of the County's and Department's proportionate share of the net pension liability (ERS) (page 111), schedule of the employer pension contributions (ERS) (pages 112 through 113), and schedule of changes in total pension liability (page 114), be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County's basic financial statements. The introductory section, combining and individual nonmajor fund financial statements and budgetary comparison schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and budgetary comparison schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such N&K CPAs, Inc. ACCOUNTANTS I CONSULTANTS information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and budgetary comparison schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 30, 2019, on our consideration of the County's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the County's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the County's internal control over financial reporting and compliance. Honolulu, Hawaii December 30, 2019 10 MM" 0110 to'Kif SO 01-LIKU3311MI "VOL This section of the County of Hawai'i's (the County) Comprehensive Annual Financial Report presents a narrative overview and analysis of the financial activities of the County for the fiscal year ended June 30, 20 19. We encourage readers to consider the information presented liere in conjunction with additional information that we have furnished in our letter of transmittal. is IM91" OR 111" I -IM M UP The assets of the COUrIty exceeded its liabilities at the: end of the fiscal year by $130.0 million (net position). This amount includes a negative balance of $820.9 million in unrestricted net position, a decrease of $30.5 million from the prior year, which is explained in the sections below. This al-nonnts also includes $213.0 million and $17.0 million in deferred oLitflows and inflows of resources, respectively. As of the close of the current fiscal year, the COUIlty'S governmental funds reported combined ending fund balances of $224.4 million, an increase of $11.2 million from the prior year.. Approximately 40 percent of this total amount, $89.1 million, is available for spending at the County's discretion (unrestricted fund balance). 0 At the end of the current fiscal year, Unrestricted fund balance for the general Rind was $42.4 million, or 13 percent of total general fund expenditures,. WO RIA30ANy MUTIKIIII This discussion and analysis is intended to serve as an introduction to the County's basic financial statements. The County's basic f inancial statements comprise three components: (1) Government -wide financial statements, (2) Fund financial statements, and (3Notes to the basic financial statements. This report also contains both required and other supplementary information in addition to the basic financial statements themselves, MYTOMMI M.1311170"IMIMMUMMIM. Tile government -wide financial statements are designed to provide readers with a broad overview of the County's finances, in a manner similar to a private -sector business. Tile statement of net position presents information on all of the County's assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether or not the financial position of the COLInty is inlDrovin2 or deterioratiniz. The statement of activities presents information showing how the County's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless, of tile tiniing, of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods, such as revenues pertaining, to uncollected taxes and expenses pertaining to earned but Linused, vacation and sick leave. Both of the governinent-wide financial statements distinguish functions of the County that are principally supported by taxes and intergovernmental revenues (governmental activities) front other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the COL111ty include public safety, highways and streets, health, education and welfare, culture and recreation, sanitation and general government. The business -type activities of the County include rental housing for senior citizens and families. .......... . ..n . mul The government -wide financial statements include not only the County itself (known as the primary government), but also the Department of Water Supply, a legally separate entity that the County is financially accountable for. Financial information for this component unit is reported separately from the financial information presented for the primary government itself. Fund Financial Statements 'Tile fund financial statements are designed to report information about groupings of related accounts which are used to maintain control over resources that have been segregated for specific activities or objectives. The County, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal reqUireillents. All of the funds of the County can be divided into the following three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds. Governmental funds are used to account for essentially tile same functions reported as governmental activities in the government -wide financial staternents i.e., most of the: County's basic services are reported in governmental funds. These statements, however, focus on (1) how cash and, other financial assets can readily be converted to available resources and (2) the: balances left at year-end that are available for spending, Such information may be useful in determining what financial resources are available in the near future to finance tile COLITIty'S programs. Because the fOCLIS of governmental funds is narrower than that of the governirvent-wide financial statements, it is useful to compare the information presented for governmental fluids, with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long-term impact ofthe governrnent's, near-term financing decisions. Both the governmental funds balance sheet and the governmental funds statement of revellUes, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities, The County maintains, several individual goverm-nental funds organized according to their type (general, special revenue, debt set -vice, and capital projects). Information is Presented separately in the govern inental funds balance sheet and in the governmental funds statement of revenues, expenditures, and changes in fund balances for the general fund, and capital projects fund, which are considered to, be major funds,, Data from the remaining, governmental funds are combined into a single, aggregated presentation. Individual fund data for each of the non -major governmental funds is provided in the form of combining statements elsewhere in this report. The County adopts an annual appropriated budget for its general fund and special revenue fun& A budgetary comparison statement has been provided for these funds to demonstrate compliance with this budget. The budgetary comparison statement for the general fund is, located in the basic financial statements, whereas the budgetary comparison schedules for the nortmajor special revenue funds are: presented elsewhere in this report. Proprietary funds. Proprietary funds are generally used to account for services for which the County charges outside customers. Proprietary funds provide the same type of information as shown in the government -wide financial statements, only in more detail. The County maintains only one type of'proprietary funds, enterprise funds, Enterprise funds are used to report the same functions presented as business -type activities, in the, government - wide financial statements, The County uses enterprise fluids to account for tile operations of the Kulaimano Elderly Housing Project and the Ouli Ekahi Affordable Housing Protect, Fiduciary funds. Fiduciary funds are used to, account for resources field for tile: benefit of parties outside tile COLuity. Tile private -purpose trusts and tile agency funds are reported under the fiduciary funds. Since the resources of these funds, are: not available to support the County's own pro, rains, they are not reflected in the government -wide financial statements, The accounting used for fiduciary funds is much like that used for proprietary funds. Notes to the Basic Financial Statements The notes to the basic financial staternents, provide additional information that is essential to a full Understanding of tile data provided in the governirient-wide and fund financial staternents. Other Supplementan Information In addition to the basic financial statennennts and accoinpanying notes, this report also presents certain required supplementary information, which is presented irru-nediately following the notes to the basic Financial staternents. The combining staternents referred to earlier in connection with nonrnajor governmental ftinds and budgetary comparison schedules for the nonmajor special revenue funds are presented immediately following the required SUpplenientary inforniation. Condensed Statement of Net Position June, 30, 2019 and 2018 Primary Government Deferred Inflows Of Resources: 16,970,9135 17,863,765 16,970,935 17,863,765 Total Liabilities and Deferred Inflows Of Resources 1,764,374,804 1,697,689,,675 780J92 — 871,262 —1,765,155,596 1,698,,560,937 Net position: Governmental Activities Total Net investinent in 2 ZQA 2919 ala 202 2M Assets; 867,654,341 840,694,971 Restricted 83,230,067 91,458,455 — -- 83,230,067 Current and other assets S 351,300,809 $ 298,905,875 $ 1,3 00, 2 t 6 $ 1,182,749, S 352,601,0�25 S 300,088,624 Capital assets, net 1328,138,639313,094,(9j M9,989,475 1,365,554 1,402,543 1,329,504,193 t,314A9e.633 Tota) assets 1,679,439,448 l,611,9d 9 965 2,665,770 2,585,292 1.682,1 C75„218 1,614,585,257 Deferred Outflows Of Resource5: 213.039,853* 225,708,72611 — 11.3,039,853 225,708,726 TOW Assets anti Deferred Outflows or Resources 1,892,479,301 1,837691 2,665,770 2,585,292 1,895,14 5,07 1 _j,8 40,:L93, 9L3 Liabihfies: Long-term habitifics wastanding 1,677,521,661* 1,621,452,6404 697,777 8017,005 1,678,219,438 1,622,259,645 Other liabilities 69,882,208 5 8,3 73,2 70 83,015 64,257 69,965,223 58,437,527 Total liabifities 1,747,403,869 1,679,825,910 _____L80,792 871,262 1,748,18'4,661 t,680,097,172 Deferred Inflows Of Resources: 16,970,9135 17,863,765 16,970,935 17,863,765 Total Liabilities and Deferred Inflows Of Resources 1,764,374,804 1,697,689,,675 780J92 — 871,262 —1,765,155,596 1,698,,560,937 Net position: Net investinent in Capital assets 866,986,564 840,099,433 66,7,777 595,538 867,654,341 840,694,971 Restricted 83,230,067 91,458,455 — -- 83,230,067 91,458,455 Unrestricted (822,112,134)# (791,538,,872)* 1,217,201 1,118,492 (820,894,933) (790,420,380) Tottil net position $ 128,104,497 $ 140,019,016 S 1,88�4,978 51,X4,030 M9,989,475 $141,733,046 *See explanation oil page 20. MEN IMMEMEMMU= As noted earlier, net position may serve over thrie: as a useful indicator of a governinent's, financial position. In the case of tile County, assets exceeded liabilities by $130.0 million at the close of the most recent fiscal year. By far tile largest portion of the County's net position reflects its investment in capital assets (e.g., land, buildings, infrastructure, and, equipment) less any related debt used to acquire those assets, that is still outstanding. The County uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the County's investment in its capital assets is reported net of related debt, it Should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the County's net position represents resources that are SUbJect to external restrictions on how they may be used. At the end of tile current fiscal year, the County i,s able to report positive balances in two of its three categories of net position, both for the government as a whole, as well as for its separate governmental activities. All three categories of net position are positive for its business -type activities. The County's net position decreased by $11 .7 million frorn the prior year, which was an increase of $282.5 million (96%) from the decrease that was experienced last Fiscal year. The main reasons for the large increase in the current year' decrease over last year's decrease, was due to a prior period adjustment of $274.0 million in the prior year, which was the result of the County's implementation of GASB Statement 75, Accounting and Financial Reporthigfor Postemployinem Benefils Other Thcm Pensions. Under this new accounting standard the County's financials at tile government -wide level now reflect their riet liability, expense, deferred inflows, and outflows relating to Other Posternployment benefits. The County's, net capital assets increased by $15.0, million (I percent) due to the large anlount of capital improvement projects done by the County during the current fiscal year and infrastructure related assets that were contributed. See further discussion of the increase in capital assets on page 23. The County's long-term liabilities outstanding increased by $5 ,1 mi Ilion (3 percent) due primarily to the issuance of $7A million State Revolving Fund (SRF) loans and $30.0 million in bond anticipation notes, which were offset by $28A in retirements of bonds and SRF loans,; a $133 million increase in tile liability related to claims and judgments against the County due to the settlement of one case in particular; a $9.4 million increase in the County's liability relating to the pre -funding of its posternploynient benefits other than pensions; and a $25.8 million increase in the County's net pension liability. See further diSCLISSiOn Of tile increase in long-term debt outstanding on page 25. - 19- Analysis of Changes in Net Position Governmental activities,. Governmental activities decreased the County's net position by $11.9 million, which represented all of tile total decrease in net position of the County. The primary reasons for the $393 million (8 percent) increase in total revenues was due to property taxes increasing, by approximately $11 .7 million, which was dLIC to increases in the value of net taxable real property, of which the most notable was a $634.9 million increase in the honleowners class that represented all 9 percent increase frorn the prior year, and then followed by a 466,1 million increase in the residential class (5 percent increase). Other taxes, in General Revenues increased by approximately $18.5 million, which related tile newly assessed general excise tax surcharge that was restricted to uses relating to the highways and streets, protects. Total expenses increased by $3 1,2 rnillion, which represented a 6 percent change frorn the prior year. There were the typical increases in salaries and wages and related employment benefit costs across all functions in the current fiscal year. Condensed Statements of Activities For the Fiscal Years Ended June 30, 2019 and, 2018 Primary Gover-nnient Gover-m-nental Activities Business -type Activities Total 9 N 10 18 Revenues, Progrm-n revenues - Charges lbr services $ 55,359,67'4 $ 50,576,723 510,352 503,597 55,870,026 $ 51,080,320 Operating grants and contributions 64,285,842 57,600,066 261,848 224,921 64,547,690 57,600,000 Capital grants and contributions 28,375,566 31,530,7191 28,375,566 31,530,7't9 General rcvcnucs; Property taxes 31.5,969,118 304,294,883 - 31:5„9019„.118 304,294,883 Other taxes 47,796,847 29,285,662 47,796,847 29,285,662 Grants and contributions, unrestricWd 19,,748,211 19,678,289 19,748,211 19,678,289 Investment earnings 3,420,693 1,84 l,356 8,2314 5,561 3,428,927 1,846,917 Other l,848,245 2,.339,24'8 1,849,245 2,339,248 Total revenues 536,804,196 497,146,9146 780,435 734,079 53 7,584,630 497,88 1,02 5 Expenses�a General government 88,660,088 75,740,262 - - 88,660,088 75,740,262 Public safety 248,111,465 245,139,168 248,111,465 245„139„468 Highways and streets 62,066,700 54,728,332 62,066,700, 54,728,332 fleahlr, education and welfare 37,919,675 35,597,718 609,48'6 566,864 38,529J61 36,164,582 Culture and recreation 35,908,061 35,834,512 - 35,908,061 35,834,512 sanitation 62,775,074 55,025,011 62,775,074 55,0325;1111 Interest on long-term debt 13,277,652 15,4931,678 13,277,652 15,493,678 Total expenses 548,718,715 517,55801 609,4 87 5616,864 549„328,201 518,125,545 Increase (Decrease) in net position (1.1,914,'5'19) --(20,411,?3.5) 1701,9 4-8 —16-7,215 4t„743,571,) (20,244,520) Net position at beginning ol'year 1401,0 19,016 434,457,254 1,714,030 1,5<46,815 14 1,733,,046 436,004,069 Prior period adjustment (274,026,503) - - (274,026,503) Net position an beginning or year, as restated 140,019,0l6 160,430„751' 1,714,030 1,546,8 15 141,733,046 16 l,977,566 Net position at end of year $ 128,104,497 $ 140,019,016 $ 1,884,978 $ 1,71 1„01301 $ 129,989,475 $ 141,733,0d6 *Due to the implementation of GASB 75, a prior period adjustment to governmental activities of $274,026,503 is reflected in June 2018. The restated beginning balance for fiscal year 20 18 is $160,430,75 1 for governmental activities. See Note I for details. Analysis of Changes in Net Position Governmental activities,. Governmental activities decreased the County's net position by $11.9 million, which represented all of tile total decrease in net position of the County. The primary reasons for the $393 million (8 percent) increase in total revenues was due to property taxes increasing, by approximately $11 .7 million, which was dLIC to increases in the value of net taxable real property, of which the most notable was a $634.9 million increase in the honleowners class that represented all 9 percent increase frorn the prior year, and then followed by a 466,1 million increase in the residential class (5 percent increase). Other taxes, in General Revenues increased by approximately $18.5 million, which related tile newly assessed general excise tax surcharge that was restricted to uses relating to the highways and streets, protects. Total expenses increased by $3 1,2 rnillion, which represented a 6 percent change frorn the prior year. There were the typical increases in salaries and wages and related employment benefit costs across all functions in the current fiscal year. The charts below illustrate the County's governmental expenses and revenues by function, and its revenues by source. As s1lown, public safety is t1le largest function in expense (45 percent), followed by general goverilinient (16 percent) and sanitation (I I percent). General revenues, such as property and other taxes are not shown by program, but are effectively Used to support program activities countywide. For governmental activities overall, without regard to programs, property taxes are the largest single source of funds (59 percent), followed by operating grants and contributions ( 12 percent) and charges for services (10 percent). Expenses and Program Revenues — Governmental Activities Year Ended June 301, 2019 $300,000,000 $2.50,00D,000 $200,000,000 $150,000,000 $100,000,000 $50,0MQ00 $0 Expenses 4 Pfulgrom �rrnnwes Revenue by Source — Governmental Activities Year Ended June 30, 2019 4westment earnings, Other, $1,848,245 Charges for services, $3,420,693 $55,359,674 .......... Grants and: contflbu0ons --------- not restricted to specific programs, $19,748,211 Other taxes, $47,796,847 operating grants and contributions, $64,285,842 C 41atgtants&A4 aP3 $28,375,566 Property taxes, $315,969,118, oz, "a %. 10' 4§ Revenue by Source — Governmental Activities Year Ended June 30, 2019 4westment earnings, Other, $1,848,245 Charges for services, $3,420,693 $55,359,674 .......... Grants and: contflbu0ons --------- not restricted to specific programs, $19,748,211 Other taxes, $47,796,847 operating grants and contributions, $64,285,842 C 41atgtants&A4 aP3 $28,375,566 Property taxes, $315,969,118, Business -type activities. Business -type activities increased the County's net position by $170,948 versus all increase of $16,7,215 in the prior year. Expenses for health, education and welfare account for all of the $609,486 of expenses which represents a 7 percent increase from the prior year, Approximately $24,,000 or 4% of the current year expenditures were incurred as a result of additional cleaning and maintenance for one of the Units. Charges for services were $510,352 and investment earnings were $8,,23,4, which were comparable to the prior year, Operating grants and contributions increased by $36,927 (16 percent) to $261,8,48 as a result of the County increasing the inininium, rent which thereby increased the rent subsidies from the US Department of blousing and Urban Development. FINANCIAL ANALYSIS OF THE COUNTY'S FUNDS As noted earlier, the County uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. Governnientalftinds., The focus of the County's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the County's financing requirements. In particular, unrestricted fund balance may serve as a useful measure of a government's net resources available for spending, at the end of the fiscal year. As of the end of tile current fiscal year, the County's governmental funds, reported combined ending fund balances of $224.4 million, an increase of 11.3 million (5 percent) in comparison with prior year. Approximately 40 percent of this total amount ($89.1 million) constitutes unrestricted fund balance. The unrestricted portion of the fund balance is comprised of (1) $600 million in committed fund balance, (2) $25.7 million in assigned fund balance, and (3) $11 million, in unassigned fund balance. The remainder of the fund balance is divided between $'7'.3 million in nonspendable Fund balance for inventory and $128.0 million in restricted fund balance. Approximately 62 percent of the total restricted fund balance is, due to restrictions relating to highways, streets and abandoned vehicles 046.6 million) and debt service ($33.2 million). $6.0 million of the fund balance restricted for highways, streets and abandoned vehicles was due to the newly created General Excise Tax fund, which accounts for the general excise tax surcharge that became effective in fiscal year 2019. The general fund is tile chief operating fund of the County. At the end of the current fiscal year, unrestricted fund balance of the general fund was $42.4 million, while total fund balance increased to $76,2 million, As a measure of the general fund's liquidity, it may be useful to compare both unrestricted fund balance and total fund balance to total fund expenditures, Unrestricted fund balance represents 13 percent of total general fund expenditures, while total fund balance represents 24 percent of that same arnount. The fund balance of the County's general fund increased by $15.1 million during the current fiscal year as compared to an increase of $13.3 million in tile prior year. Key factors in this increase ($1.8 million), over last year's increase are as follows: • A positive increase oft1 .9 million (4 percent) in real property tax revenues and $2.9 million (5 percent) in intergovernmental revenues. As explained previously, the increase in real property tax revenues is due to a slight increase (5%) in the Value of net taxable real property as evidenced'! in the accompanying statistical tables. "rile positive inipact of the increase in revenues was offset by increases of $1 ,8 iniflion (5 percent) in expenditures. $5.6 million of the total increase in expenditures is due to increases in salaries and wages from the prior year and $ 41.5 million in: associated employee and retiree: benefits. The County also faced the continuation of tile natural disaster relating to the lava eruption, and incurred expenditures for emergency protective measures and recovery related to a hurricane. Tile fund balance of the County's capital projects ftind decreased by $18,1 million (25 percent) du ri jig the current fiscal year. The: decrease is priniari ty dace to the recognition of $3 0.0 in i I I i oil i i�i bond anticipation notes (BANs) that were issued in the current year to fund, expenditures incurred during tile: fiscal year as a current liability instead of another financing source because tile legal steps regarding the issuance of the bonds to pay off these notes have not been completed at the time the audited financial statements are being issued:. "rhis, was partially offset by the issuance of $7.4 million in SRF loans and $4.1 million in transfers frorn the newly created General Excise Tax Fund. The debt service funds consist of tile Bond Redemption Fund and the Interest Fund, These funds have combined total fund balances of $33.2 million, all of which is restricted for the payment of debt service. The net decrease in the combined fund balances during the current year in the debt service funds was just $0.2 million, which was less than a 1% change from tile prior year, Proprietaryfitn(Is. The County's proprietary funds provide the same type of information found in the govern rnent-wide Financial statements, but in more detail. Unrestricted net position of the Kulainiano Elderly Housing Project (Kulainnano) at the end of tile year amounted to $638,675, and $578,,526 for the OUH Ekahi Affordable HOUSing, Project (Ouli Ekahi). The total net position for Kulainiano increased by $82,117and the net position for Ouli Ekahi increased by $88,831. Other factors concerning tile finances of these two funds have already been addressed in the discussion of the County's business -type activities, Differences between tile original budget and, the final amended budget were primarily the result of a $55.2 million increase in appropriations, the most significant reasons were due to $42.0 million in increases in tile: grant appropriations from tile State relating to the response: and recovery efforts, for the lava disaster, Differences between the final budget and the actual! (budgetary basis) resulted in approximately $5.7 million less revenues than expected and $27.8 million less expenditures, than appropriated. This is primarily due to the following factors: Tile negative variance of $5,7 million in revenues is comprised mostly of $5.5 million from intergovernmental revenues, of which $2.2 million was unrecognized in the General Fund of the State's grant relating, to tile lava recovery efforts and was instead recognized in the respective funds that incurred the actual costs. $6,9, million of the unspent appropriations is related to salaries and wages and the various countywide expenditure accounts relating to salaries and wages. Tile variance is due primarily to unfilled vacancies and continued efforts by each department to control payroll costs during the budget year due to tile tough econoniic conditions facing the County. The following ftnictions are responsible for the majority of the variance: public safety ($3,3 million) and general government ($2.6 million). M $2,9 million is due to lower than anticipated payments needing to be made in retirement related payments, With each department increasing efforts to, control costs, overtime was also closely monitored and the corresponding pension expenditures were not incurred, 0 $13 million is due to the fact that the increase in health premiums for employees were lower than, originally anticipated. CAPITAL ASSET AND DEBT ADMINISTRATION Capital assets. The County's investment in capital assets for its governmental and business -type activities as of June 30, 2019 amounts to $1.3 billion, (net of accumulated depreciation). This investment in capital assets includes land and, improvements, buildings and improvements, equipment, easements, and infrastructure assets, which consists of primarily roads and bridges. The total increase in the County's investment in capital assets for the current fiscal year was I percent, Major capital asset events during the current fiscal year included the following: 0 Construction continued on the Kalaniana'ole Avenue Reconstruction; construction in progress as of the end of the current fiscal year had reached $3,5 million with $2.3 million coming from the current fiscal year. Construction continued on the Manialahoa I lighway Widening; construction in progress as of the end of the current fiscal year had reached $8.0 rnillion with $6.5 million coming from the current fiscal year. Construction continued on the Office of the Prosecuting Attorney; construction in progress as of the end of the current Fiscal year had reached $7,1 million with, $6.2 million corning, from the current fiscal year. 0 Construction continued on the Hawaii County Radio System Upgrade project; construction in progress as of the current fiscal year had reached $12.1 i1flillion with $1.4 million coming from the current fiscal year. Construction continued on the Kawailani Street Improvements ('1walani to PohakLflani); construction in progress as of the end of the current fiscal year had, reached $19.2 million with $8.9 million coming from the current fiscal year; project was transferred to infrastructure. Construction continued on the Kealakehe WasteNvater'Freatment Plant 1 -1 Upgrade project; construction, in progress as, of the end of tile current fiscal year had reached $4.4 million, with $2.6 million coming from the current fiscal year. •$8.2 million of dedicated roads were received by the County in the current fiscal year, Capital Assets (uet of depreciation) June 30, 2019 and 2018 Additional information on the County's capital assets call be found in note 6 to the basic financial statements. Long-term debt. Long-term debt is, prit-narily comprised of bonds of $3 2.4 inillion, State Revolving Fund loans of $39.7 miHion ai!lid Bond Anticipation Notes of $30.0, At the end of the current fiscal year, the County had total bonded debt outstanding of $382.4 rnillion. This entire amount was cornprised, of general obligatioi:ll bonds which are backed by the full faith and credit of the County. The Courity's total bonded debt decreased by $25.0 million (6 percent) during the current fiscal year due to the retirement of $25,0 of bonds, At the end of the fiscal year, (lie County held an "AAl” rating from Fitch and an "Aa2" rating frorn Moody's for general obligation debt State statutes linlit, the amount of general obligation debt the County may issue Lip to 15 percent of the total assessed value of all county real property as established for tax purposes on the last tax assessment rolls. The current debt limitation for the County is $4.8 billion, which is in excess, of the County's outstanding general obligation debt, Currently the COLITIty'S outstanding debt represents 9 percent of our debt firnitation. Additional information on tile County's, long-term debt can be found in note 10 to the basic financial staternents. q The unernployrnent rate for the County for the current fiscal year is at approximately 3.7 percent, which is 0.7 percent higher than at the end of the prior fiscal year. This is the first increase in unemployment since 2009„ when tile rate was 11,5 percent. 0 The number of dornestic and international visitors to the County for the current fiscal year was approximately 1 .67 million, with an approximately 35 percent decrease Froin the previous year's count of 2,60 million, These factors were considered in preparing the County's budget for the 2020 fiscal year. Primary Government Governmenul Activities Business -type ;NcTi—Vities Total LO 19 2M am R!A 2M 2W Land and improvements $ 263,470,318 $ 256,390,951 S 753,877 S 753,877 $ 264,,224,195 $ 257,144,828 Wrastructure assels 3t2,878,757 309,295,827 - 317„878,75'7 309,295,827 Ground and suds- improvenients - - 49,199 53,546 49,199 53,546 Buildings and improverncras 627,746,572 6:31 „727,8'13 538,410 574,,434 628,284,982 6�32,302,267 Easements 6,250,078 6,169,006 6,250,078 6,169,,006 Equipment 59,337,103 58,918,798 24,068 20,666 59,361,171 58,939,,464 Construction work in progress 58,455,811 50,591,695 - - 58.455,81 t 50,591,695 Tataf 81,3_28,738,639 81,313,094,090 $ 1,365,554 T_1,IF0_2,54.3 81,329,504,193 81,314,496,633 Additional information on the County's capital assets call be found in note 6 to the basic financial statements. Long-term debt. Long-term debt is, prit-narily comprised of bonds of $3 2.4 inillion, State Revolving Fund loans of $39.7 miHion ai!lid Bond Anticipation Notes of $30.0, At the end of the current fiscal year, the County had total bonded debt outstanding of $382.4 rnillion. This entire amount was cornprised, of general obligatioi:ll bonds which are backed by the full faith and credit of the County. The Courity's total bonded debt decreased by $25.0 million (6 percent) during the current fiscal year due to the retirement of $25,0 of bonds, At the end of the fiscal year, (lie County held an "AAl” rating from Fitch and an "Aa2" rating frorn Moody's for general obligation debt State statutes linlit, the amount of general obligation debt the County may issue Lip to 15 percent of the total assessed value of all county real property as established for tax purposes on the last tax assessment rolls. The current debt limitation for the County is $4.8 billion, which is in excess, of the County's outstanding general obligation debt, Currently the COLITIty'S outstanding debt represents 9 percent of our debt firnitation. Additional information on tile County's, long-term debt can be found in note 10 to the basic financial staternents. q The unernployrnent rate for the County for the current fiscal year is at approximately 3.7 percent, which is 0.7 percent higher than at the end of the prior fiscal year. This is the first increase in unemployment since 2009„ when tile rate was 11,5 percent. 0 The number of dornestic and international visitors to the County for the current fiscal year was approximately 1 .67 million, with an approximately 35 percent decrease Froin the previous year's count of 2,60 million, These factors were considered in preparing the County's budget for the 2020 fiscal year. At the end Of tile CUrreni fiscal year, unrestricted fund balance in the general fund was $42.4 million. The Comity has appropriated $21.8 million of this amount for spending in the 2020 fiscal year budget and the majority is included in the assigned portion of the fund balance. REQUESTS FOR INFORMATION his financial report is designed to provide: a general overview Of tile Countys finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the Director of Finance, County of Hawa�Vi, 25 AupUni Street, Suite 2 103, Hilo, Hawaii 96720. was BASIC FINANCIAL STATEMENTS COUNTY OF HAWAII Statement of Net Position June 30, 2019 Primary Government —Clo—v—ernmental Business -type Component Activities Activities Total Unit A5.sc(s Current assem Cash and cash equivalems (notes 3 and 14) S 95,429,774 $ 1,180,315 S 96,,610,089 S 20,115,848 Restricted cash and cash, equivalents (nrooiL 3) 105,8 17,735 42,514 1 O35,860,249 Total deterred outfloof resources ws Investments (note 3) 3,227,6017 Total Assets and Deferred Out flows: of Resources 3,227,607 13,000,0100 Restricted investments (note 3) 32,897,286 32,897,286 Receivables,, net (note 4) 73,134,050 6,154 73,140,204 10,838,992 Receivable from improvement district (notes 4 and: 10) 107,752 107,752 I nierna I balances (note 5) 3,500 (3,500) Inventories 7,297,830 7,297,8314 1,531,481 Prepaid expenses 80,,420 2,059 82,479 55,968 Other 1,806,244 1,80,6244 - Total current assets 3119,802,198 __J_12�7� 4-1 Lt 321,029,740 5,12,289 _j5,_ Investivents (note 3) 13,877,211 13,877,211 17,000,000 Restricted investments (note 3) 15,734,285 15,734,285 Restricted cash and cash equivalents (note 3 and 14) - 72,674 72,674 888,225 Receivable from improvement district, excluding current portion (notes 4 and 10) 1,887,115 - 1,887,115 Capital assets (notes 6, 8 and 14): Utifity plant in service, net - 245,904,985 Infrastructure assets, net 312,978,757 3 12,8 78,757 - Ground and site improvements, net 49,199 49,199 BuHdings and improvements, net 627,746,572 538,410 628,284,982 Equipment, net 59,,337,103 24,068 59,361,,171 Easements, net 6,250,078 6,250,07'8 - Preliminary survey and investigation charges - 6,140,398 Land and improvements 263,470,3 18 753,877 264,224,195 5,204,598 Construction work in progress 58,455,811 58 455,811 ---- . ....... .. . . . 39 3'06,688 . . ........ . . -- 'Total Capital assets, net 1,3213 138,63'9 1,365,554 1,329,504,193 296,556,069 Total noncurrentassets 1,359,6137,250 1,4381228, 1,361,075,,478 314m444,294 Total assets 1,679',439,448, _ 2„665,77 _Q 6 05 , 2118 j_ 1-1111— . 319 , 986 , 583 —1-11-11- Deferred Outflows of Resources Deferred loss an refunding 5,997,547 5,997,547 - Deferred outflow related to pensions and other post ernt0oyment benefits (notes 13 and 14) _107,042,306 .... ...... 207,042,30612,278,889 Total deterred outfloof resources ws 213,039,853 213,01 ,�53 1��782,889 . ............ — I-- Total Assets and Deferred Out flows: of Resources 1,892,479,3011 2,665,770 1,895,145�,071 372,265,472 ME= COUNTY OF HAWAH Statement of Net Position I une 30, 21019 (Concluded) lWlll!!l 11rimary Gmernment Governmental 13usinc5s-type Coniponcro Activities Activities Total Unit Liabilities Current liabilities: Accounts payable and accrued liabilities S 21,126,698 S 72,921 21,199,619 $ 3,099,214 Accrued payroll 10,773,598 10,773,598 1,582,476 Advance collections - intergovernmental 26,514,196 1,279 26,515,,475 Interest due on long-term debt 6, 111,069 8,815 6,119,884 605,077 Bonds and loans payable, current portion net (notes 10 and 144 60,998,287 102,520 61,100,807 5�,613,168 Compensated absences, current portion (note 10) 10,626,781 10,626,781 563.533 Claims and Judgments, current portion (notes 10, 12 and 14) 4,495�,902 4,495,902 174,262 Capital leases, current potion (notes 8 and 10) 3,,359�,81 0 3,3 5 9,8 10 Landfill costs payable, current portion (notes 9 and 10) 359,009 359,0109, - Customers'deposits - - 200,460 Other 9,305,885 9,305,8,8,'5 - Total current liabilities 153,671.235 185,535 153,856,770 11,83,8,190 Noncurrent liabilities - Bonds and loans payable, net (notes 10 and 143 449,1341,834 595,257 449,730,091 65,009,512 Compensated absences (note 101 3 t,785,932 31,785,932 1,,144,142 Claims and Judgments (notes 10„ 12 and 141 26,988,581 26,988,581 604,738 Capital leases (notes 8 and 10) 8,219,.522 8,219,522 LandfiIi costs payable (notes 9 and 10) 30,6515,9,91 30,65�5,991 Unearned revenue, noncurrent a 1,583,953 Cumorners' deposits - 15,68�O,076 Net pension liability (notes 13 and 14) 636,645,242 636,645,242 33,522,053 Net OPEB liability (notes 13 and 141 400,834,810 400,834,810 16,431,746 Other 9,467,722 9,467,722mm_ - Total noncurrent liabilities 1,593,732,634 595,257 1 594 327x891„ 133,982,220 Total liabilities, 1,747b403,869 781 797 J.1748, 184,661 145 820,4 10 Deferred Inflows or Resources Del'erred: intlows related to pensions and other post employment bene Fits (notes 13 and 14) 15,,043,306 15,0143,306 2,446,102 Deferred inflows - other 1,927,629 ....927....... 62'9 6 Total Deferred Inflows of Resources 16970931 16,970,935 2,5 q 5�.74 5 Total Liabilities and Deferred Inflows oif Resources 1,764,374,804 780,792 1,765,155,596 148,336, 155 Net Position Net investment in capital assets 866,986,564 667,777 867,654,341 226,821,614 Restricted for: Debt service (note 10) 3,3,211,359 - 33,211,359 Highways, streets and abandoned vehicles 22,013,29'5 22,0 13,,295 Public access open space 25,642,884 25,642,884 Offier 2,362,529 2,362,529 Unrestricted ,13 4' _L 112 j 01 1,217, 1714 rte, 2K) (2,92,27y1 Total net position 128,104,497 S 1,8844978 $ 129,989,475 $ 223, 92x.1,317 See accompanying notes lo (lie hasle fin ancml Sul mlicints. lWlll!!l MIGMHVAI� M Statement o'f Activities For the Fiscal Year Ended June 30, 20119 General revenues: Taxes: Property taxes, levied for general purposes public service company taxes Franchke taxes Fuel taxes General excise tax surcharge Grants and contributions not restricted tospecific programs Investment earnings (expense) Miscellaneous Total general revenues Change in net position Net position, beginning ot'year, as previously stated Prior period adjustment Net posi0o'n, begivining of year, as restated Net position, end o'l'yeir See accornpanying riates to the basic financial mamnenm Prowarn Revenues Operating Capital Charges for Grants and Grants and Funcj:ioDj/ grarns 11roj_ E JL ®e Services Contributions Contributions Primary government-. Governmental activities': General government 88,660,088 $ 2,149,3�53 $ 2,778�,0 17 S 3,0211,,1 '17 Public safety 248,111,465 6,220,940 31,223,5'36 Highways and strects 62,066,700 17,870,107 3,542,6'29 24,433,469 1 feakh, education and %yellare 37,919,675 1,320,363 25,761,216 103,488 Culture and recreation 35,908,061 1,940,302 68,355 100,000 Sanitation 62,775,0174 25,858,609 912,069 718,492 Interest on long-term debt 13,277,652 - 'Total governmental activities 548,718,715 55,359,674 64,285,842 28,375,5'6'6 Business -type activities: Health, education avid %veffare 6'09,486 5111,3'52 261,848 . . ..... . . ............ Total primary government S 549,328,201 $ 55,870,026 $ 64 547,6'910 $ 28, 375',566 Component unit: Water(note 14) $ 6t,231,7'13 S 49,871,792_ S S 031,723 L General revenues: Taxes: Property taxes, levied for general purposes public service company taxes Franchke taxes Fuel taxes General excise tax surcharge Grants and contributions not restricted tospecific programs Investment earnings (expense) Miscellaneous Total general revenues Change in net position Net position, beginning ot'year, as previously stated Prior period adjustment Net posi0o'n, begivining of year, as restated Net position, end o'l'yeir See accornpanying riates to the basic financial mamnenm Net Net Position Primary Government Clovernmental Business -type Component Asr�l �vn Aalyjj�ir law ulul ('80,712,601) S (8 O�, 7 12,6O 1 ) $ (210,666,989) (21(1,666„989) (16,220,495) (16,220,495) ('10„734,5'88') (10,734,588) (33,799,404) (33,799,404) (35,285,904) (35,285,904) 13, L77.�D . . ...... . -I13„2'77,65.2' (400,697,633) - (400,697,633) 162,714 162,714 (400,697,63. . . . 162,714 X400 534 91<7) .. ....... . - — ------------ - .......... .......... --L— ___ 315,969,118 315,969,118 8,493,409 8,493,409 9,441,986 9,441,986 17,343,326 17,343,326 12,518,126 12,5,18,126 19,748,211 19,748,211 3,420,693 8,234 3,428,927 824,715 1,848,245 1,848,245 - 388,783„114 8,234 388,79�1,348 - — - - - --------- -- - — — 824,715 -------------------- - ---- (11,914,5 19) 170,948 (11,743,57 1) (5,503,483) 140�„,019,016 1,714,030 141,733tL,,'I6 _12'7,7911,263 ................... 1,641,,537 140 019,0)6 1,714,030 141.,7.3 _046 229,432,800 S 128,104,497 $ 1,884,978 $129,989,475 S 223,,929,3117 - 31 - COUNTY OF HAWAII Governmental Fuinds, Balance Sheet June 30, 2019 Assets Cash and cash equivalents (note 3): Investments (note 3) Receivables, net (note 4) Due from other governmental funds, (note 5) Due from other nongovernmental funds (note 5) Receivables from other governments (note 4) Inventories Other Total :,assets Liabilities, Deferred Inflows and Fund Balances Liabilities; Accounts payable Accrued payroll Due to other governmental funds (note 5) Advance cat lections-intergovernmental Bond anticipation note payable (note 10) Other Total liabilities Deferred Inflows of Resources: Unavailable revenue (note 7) Fund balances! Nonspendable: Inventory Restricted for: Debt service (note 10) Highways, streets and abandoned vehicles Public access open space Other Cornniftted to,: Budget stabilization Disaster and emergencies Lower Puna, area Rental assistance and subsidy Sanitation Self insurance Highways, streets and abandoned vehicles Parks and recreational projects Zoning change impact mitigation (fair share) Other Assigned to: Subsequent year's budget Other Unassigned Total fund balances Total liabilities, deferred inflows, and fund balances See accompanying notes to the basic financial statements, Other Totall Capital Governmental Governmen0l: General Funds Funds S 57,325,947 $ 75,150,3 16 $ 68,771,246 $ 201,247,509 27,688,091 16,731,545 21,316,753 65,736,389 25,930, 167 3,184,086 29,114,253 2,626,633 2,710,225 655,795 5,992,653 3,500 3,500 22,463,558 7,913,199 13,643,040 44,019,797 7,297,830 - - 7,297,830 933,307 842,666 t 111 6,9! 1 1, 6,664 U41=1U 1LU.U= 6,517,652 $ 10,33 1,74 1 S 4,277,305 $ 21,126,698 9,342,094 1,431 „504 10,773,598 567,900 444,296 4,980,457 5,9,9,2,653 19,729,975 6,772,223 1 1'998 26,514,196 - 30,000,000 - 3,0,000,000 4,061,374 657 - 3,6�8 637,905 5,356,647 2 8 _ 40 L 99 5 _ 05,6 __2;8,228 ---IL3-3-91(19 9'9," -6-12 D 27.857,796_ ,-1241)5L6 31,098 39" 7,297,830 7,297,8.30 33,2 11,359, 33,211,359 24,543,005 22,013,295 46,556,300 25,642,884 - - 25,642,884 799,769 20,216,296 1,562,760 22,578,825 6,887,961 6,887,961 6,393,483 6,393,483 mm 4,274,235 4,,274,235 1,253,946 1,253,946 - 19,902,764 19„9112,764 2,348,835 2,348,835 - 1, 111,5 18 101,665,824 11,777,342 1,993,8916 91,351 2,085,247 3,187,594 3, 1 �87,594 580,872 1,534,197 152,409 2,267,478 21,819,518 1,297,811 2,555,817 3,119,779 76�742 LilaU.21 - 32- 21,819,518 3,853,628 097,18:2. 4 �43 6.4 1 t –JL 4 2w; UIMM Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position June 30, 2019 Total fund: balances- governmental funds S 224,436,411 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities .are not financial resources and therefore are not reported in the funds. These aS5CIS consist of. Land and improvements 263,470,3 18 Infrastructure assets, net 312,878„757 Buildings and improvernents, net 627,746�,5�72 Equipment, tinct 59,337,103 Easements, net 6,250,07'8 Construction work in progress 18,455,81 1 Total capital assets, net Deferred amounts oil refunding ind pension are reported as deferred outi'lows of resources in the government -wide Financial statements but are not are not reported in the governmental fund statements Some of (lie County's revenues wi I I be collected after year-end but tire not available soon enough to pay for the current period's expenditures and therefore are deferred (unearned) in the ftinds, (note 7) Some liabilities are not due and payable in the current period and therefore are not reported in the Funds, 'Mose liabilities consist of: Bonds and loans payable, net of receivable from improvement district (478,13�8,254) Interest due on long-term debt (6,111,069) Capital leases (11,579,332) Compensated absences (42,4 12,7131) ('1aims and judgments (31,484„483') Landfill costs payable (3 1,015,000) Pollution remediation (12,440,73,3) Other Posternployment Benefit Obligation (OPEB) (400,834,810) Net pension obligation, _C636,645,2421 Total long-term liabilities Unamortized gain on refunding Del ,rred amounts related to pension are reported as defierred inflows of resources in the government -wide financial statements but are not are not reported in the governmental fund statements Net position of governmentall activities See accompanying notes to the basic financial suncnients, M 1,328,138,639 213,039„853 (11,650,661,636) mom 128,1014,497 COUNTY OF I I AWA I I Governmental Fu:n:ds Statement of Reyenucs, Expenditures, and Changes in Fund Balances For the Fiscal Year Ended June 30, 2019 General government 41,689,635 - othcr Total Public safety 136,790,449 C apital Governmental Governmental Highways and streets Generalrojecks - Funds Funds Revenues 9,050,340 - 22,058,457 31,108,797 Property taxes $ 313,63 t, 189 S $ $ 31.3 „631, 18'9 Public service company taxes 8,493,409 - 8,493,409 Fuel taxes 17,343,326 17,343,326 Public utility franchise taxes - - 9,441,986 9,,44 1,986 Licenses and permits 9,189,121 - 15,464,184 24,653,305 General excise tax surcharge - 12,518,126 12,518,126 Intergovernmental 60,455,809 15,683,014 25,487,990 101,626,8 13 Charges flor services 3,913,656 - 23,602,635 2 7,5 l 6,291 Investment earnings 3,746,164 336,984 64,351 4,147,496 Other 2,506,79 l 3d6',798 1, 82 5 638 4,642,627 Total revenuesL . .......... 4 !,936 13 6 16 '3311„796 105,747,636 — 524,014,568 --l— — General government 41,689,635 - 110,097 41,799,732 Public safety 136,790,449 - 8,303,956 145,094,405 Highways and streets 2,352,035 - 25,096,477 27,448,512 Health, education and welfare 9,050,340 - 22,058,457 31,108,797 Culture and recreation 20,828,166 1,193,509 22,021,675 Sanitation 1„151,3411 42,663,206 43,814,546 Pension and retirement could bul ions (note 13) 46,874,702 6,262,215 53,136,917 Ernployces' health insurance 14,762,682 2,759,188 17,521,8703 Other postcrnpoymcnt beneras 39,636,911 - 39,636,911 Other 2,8196,079 1,417,756 4,,3 13,835 Debt servim Principal 1,431,798 29,,145,553 30,577,351 Interest 85,555 278,868 18,858,175 19,222,598 Capital outlay 2,6'33,012 49,264,384 - 51,897,396 'Total expenditures 320,182,704 49,543,252 157,868,589 527,594,545 Excess (deficiency) of revenues over (under) expenditures 81,753'.432 (33,212,456)�512,120,9153) (3,579,977 (Continued) COUNTY OF HAWAJ I Governmental Funds Statement olRcvenucs, Expenditures, and Changes in, Fund Balances For (lie Fiscal Year Ended June, 311, 2019 O' titer Financing Sources (Uses) Sale of assets Increase in caapi[a] ]cases (notes 8 and 10) State Revolving Fund loans (note 10) Transfers in (note 5) Transfers on[ (nate 5) Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Increase in reserve for inventories Fund balances at end arrear (Concluded) Sec accompanying notes to Tice basic financial staternews. Other Total Capital Governmental Governmental General_ jects 2L6 Funds Funds 46,712 $ $ 46,712 2,382,911 - 4,393,725 6,776,636 - 7,439,296 7,439,296 7,625,045 69,615,396 77,240,441 __J69,617,3961 _C ,623,04 i) . ,24Q,44j) (67,1872773) 15,064,341 66,386,076 14,262,6,M 14,565,6591 (1 8, 148,115) 14,265,123 10,682,667 61,040,124 73,290,438 78,840,223 `2113,1711,,785' -182,259 582,959 L 76,188,742 ,323 . _ Lj5,1j2 93,105,346 L _ 224,436,1 l I L_ Sec accompanying notes to Tice basic financial staternews. COUNIN OF HAWAII Reconciliation of the Cliange in, Fund Balances of Governmental Funds to the Statement of Activities For the Fiscal Year Ended June 30, 2019 Net change in fund balances - total governmental funds ,mounts reported for governmental activities in (tic staternent of activities are different because: Capital outlays are reported as expenditures in governmental funds, however, in the stater neat oractivilies, the cost of capital assets is allocated over their estimated useful lives as depreciation expense In the current period, these amounts are: $ 10,682,667 Capital outlay 53,654,696 Dedicated and contributed property 9,007,217 Depreciation expense and loss on disposals Q47,617,365 Excess of capital outlay over depreciation expense 15,044,548 Borrowings provide current financial resources to governmental funds, however, issuing debt increases long, -terra liabilities in the slateirlent of net position, In the current period, assets financed through; State Revolving Fund loans (7,439,296) Capital leases (6 776,63 Total debt proceeds (14,2 15,932) Repayment of long-term debt is reported as an expenditure in governmental funds, but the repayment reduces lung -terra liabilities in the statement of net position, In the current year, these aniounts consist of: Bond principal retirement 24,900,698 State Revolving Fund loan rcpaymentsd1orgiveness 3,393,572 Capitai lease payment,$, 3,309,881 Total long-term debt repayment 31,604,151 Because sone revenues wilt not be collectcd for several months aftcr tile County"s fiscal year end, they are not considered "avaflablc" revenues andi tire "deflerred" in the governmental Bunds, Unearned revenues increased by this amount this year, 789,43 (Continued) MIUMUMPEROMM Reconciliation of t�he Change in Fund Balances of Governmental Funds to tbe Statement of Activities For the Fiscal Year Ended .1 unc 30, 201,9 (Concluded) Some items reported in the statement of activities, do not involve current financial resources and therefore are not reported as expenditures in governmental funds. These activities, arc; Increase in inventories, 582,959, Increase in compensated absences (1,275,734), Increase in clairns andjudgmeats (13,349,0,74) Increase in landfill closure/posiclostire core costs (1,008,000) Decrease In pollution reniediation costs 703,526 Amortization of'premium From, bond issurince 6,299,484 Arnortization ofdeferrcd loss an refunding (,7914,937) Amortization of gain on refunding 107,761 Net decrease in accrued interest 337,638 Net decrease to expenses related to Other Posternployment Benefit Obligation 1,050,1927 Net increase to expenses related to pension and:, salariesand wages �4,468,9-3� Net additional expenses814 384 Change in net position of governmental activities LS112L4,j5�) Selo accompanying notes to, the basic financial staternents, COUNTY OFHAWAII Genei-al Fund Statement of'Revernies, Expenditures, and CIhanges in Fund Balance - Budget rand Budgetand Actual ftidgoary Rasis) For the Fiscal Year Ended Erne 30, 2019 ZMEM Actual Variance Original Final (Budgetan, 110silive Budget Budget Basis) - -it�5RaCIVOL Revenues: Taxes and assessmenm Property taxes S 317,000, 00 $ 313,100,000 3 13,63 1,189 $ 531,189' Public service company taxes 8,840,000 8,840,00:0 8,493,409 ____346,5.1 Total taxes and assessments 325,840,000 321,940,000 322,124,598 184,598 Licenses and permits: Nonbusiness ficenses and permits 4,252,620 4,252,620 4,135,116 (117,504) Business licenses 2,067,161 2,067,101 1,841,2'49 (225,852) Street use 3,042,000 3,042,000 3,212,756 170,756 Total licenses and permits 9,36 1,721 9361 ,721 9, 189, l 21 LIL21.�)OO) Intergo%wrimental: Federal: Prograrns for the: aged 2,499,718 2,507,883 1,570,260 (937,623') Community devetopnwnt black grants 2,766,347 2,766,347 Law enl'orccrtient 3,446,808 4,405,901 3,079,344 (1,326,557) Other 3,465.047 6,728,844 7,005,613 276,769 Total 1'ederal 9,41 I,573 16,408,975 14,421,564. ILI D State: State Gcneral Fund - Act 185, S1,11 1990,, 19,158,000 19,158,000 19,158„000 Emergency medical services 16,830,274 19,509, t 82 19,509,182 Other 6,930,908 54,458,681 (3, 5_3 1, 5 1) Total State 42,919,182 93,125,863 .............. 89,594,264 (3,531,599 , Total intetgovernmental revenue 52,330,755 W9,534,838 104,015,828 (5,5 19,0 10 Charges for services: General government 41,660,883 4,660,883 4,586,432 (74,451) Culture and recreation 1,830,9010 1,830,900 1,2a98,.306(532,594') Highways and streets 1,212,000 1,212,000 957,931 (254,069) Public safety 111,768 111,,768 115,337 3,569 Total charges for services 7,'815,551 7,8 15 5 5 1. - . . . 6,958,006, ...... Fines mid forfeitures 2,310,300 2,310,30!0 1,203,014 (1,107,286) Rents 208,500 20,8,500 208,812 312 ZMEM General Fund Statement of Revenues, Expenditures, and Changes in l'und Balance Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 2019 (Continued) Actual Variance Original Final (Budgetary Positive Bbuda et F3ud a t Basis) 11e ativa— Revenues (continued): Interest and penalties $ 1,000,000 -------- 1-1--- . ......... . . . S1,400.040 S 3,149,645 S 2,149,645 Miscellaneous 4,8,58,1 96 5,360,4 18 5,017,6'64 (342,754 Total revenues 403,725,0123 457,53 1,328, 451,866,688 (5,664,640) Expend iltu!res, Current: General) government: Finance 13,266,,249 13,268,008 1:11,065,118 2,202,89'O General! government building 5,430,344 5�,710,344 5,309,814 400,53,01 Lcgislaflye 3,979,893 3,711,659 3,4114',145 3,11,514 Automotive equipment 4„812,108 4,820,1018 4,405,972 414,136 Law 2,993,817 2,993,817 2,716,,360 277,457 Research and development 2,761,610 3,870,356 3,586,094 284,262 Planning and zoning 4,,338,087 4,353,087 3,409,121 943,966 Mayor's office 1,753,7112 7,499,914 7,353,582 146,332 Engineering 1,807,685, 1,4961,685 1,296,585 240,100 Information technology 2,897,640 2,987,535 2,762,331 225,,204 Human resources 2,119,860 2,119,940 1,920,550 199,390 Public works administration 2,118,316 2,26'1,316 2,122,635 138,6811 Elecfions 1,121,204 1,121,204 1,022,663 98,541 Legislative auditor 786,540 786,540 577,83'5 208,705, Total general government 501,187,065inns� 5�7,000,5,13 ...50,948,805 6,05'1,708' Public safely. Police department 67,294,5613 67,985,533 64,978,267 3,00,7,266 Fire department 48,263,603 50,813,298 49,658,431 1,154,867 Prosecuting attorney 10',453,416 10,924,130 9,903,681 1,0,20',449 Protective inspection 3,613,3114 3,613,314 3,115,13,4 4918,180 Liquor control 2,,0'52,6,01 2,115,927 1,840,9918 274,9'29' I"lood control 330,000 330,000 330',0010 Civil defense agency 2,212,631 2,447,381 1,60,8,3�66 839,015 Ani nal control 2,185,706 2,185,706 2,08 1,62 5 104,081 Total public safety 136,405,834 144,415,289 133,516,502 6,898,787 Highways and streets: Mass transit 6,474,785 2,71'2,640' 1,925,834 786,806 (Continued) COUNTY 071F HAWAII General Fund Statement ol"Revenues, Expenditures, and Changes in Fund, Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 2019 (Continued), Actual Variance Original Final (Budgetary Positive, Bud ____Pudffet Basis) c ve) Expenditures (continued), Current (continued): Health, education and weUbre: Elderly activities S 4,306,190 S ,069,658 $ 4,398,743 $ 670,915 Office of aging 3,970,588 3,979,588 2,328,226 1,651,36l2 Education 58,500 58,500 5 1,876 61,6124 Social prograrns 1,500,002 1,500,0l02 1,464,296 35,706 Cemeteries 422,542 433,122 394,113 39,009 Physical examination 133,826 133,826 133,825 I Total health, education and welfare 10,391,648 11,174,696 8,771,0:79 2„4013„617 Culture and recreation: Community music 291,629 292,629 221,784 70,845 Organized recreation: Maintenance 10,386,359 10,395,926 9,841,719 554,207 Recreation 3,217,707 3,259,957 3,188,105 71,852 Aquatics 2,544,791 2,517,391 2,249,402 267,989 Hoolulu park complex 1,036,098 1,037,914 1,022,404 15,510 Administration 2,0018,737 1,849,877 1,695,,635 154,242. Childrcrt's zoo 829,333 829,333 780,861 48,472 Surnmer/Intersession 505,018 511,768' 433,039 78,729 Culture and arts 299,354 3011,814 234,283 67,571 Elderly activities administration___.__.__ 710,474 --------- 722,024. 6222.5. 7 2 - 99,452 Total culture and recreation 21,829,500 21,718,673 20,289J,804 1,428,869 Sanitafion.. Environmental management 1,212,065 1,212,065 1,150,320 61,745 Pension and retirement contributions 49',981,132 50302,288 .47,318,710 2,9,83,578 E..................... mployees' health insurance 16,0100,000 - ------ 16,0001,000. . 14,704,49l51„295„5015 Other posternployment benefists 39,806,000 39,806,000 39,650,111 - ------ I - 55, - 889 Other 5,160,500 46,268,100 42„212',481 4„0551,619 Total current 337,448,529 386,6 1 Ol,264360,488,141 . ....... . . . . ...... . .... . 261,122,123 (Continued), COUNTY O�F HAWAII Genera Fund Statement ol'Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30,24319 Expenditures (continued): Capital Outlay: Community Development Block grants (HUD) HOME Program Other Total capital outlay Total expenditures Excess, of revenues over expenditures Other fi:nancing sources (uses), Transfers out: Housing Fund Solid Waste Fund Sewer Fund Golf Course Fund Capital Project Fund Sell' TISUrance Fund Disastcr�Ernergency Fund Public Access, Open Space, and Natural Resources Preservation Fund public Access, Open Space, and Natural Resources Presenadon Maintenance Fund Budget Stabilization Fund Debt Service Fund, Total transfers out Total other financing uses Excess (deficiency) of revenues and other sources over (under) cxpenditures mid other uses Fund balance at beginning of year Fund balance at end of year See as conipanying notes to the basic financial statements, (Concluded) Actual Variance Original Final (Budgewry positive � Bw� s Ba L.�A(l v 0 l, Bud ct S 150,000 S 3,0 16,347 $ 2,820,99�4 S 19:5,353 50,000 532,731 454,571 78,160 - 1,425,000 - 1,425,000 200,0100 4.974,078 3,,275,565 .1„698.51'3'.. 337,648,529 191,584,342 363,763,70,6 27,820,636 66,076,494 65,946,986 M 102,98�2 22,155,996 (2,012,389) (1,978,639) (1,256,2010) 722,439 (19',281,7"7'0) (19,281,770) (19,28 1,770) - (2,9187,914) (2,987,9'14) (2,987,914) (580,368) (760,368) (760,368) (2,00(1) (2,0001), (1,000,000) (1,0,00,00101) (250,0100) (250,000) (250,000) - (6,340,00101) (6,292,0001) (6,272,624) t 9�,3 76 (792,50101) (786,5,00) (707,135) 79,365 (250,000) (250,000) (250,000) - (49,003,708) _(49,205,130), (49,205,130) _..(8.1,498,649) 794,321 (81,973,141) 821,180 _(81,414�) 97.3,14 JI 821,180 (15,422,155) (16,847,33 5) 6,129,841 22,977,176 61,040,124 61,0401,124 61,040,'124 $ 45,617,969 S 44,192,789, S 67,169,965 $22,977,176 EM COUNTY OF HAWAII Proprietary Funds Statement of Net Position June 30, 2019 Assets Current assets: Cash and cash equivalents (note 3) Restricted cash and cash equivalents (note 3) Imprest fund (note 3) Receivables, net (note 4) Prepaid expenses Total current assets Noncurrent assets: Restricted cash and cash equivalents (note 3) Capital assets (note 6): Land and site improvements Buildings and equipment Less accumulated depreciation Total capital assets Total noncurrent assets Total assets Liabilities Current liabilities: Accounts payable Due to other governmental funds (note 5) Security deposits payable from restricted assets Deferred revenue Interest payable Notes payable, currcnt portion (note 10) Total current liabilities Noncurrent inabilities: Notes payable (note 10) Total liabilities Net Position Net investment in capital assets Unrestric(ed Total net position See accompanying notes to (tic basic financial statenients -42- Business -type Activities - $ 29,499 1 nterL)rise ]-,'undq Kulairnano OLIH Ekahi Elderly AlIbudable Housing Housing 2,059 o east Tot, I 665,123 S 515,042 S 1,180,165 13,015 29,499 4 2,5 14 50 too 150 160 5,794 6,154 2,059 - 2,059 680,60�7 550,435 1,231,042 72,674 72,674 511,000 515,727 1,026,727 1,224,273 488,823 1,713,096 JJ�6,753,5 '_) 71 J6 -374 269) _LL.. 468,520 897,034 1,36,5,554 468,520 969,708 j,438,,228 1,149,127 1,520,143 2,669,270 16,219 15,637 31,856 3,500 3,500 13,015 28,050 41,065 383 896 1,279 8,,815 - 8,815 66,186 36,334 102,520 108,118 80,917 189,1135 _463,68 _131,569 595,257 571,806 212,486 --- 7114,292 (61,354) 729,131 667,777 638,675 578,526 1,217,201 S 577.3211 $ 1,307,657 S 1,884,978 COUN'TY OF HAWAII PropHetary Funds Statement of Revenues, Expenses, and Changes in I"Und Net Position For the Fiscal Year Ended June 30, 2019 Operating revenues: Rental reoeil)B from tenants Rental SUbsidy from federal government - I -IUD Laundry receipts Other Toud operating revenues Operating expenses: utilities General and adniHstradon Maintenance and repairs Depreciation (note 6) 'Total operating expenses Operating inconle Nonoperiting revenues (expenses,); Investrnent income Interest expense (Loss) on disposal of assets Total nonoperating revenues (expenses) Change in net position Net position, begi nning of year Net position, end of'year See accompanying notes to the basic financial statements -43 - Business -type Activities- Lmer2rise Funds Kulaimano Ouli, Ekahi Elderly Artbrdable Hot6ing Housing Project ---- 'row $ 139,374 S 333,70-9 S 473,0183 261,848 261,848 3,070 - 3,070 266 33,933 34,199 _'10-4,558 3,67,642 772,200 36,670 58,086 94,756 159,979 104,593 264,572 67,409 100,514 167 923 34,3�97 15,639 50,036 298,455 278,832 . . . ............ . 77,287 ,103 88,810 1914,913 8,213 21 8,234 (28,3,45) - (28,345) 854), (3,854) 82,117 88,831 170,948 495,204 1,218,826 . 1 „714,030- ' K - - $ 577,321 $ 1,307,657 S 1,88�4,9,78 COUNTY OF HAWAII Proprietary Funds Statcrnent ofCash Flows For the Fiscal Year Ended June 30, 2019 See accompanying notes to the basic fmancial staicinerfls . 44 - Business -type Activities - . Enterprise: Funds Kulahnano Ouli EkaN Elderly Affordable I lensing Housing PLULC��t t Total Cash Flows from Operating Activities Receipts frorn tenants 138,702 S 364,751 503,453 Receipts from federal government. HUD 261,848 - 261,848 Payments to suppliers for goods and services 48 252,0L2) ijO, - Net cash provided by operating activities 152,0166 112,6619 264,735 Cash Flows from Capital and Related Financing Activities Principal paid on notes payable (62,622) (46,606) (109,2241') Interest paid an notes payable (29,533) (29,533) Purchase of capital assets ___�.!6,9 Net cash used in capital and related Financing activities . .... . _ 1101 357) 3L6) (IjLq6j) Cash Flows from Investing Activities Proceeds from maturities of investments 1,600,000 - 1,6,0,0,000 Purchase of investrinent.9 (1,600,000) - (1,600,1000) Interest on investments 21 � 12 Net cash provided by investing activities IR,L3JI 21 8,152 Net increase (decrease) in cash and cash equivalents 51,840 65,384 117,224 Cash and cash equivalents at beginning ofycar (including restricted cash and cash equivalents) 626,348 551,931 1, 17&279 Cash and cash, equivalents, at end of year (including restricted cash and cash equivalents) $ 678, I88 S 617,315 S 1,295,503 Reconciliation of Operating Income to Net Cash Provided by Operating Activities Operating income $ 1061,103 S 88,810 $ 194,913 Adjustments to reconcile operating i ncorne to net cash provided by operating acfiyities; Depreciation expense 34,397 15,639 50,036 Change in assicts and liabilities: Receivables, iiet (13) (756) (769) Prepaid expenses (191) - (191) Accounts and other payables 11,686 9,198 20,884 Deferred revenue .... . ..... 84. ....._L22' p 3 J8 _(L Net cash provided, by operating activities S 152,0166 $ 112,669 $ 264,735 See accompanying notes to the basic fmancial staicinerfls . 44 - COUNTY OF HAWAII Fiduciary Funds Statement of Fiduciary Net Position June 30, 200 w"mm Vouchers payable 76,,315 Due to other agency I'Linds 7,242 Accrued liabilities 3,116,482 Advances payable 353,,956 Assets held tbr the benefit of improvement districts Total liabilities 5,023,263 N'et Pos,ition, Held in trust flor other parties 4,640,939 Towl net Position $ 4,640,939 See nocornpanying notes to the basic fimancW statements, Private - Purpose Agency Trusts Funds Assets Cash and cash equivalents (note 3) S 4,009,484 $ X4,318,542 Investments (note 3) 3,625,610 645,0�09 Receivablm Duc From other agency flunds 7,242 Other receivables 5,845 52,470 Total receivables 5,845 59,712 Total assets 4,640�,939 _5 I23,2.63 w"mm Vouchers payable 76,,315 Due to other agency I'Linds 7,242 Accrued liabilities 3,116,482 Advances payable 353,,956 Assets held tbr the benefit of improvement districts Total liabilities 5,023,263 N'et Pos,ition, Held in trust flor other parties 4,640,939 Towl net Position $ 4,640,939 See nocornpanying notes to the basic fimancW statements, COUNTY OF HAWAII Fiduciary Funds ;Matt: hent of Changes in Fiduciary Net Position For the Hscal Year Ended June 30, 2019 Deductions Claims Consultant 293,760 Grant payments 914,418 Investment Fees - 1-3,495. Total deductions 401,6731 Change in net position (174,93,3,) Net position, begi vining of ),car 4,8,1:5,872 Net position, end of'year S 4,640,939 See accompanying notes to the basic Financial statements .46- Private - Purpose Trusts Additions Contributio1w Puna Geothermal Venture S 50,000, Inyestment earnings: Net increase in fair Yalue of invesirnents 105,684 Dividends and interest 71,056 Total additions 226,740 Deductions Claims Consultant 293,760 Grant payments 914,418 Investment Fees - 1-3,495. Total deductions 401,6731 Change in net position (174,93,3,) Net position, begi vining of ),car 4,8,1:5,872 Net position, end of'year S 4,640,939 See accompanying notes to the basic Financial statements .46- HVIERMlymm Notes to the Basic Financial Statements June 30, 2019 The accounting policies of the County of Hawai"i (tile: County) conform to U.S. generally accepted accounting principles (GAAP) as applicable to local goverriniental units, The following notes to the basic financial statements are an integral part ofthe County's Comprehensive Annual Financial Report (CAFR). SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Financial Reporting Entity The County has irnpiernented Governmental Accounting Standards Board Staternent No, 14, The fi'inancial Reporting Emily (GASB Statenient No. 14), Statenient No. 39, Deterinining Whether Certain Orgonizatiwis Are Component Unils (GASB Statemeet No. 39) and Statement No. 6 1, The P"inancial Reporting Entity Omnibus ati cunendinent ()J'(;ASB SlatenienIs No, 14 and 34 (GASB Statement No. 6 ]). 111 organizations, activities or functions that iliect the criteria in GASB Statement'No. 14, No. 39 and No. 6 l for inCILISiOn in the reporting entity are included ill the COLInty's basic financial statements. Priniary Governnient The County operates tinder the Mayor-COL111611 forni of governinent under a charter that became effective oil January 2, 1969, and was amended in 1979, 1982, 1990 and 2000, The County's operations are organized by the f7ollowing functions: general governinerit; public safety; highways, and streets; sanitation; health, education and welfare; culture and recreation; pension and retirernent contributions; health fund; iniscellaneous-, capital outlay; and debt service, The State of FlawaN (the State) assumes full responsibility for several major ffilldiOM usually perfori-ned by local, governinerits, including education, welfare, health and judicial functions. There are no separate city, county or township governnients nor any school districts, special districts, authorities or public corporations with overlapping authority, GASB Staternent No, 14, as arriended, defines, cloinponent units as legally separate organizations for which the elected officials of the primary government are financially accountable or for which the primary government inay determine, through exercise of management's professional judgment, that the inclusion of an organization that does not rileet the finaticial accountability criteria is necessary in order to prevent tile reporting entity's financial statements frorn being inisleading, "Financial accountability" is the level of accountability that exists ifa priniary government appoints a voting majority of an orgai,flzation's governing board or if the organization is fiscally dependent on the primary government and is either able to irnpose its will oil that organization or there is a potential for the organization to provide specific firiancial benefits to, or impose specific financial burdens on, the primary governinent, A primary governirient has the ability to impose its will on all 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 priniary governnient if any one of three conditions exist: (I ) The primary governi-nerit is legally entitled to or can otherwise access the organization's resources; (2) The primary governi-nent is legally oblig,ated or has otherwise as sunned the obligation to COUNTY Of," HAWAVI Notes to the Basic Financial Statements ME30AM finance the deficits of, at- provide financial support to, the organization; or (3) 'rhe primary government is obligated in sorne manner for the debt of tile organization. As required by GAAP as set forth in G 3 Statement No. 14, No. 39 and No. 61, these basic financial statements present the County of Hawai'i (the primary government) and its component unit, the Department of Water Supply (the Department). This component unit is included in the County's reporting entity because of its financial relationship with the County. Discrefelp Prcmenled Component Unif Tile component unit column: in the basic Financial statements includes the financial data of the Department, a legally independent agency of the Count), 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 tile Water Board, 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 tile County Charter. Although the County does not have the authority to approve or modify the Department's operational and capital budgets, the County has issued bonds oil the;. Department's behalf that are, general obligations of the County. Because the County is obligated to repay these bonds in the event of default by the Department, the County is financially accountable for the debts of the Department. See Note 14 for- component unit disclosures for the Department. C oillplete financial statements of tile Department can be obtained frons the Department of Water Supply, 345 Kekfiana6*a Street, Suite 20, Hilo, I lawai'i 96720. Basic Financial Statements Tile basic financial statements include both governillent-wide (based oil the County as a whole) and fund financial statements. Both the government -wide and fund Financial statements (within the basic financial statements) categorize primary activities as either governmental or business --type. In the government -wide statement of net position, both the governmental and business -type activities columns (a) are presented on a consolidated basis by column, (b) and are reflected, on a full accrual, economic resource basis, which incorporates long-term assets and receivables as well as long -teras debt and, obligations. The government -wide statement of activities reflects both the gross and net costs per functional category (general government, public safety, highways and streets, etc,) which are otherwise being supported, by general government revenues (property taxes, certain intergovernmental revenues, etc.). 'The statement of activities reduces gross expenses (including depreciation) by related program revenues, operating and capital grants. The program revenues must be directly associated with the function (general government, public safety, highways and streets, etc.) or a business -type activity. Tile operating grants include operating -specific and discretionary (either operating or capital) grants while the capital grants COIL111111 reflects capital -specific grants. The net cost (by function or business -type activity) is normally covered by general revenues. sum RM711151MIMMIMMITI M.3fiffl= June 30, 2019 Tile governi-nent-wide focus is more on the sustainability of tile County as an entity and the change in aggregate financial position resulting from: the activities of the fiscal period. Tile Fund financial statements' emphasis is oil the major funds in either the governmental or business -type categories. Nonmajor funds (by category) are summarized into a single column. I'lie governmental funds in the fund financial statcrilcrits are presented using the current financial resource focus and modified accrual basis of accounting. This is the manner in which these funds are normally budgeted. This presentation is deemed most appropriate to (a) demonstrate legal and covenant compliance, (b) demonstrate the source and use of liquid resources,, and (c) demonstrate how the County's actual experience conforms to the budget fiscal plan. Since the governmental fund statements are presented using a different measurement focus and basis of accounting than the government -wide statements' governmental activities column, a reconciliation is presented on the page following each statement, which briefly explains the adjustments necessary to transform the fund based financial statements into the governmental activities column of the government -wide presentation. Tile County's fiduciary funds are presented in the fund financial statements by type (private purpose and agency). Since by definition these assets are being held for the benefit of a third party (private parties, state government, etc.) and cannot be used to address activities or obligations of the government, these funds are not incorporated into the goverm-nent-wide statements. Governnient-ivi(le (itid.fitit(lriiiatic ialst(itenteiiiv —The government -wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfidLICiary activities of tile primary government and its component unit. The effect of interfund activity has been removed frorn these statements during the process of incorporating fund data but interfund services provided and used have not been eliminated, in the process of consolidation. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business - type activities, which rely to a significant extent on fees and charges for support, Likewise, tile primary government is reported separately frown certain legally separate component units for which the prialary government is financially accountable. The statement of"activities dernonstrates tile degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segrnent. Program revenues include (a) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and (b) grants and contributions that are restricted, to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not included among program revenues are reported instead as general revenues. COUNTY OF HAWAII Notes to the Basic Financial Statements Separate financial statements are provided for governmental funds, proprietary ftinds, and fiduciary funds, even though the latter are excluded from the government -wide financial staternents. Major individual governmental funds and major individual enterprise funds are reported as separate columns inthe fund financial statements. Activities infiinds — The financial transactions ofthe County are recorded in individual, funds. Each fund is accounted for by providing a separate set of self -balancing accounts that comprises its assets, deferred outflows of resources, liabilities, deferred inflows of resources, reserves, fund equity, revenues and expenditures/expenses. I 'he various funds are reported by generic classification within the financial statements. GASB Statement No. 34, Basle Financial Stalements and Alfanagement's Discussion an(I Anttdvsis fir a.' Iateand Local Governmews, sets forth rninimurn criteria (percentage of the assets, deferred outflows of resources, liabilities, deferred inflows of resources, revenues or expend itures/expe n ses of either fund category or the governmental and enterprise combined) for the determination of major funds. The nonmajor funds are cornbined in a column in the fund financial statements and detailed in the combining section. The County reports the following major governmental funds: General Fund— The general, fund is the general operating fund of the County. It is used to account for, all activities of the general government, except those required, to be accounted for in other funds. Cal)ilal Projects Fund — Used to account for the costs of constructing County capital improvements financed with general obligation bond proceeds, federal and state grants, and general and special revenue fund revenues. The capital projects fund is used to account for financial resources to be used for the acquisition or construction of major general government capital facilities and infrastructure (other than those financed by proprietary funds and trust funds) when separate prqject centers are needed to control costs. The County reports the following major proprietary fun&. Kula'iniano Dtlerly floitsing Project — Used to account for the operation of a rental housing project for low-income senior citizens located north of Hilo. Ouli EAahi Affordahle Housing, Project — Used to account for the operation of a 33 -unit single-family affordable rental housing project located in Waimea. COUNTY OF'HAWAI'l Notes to the Basic Financial Statements 9MERMIM The County reports the following fiduciary funds: Privale-Purl)ose Trust Funds — Used to account for fiends received from geothermal developers to mitigate the effects of geothermal energy development. Also used to account for investment income on funds received from import businesses at the port of Hilo and the related expenditures to promote health and safety on the Island of Hawai'i. Agency Fistittv — Used to account for assets held by the County for other governmental units and individuals. The agency funds are custodial in nature and do not involve rneasureinent of results of operations. "I'lle County has the following agency funds: • State Weight Tax Fund • Improvement District No. 18 Fund • I in prove tnent District No. 19 Fund • Improvement District No. 20 Fund • Improvement District Revolving Fund • Performance and Refundable Deposits Fund • Payroll Clearance Fund • Flexible Spending Account • Lapsed Warrants Fund • Non -Profit License Plates Fund • Organ and Tissue Education Fund • Business Improvement District I-Kailua Basis of Accounting Basis of accounting refers to the period in which revenues and expenditures (or expenses) are recognized in the accounts and reported in the basic financial statements. Basis of accounting relates to the tinning of the measurements Made, regardless of the measurement focus applied. The government -wide financial statements and the proprietary, fiduciary and component unit fund financial statements are presented on an accrual basis of accounting. The governmental funds in the fund Financial statements are presented! on a modified accrual basis. Accrual Basis - Revenues are recognized when earned and expenses are recognized when the related obligation is incurred, Moil�fietlAccrualBasis - Revenues are recorded when susceptible to accrual (that is, both measurable and available). "Measurable" rneans the amounts are determinable. "Available" means the amounts are collectible within the current period or soon enough thereafter (one year for intergoverninental revenues) to be used to pay liabilities of the current period, COUNTY OF HAWAN MIMI= Licenses and permits, charges for current services, fines and forfeitures, penalties and miscellaneous revenues are recorded as revenues when received in cash because they are generally not measurable until actually received, Real property taxes and State Revolving Fund loan proceeds are considered available when collected. In applying the susceptible to accrual concept to intergovernmental revenues,, the legal and contractual req ' uirem!ents 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 expendlitu,res recorded. Most construction grants and many operating grants fall into this category. In the other, monies are virtually unrestricted as to purpose of expenditure and are usually revocable only for failure to comply with prescribed compliance requirements, These resources are reflected as revenues at the tirne of receipt or earlier ifthe susceptible to accrual criteria are met. The County reports deferred inflow of resources in its fund financial statements (see Note 7). Deferred inflows of resources arise when potential revenue does not meet both the "measurable" and "available"' criteria for recognition in tile current period. In subsequent periods, when both revenue recognition criteria are met, the deferred inflow is removed from the fund financial statements and revenue is recognized. Expenditures are recognized under the modified accrual basis of accounting in the accounting period in which the fund liability is incurred. Exceptions to this general rule include: (a) accumulated compensated absences and claims and j udgments which are recognized as expenditures when paid; (b) liabilities related to municipal solid waste landfill Closure and postclosure care costs; (c) principal and interest on general long-term debt which are recognized as expenditures when due; and (d) liabilities relating to Pollution rernediation . The County applies all applicable GASB pronouncements, including the adoption, of GASB Statement No, 62, Coefijicalion qfAccounting anel Financial Rel)orflng Guiclance ("wWdHe'd ire Pre-Novemher,30, 1989,F"ASB(P'itiaiicialAccotii7li?ig"�ta?idai-d,.s"Boai,-d)cared AICI'A (A merican Insfinae of Cerfed Pithlic Accounfonf.�) Pronouncemen1s. I X TI= "I I The general, special revenue, and capital projects funds follow encumbrance accounting under which purchase orders, contracts and other commitMents are recorded as an obligation of fund. balance and provide authority for the carryover of appropriations to tile Subsequent year in order to complete these transactions. Encumbrances outstanding at year-end are included in the respective fund balance categories as appropriate and do not constitute expenditures or liabilities because the commitments will be honored during the subsequent year. COLJNI'Y OF I,IAWAIl Notes to the Basic Financial Statements June 30, 2019 Cash and Investments Cash and cash equivalents include cash oil hand, amounts in demand deposits and savings accounts, and short-term investments with a maturity date of three months or less from the date acquired by tile County. Investments consist of certificates of deposit, repurchase agreements, and securities with original maturities exceeding three months. These include participating investment contracts (U,S. government sponsored agency issues and negotiable certificates of deposit) as well as nonparticipating investinent contracts (tirne certificates of deposit and repurchase agreements). Bothcategories of investments are stated at fair value (see Note 3). Valuations of investments in government sponsored enterprises such as Federal National Mortgage Association (Fannie Mae) and Federal Hanle Loan Mortgage Corporation (Freddie Mac) are based oil quoted market rates. Investments also consist of equity securities in the fiduciary fund financial statements. "I"hese investments are stated at fair value based on closing quoted prices. Real Property Taxes The County's real property taxes are levied, on July I each year on assessed valuation, as of January 1. 'File taxes becorne a lien on the property assessed as of the levy date. 'Taxes are due and payable in two equal annual installments on August 20 and February 20. Accordingly, real property taxes receivable as of June 30 are delinquent. Each delinquent installment bears interest at I% per month and penalties of up to 10% of the amount due. Assessments are based on 100% of estimated fair market values prior to the application of exemptions or preferential assessments. The COLItIty provides real property tax abatement under five programs Enterprise Zone, Historic Residential Dedication, Low and Moderate Income Housing, Agricultural Use Programs, and Solar Water Heater Credit: Enterprise Zone Exemption - Section 19-893 of tile Hawaii County Code provides buildings or other like structures, which are built as a result of new construction by a qualified business within an enterprise zone to be exempt except for the minimum tax from real property taxes for a period of three years. 1"he purpose of this program is to stimulate business and industrial growth. A qualified business in an enterprise zone must satisfy the requirements of Chapter 31 of the Hawaii, County Code and section 208E, Hawaii Revised Statutes. Historic Residential Dedication Exemplion Section 19-89.1 of the Hawaii County Code and Rule 36 ofthe Rules and Regulations of tile Director of Finance provides an exemption to encourage the preservation of residential structures that have been placed oil the Hawaii Register of Historic Places after January 1, 1977. "The property owner must provide visual access on a year-round basis or open the property to the public for twelve days per year. The owner certifies the current level of taxation is a material factor which threatens tile continued existence of tile historic statLIS. This dedication is for a minimum period of ten years, I ROTMINVULIMM711 M, June 30, 20 19 automatically renewable indefinitely. Cancellation ofthe dedication by either the owner or the Director of Finance may only be made upon five years' written advance notice and no earlier than the end of the fifth tax year. Any person who becomes an owner ofthe dedicated real property shall be subject to the restrictions and retroactive tax assessment provisions. If the dedication is, approved, the exemption based upon the dedication shall be effective July I of the tax year following the approval of the dedication. The dedicated exempt property or portion of the property approved shall be subject to the minimum tax provisions of Section 19- 90(c) of the Hawai'i County Code. If there is a breach in the agreement, the property would be subject to roll back taxes, including penalty and interest. Low andHotlerate-Income Housing E.remplion — Section 19-87 of the 1- lawai'i County Code and: Rule 37 of the Rules and Regulations of the Director of Finance provides an exemption for a housing protect which is owned and operated by a nonprofit or limited distribution mortgagor or by a qualified, entity froill taxation. Must participate in long-term housing prcject that have regulatory agreements mandating rent levels, occupancy of the project is limited to the elderly, handicapped, low or moderate incorne families. Applicants must submit an application form along with a copy of tile recorded regulatory agreement. The exemption is equal to 100% ofthe assessed value for the portion of the real property that is dedicated as low- and mode rate- i ncorne rentals. If the entire property is dedicated, then the net taxable is zero but the property is still subject to the minimum tax per Section 19-90(c) of the I'lawaN County Code. 'T'he exemption shall continue so long as the rental housing project is owned and operated by a nonprofit or limited mortgagor. If tile rental units do not comply with the regulatory conditions, the property would be subJect to roll back taxes, including penalty and interest. Non De(fietiled Agricuftiiral Use Assessment Section 19-57 of the Flawai'i County Code and Rule 34 of the Rules and Regulations of the Director of Finance reduces assessments to encourage local agricultural production as well as the preservation of agricultural lands that could otherwise be further developed, by valuing these lands at the at two times the dedicate agricultural use value as opposed to the market value. Unlike the Dedicated Agricultural Use program, the zoning for this program must be agricultural. Ail application forili must be filed along with a plot plan and provide details as to what agricultural activities is conducted oil the property. Upon review and approval, the application is effective as of January I for tile following tax year. Renewal of the application shall be in such form and at such, tine as requested by the director. Valuation consideration is given to the type of agrictlItUral activity, Any breach to the terrors of would result in an immediate rol,lback calculation of current plus two yeas taxes plus penalties and interest. ConnnerciolAgricOur(il Use Detfication -- Section 19-60 of the I-lawaii County Code and Rule 3 1 ofthe Rules and Regulations of tile Director of Finance provides reduced assessments to encourage local agricultural production as well as the preservation of agricultural lands that Could otherwise be further developed, by valuing the dedicated lands at the agricultural use value as opposed to the market value. An application form must be filed along with a plot plan and provide details as to what agricultural activities is conducted, on the property, Upon 14 . MAINK41mumma M M11"M771 ml June 30, 2019 review and approval,, the owner is required to record the dedication at the Bureau of Conveyances, There is currently only one available dedication length which is a 10 year period, however, previously there was a 20 year dedication. This dedication does not autoniaticafly renew. Valuation consideration is given to the type of agricultural activity.. Any breach to the terrors of the recorded dedication would result in the cancellation of the dedication, or portion thereof, and the immediate rollback calculation of taxes plus penalties and interest. Solar, Water Healer Credit- Section 19-104 of the Hawaii County Code provides a one time tax credit per tax wrap key for up to, $300 for the owner of real property who installs a solar water heater on the owner's property on or after January 1, 200 . This program was created with the purpose ot,'providing an incentive to �support renewable energy, The owner must apply for the credit. Information relevant to the disclosure of these programs for the fiscal year ended June 30, 2019 is as follows., Tax Ab,atemen,t Program Enterprise Zone Historic Residential Dedication Low and Moderate Income I 10LISing Agricultural Use Programs Solar Water Heater Credit Ammount of Taxes Abated - as defined by GASB 77 $1,240,75 2.19, 6530 $698,031. 6 $30,370,07418 25,1'211.77 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 HawaN Revised Statutes requires that liquor license revenues collected be used only For costs and expenses directly relating to operatiional and adin i n istrati ve costs, actually incurred by the liquor cornmission Collecting SLICh fees. The unexpended fees at June 30, 2019 of $7'99,769 are reflected as a restriction of general fund balance, COUNTY OF HAWAII Notes to the Basic Financial Statements MUMM3= Capital assets, which include property, plant, equipment, and, infrastructure assets (e,g,, roads,, bridges, curbs and gutters, streets and sidewalks, drainage systems, lighting systems, and similar items), are reported in tile applicable governmental or business -type activities columns in the government -wide financial statements. Capital assets are defined by tile County as assets with an initial, individual cost of more than $1, 00 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value if available or if not, at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of tile asset or materially extend the life of tile asset are not capitalized. Major outlays for capital assets and improvements are capitalized as prqjects are constructed. Interest incurred during the construction phase of capital assets of business -type activities is included as part of the capitalized value of tile assets constructed. Capital assets of the primary government and enterprise fund are depreciated using the straight-line rnethod over the following estimated useful lives of the assets: Assets Infrastructure Buildings and improvements Ground and site irnprovements Equipment Easements Years 20 to 100 years 50 to 100 years 20 to 50 years 5 to 40 years Dependent on terms ofeasement agreement Deferred Outflows of Resources and, Deferred Inflows of Resources Deferred outflows of resources represent a consumption of net position that applies to a future period and will not be recognized as an outflow of resources (expense or expenditure) until that time. The County has three iterns that qualifies for reporting in this category. The County reports the deferred loss on refunding and deferred outflow related to both pensions and other postemployment benefits ((JPEB) as a deferred outflow of resources, in its statement of net position, Deferred inflows of resources represent an acquisition of net position that applies to a future period and will not be recognized, as an inflow of resources (revenue) until that time. Property taxes, fecs, and other non-exchange transactions received i,n the current fiscal year for the ensuing fiscal year are reported as deferred inflows of resources. These amounts are deferred and recognized as ari inflow of resources in the period that the amounts become available, Tile County also reports deferred inflows of resources related to both pensions and other postemployrnent benefits (OPEB), COUNTY OF HAWAPI Notes to the Basic Financial Statements ammam1mr, Long-term Obligations The County reports long-terin debt of governmental funds at face Value on the government - wide statement of net position. Certain other governmental fund obligations not expected to be financed With Current available resources are also reported on the government -wide statement ofnet position , Long-term debt and otherobligations financed by the proprietary funds are reported as liabilities in those funds. Compensated, Absences Employees earn vacation credit at the rate of one and three-quarter working days for each month of service. Up to ninety days of vacation leave credits call 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 employmcnt. A liability for these amounts is reported in the governmental funds only if they have matured, for example, as a result of employee resignations and retirements. All vacation and compensatory time off pay is accrued in the government -wide statement of net position along with the estimated liability for social security and Medicare taxes and employers' retirement contributions on those arnounts. Sick leave accumulates without limit. Sick leave can be taken only in the event of illness and is not convertible to pay upon termination of employment; therefore there is no related liability, However, a County employee who retires or leaves government service in good standing with 60 days or more of unused sick leave is entitled to additional service credit in the Employees' Retirement System of the State of Hawaii. Accumulated sick leave at June 30, 2019 totaled $77,168,000 for the primary government. Leases transferring substantially all of the risks and benefits of ownership are recorded as capital leases; other leases are operating leases (see Note 8). Capital leases are recorded: as capital asset additions at their estimated fair value at the inception of the lease and the related present value of the future rninirnuin lease obligations is recorded as long-term debt. Operating lease expenditures and expenses are recognised when the lease obligation is paid. F'or purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Employees' Retirement System of the State of I-Jawai'i (ERS) arid M CO U11TY 0 F H A IVA I'l 9MMMMMM additions to and deductions From FRS's Fiduciary net position have been determined oil the same basis as they are reported, by ERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Other Postemployment Benefits (OPEB) For the purposes of measuring the net OPEB liability, deferred outflows or resources and deferred inflows ofresources related to OPEB, and OPEB expense, information about the fidLICiary net position of the Hawaii Ernp layer- U n ion Health Benefits Trust Fund ("EUTP) and additions to/deductions from EUTF's fiduciary net position have been determined on the same basis as they are reported for EUTF. ["or this purpose, EUTF recognizes benefit payments when due and payable in accordance with the benefit teras. Investments are reported, at fair value, except for investments in commingled and money market funds, which are reported at net asset value (NAV). 1"he NAV is based on the fair value of the underlying assets held by the respective fund less its liabilities, Operating Revenues and Expenses Revenues and expenses are distinguished between operating and nolloperating items for the proprietary funds, Operating revenues generally result from, providing services in connection with the proprietary funds' principal ongoing operations. The principal operating revenues of the proprietary funds are fees charged to residents for rent arid rental subsidies received fro, in the federal government. Operating expenses include the costs associated with providing housing for tenants, such as utilities, lease rent, and maintenance and repairs; administrative expenses; and depreciation on capital assets. All revenues and expenses not meeting these definitions are reported as nonoperating revenues and expenses. Use of Estimates The preparation, of file basic financial statements in, accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, deferred outflows of" resources, liabilities, and deferred inflows of resources, as well as disclosure of contingent assets and liabilities at the date of the Financial :statements, and the reported amounts of revenues, expenditures, and other financing sources and uses during the reporting period. Actual results could differ from those estimates. Fund Balances When both restricted and unrestricted fund balances are available for use, it is the County's policy to use restricted fund balance first, then unrestricted fund balance. Furthermore, committed fund balances are reduced first, Followed by assigned amounts, and then COUNTY OF HAWAII Notes to the Basic Financial Statements J tine 30,2019 UllaSSigned arnounts when expenditures are incurred for purposes for which arriounts in any of those unrestricted fund balance classifications can be used. The County reports the following classifications: Nonspendable Fund Balance — Nonspendable fund balances are amounts that cannot be spent because they are either not in spendable form, or, for legal or contractual reasons, must be kept intact. The County has inventory included in their rionspendable fund balance. Restricted Fund Balance -- Constraints placed on the use of these resources are either externally imposed by creditors (such as through debt covenants), grantors, contributors or other governments or are imposed by law (under the I lawai:i Revised Statutes or County ofHawai'i Charter). Committed Fund Balance Committed Fund Balances are amounts that can only be used for specific purposes as a result of constraints imposed by the County Council via ordinances and the County Code and can only be undone via the care manner. The committed fund balance of the General Fund includes the portion of fund balance committed to budget stabilization. Tile budget stabilization portion is authorized under County Code §2-2 19 to §2-223 and additions are made via the County budget or subsequent budget amendments. The fund: balance rinay only be used when, there is a reduction in budgeted revenue and the director of finance determines that such use is necessary to prevent a reduction in the level of public services. Assigned Fund Balance . Assigned fund balances ar•e amounts that are constrained by the County's intent as determined by the Mayor but are neither restricted nor committed. The County's only assigned fund balances are in the General Fund and Capital Projects Fund and the majority consists of the portion of fund balance that is intended to balance the subsequent year's budget, which is conveyed by the Mayor via his approval of allotment requests and his approval of the current year's fund balance amount to, be included in the submittal for next years annual budget ordinance, Unassigned Fund Balance — This is the residual classification of tile General Fund. "File General Fund is the only furld that could potentially report a positive unassigned fund balance. The category of Other for the Restricted, Cornrn itted and Assigned fund balances oil the Governmental Funds Balance Sheet include funds restricted for the purposes of housing and rental assistance; parks and recreation projects; general and public safety facilities; liquor control; taxicab investigations; special duty officers and sewer loan prograrns. C01,JNTY OF HAWAVI Notes to the Bas,ic Financial Statements I When both restricted and unrestricted net position are available for use, it is the County's policy to use restricted net position first, and then unrestricted net position. New Accounting Pronouncernents In November 2016, GASB issued Statement No. 83,Cei�tain Asset Relbemenl Obligtitions. This Statement addresses accounting and Financial reporting for certain asset retirement obligations ("AROs"). An ARO is a legally enforceable liability associated with the retirement of a tangible capital asset. A government that has legal obligations to perforin future asset retirement activities related to its tangible capital assets should recognize a liability based on the guidance in this Statement. The requirements of this Statement are effective for reporting periods beginning after June 15, 2018. Management has determined that this Statement does not have a material impact on the County's financial statements. In January 20117, GASB issued Statement No. 84, FiduciaiyActivilies- Tile principal objective of this Stateinent is to enhance the consistency and comparability fiduciary activity reporting by state and local governments, The requirements of this Statement are effective for reporting periods beginning after December 15, 2018. The County has not yet deten-nined the effect this Statement will have on its financial statements. In June 2017, GAS13 issued Statement No. 87, Leases. The objective of this Statement is to better, meet the information needs of financial statement users by improving accounting and Financial reporting for leases by governments. The requirements of this Statement are effective for reporting periods beginning after December 15, 2019. The County has not yet determined the effect this Statement will have on its financial statements. In: Mat -ell 2018, GAS13 issued Statement No. 88, Cei-lefin Disclosui-es Relaleti to Debt, including Liar-ecl Bori-owings and Dii-ect Placenients. 'file objective of this Statement is, to improve the information that is disclosed in notes to government financial statements, related to debt, including direct borrowings and direct placements. The requirements of this Statement are effective for reporting periods beginning after June. 15, 2018. Tile County implemented these requirements for the fiscal year ended .lune 3 0, 20 19. In June 2018, GASB issued Statement No. 89, Accounlingfiw hite?-esl Cosl brew -t -ed Befio 1,e the EndofaConsliwelion Pei -acre/. The o%jectives of this Statement are (1) to enhance the relevance and comparability of information about capital assets and the cost of borrowing for a reporting period and (2) to simplify accounting for interest cost incurred before the end of a construction period. The requirements of this Statement are effective 'for reporting periods, beginning after Decennber 15, 2019. 'File County has not yet determined the effect this Statement will have on its financial statements. C Notes to the Basic Financial Statements In August 20 18, GAS' 13 issued Statement No. 90, Mc#orily Equity hnei-esls-An Amendment of GASB SIateinews No. 14 and No. 61. The objectives of this Statement are to improve the consistency and comparability of reporting a government's majority equity interest in a legally separate organization and to improve the relevance of financial statement information for certain component units. Tile requirements of this Statement are effective for reporting periods beginning after 1.)eceinber 15, 201 . 'File County has not yet determined the effect this Statement will have oil its financial staternents. In May 2019, GAS13 issued Statement lo.' 1, Condidt Debt Obligations, The objectives of this Statement are to provide a single method of reporting conduit debt obligations by issuers. The requ irernents of' this Statement are effective for reporting periods beginning after December 15,2020� The County has not yet determined the effect this Statement will have oil its financial statements. 2. STEWARDSHIP, COMPLIANCE ANDACCOUNTABILITY Annual Budget 11le County follows these procedures in establishing its operating and capital budgets: • On or before Marcll 1, tile Mayor submits to the County Council proposed operating and capital prqlects budgets for the Fiscal year commencing the following July 1. Tile operating budget includes proposed expenditures for the general fund and special revenue funds, and the means of financing them. A project -length budget is submitted to tile County Council for the capital proJects fund. • 1 -he Mayor submits to the County Council amendments to tile proposed operating and capital budgets within ten working days after the close of the state legislature, but not later than May 5. • The County Council conducts public hearings oil the proposed operating and capital budgets after March I but prior to the first reading oil the budget bills, which must be after May 5. • On or before June 30, the County Council adopts the budgets, The legal level of budgetary control is the department level because the Mayor can transfer funds frown any unencumbered appropriation to another within a department or agency without County Council approval. During the year, the budget may be amended by action of the County Council, except for appropriations required by law and appropriations for debt service, which may not be decreased or deleted. Supplemental appropriations were made during the 2016-2017 fiscal year to recognize revenue frorn sources not anticipated at tile, tirne of the original budget and to establish the authorization for such funds to be expended. Such supplemental appropriations totaled $7.7 million in the general fund and $3.3 million in the special revenue funds. I.,egally adopted budgets include the General Fund, Xr 01801111MINIMMM Highway Fund, Sewer fund,, Solid Waste Fund, Cemetery Fund, Parking Meter Fund, Vehicle Disposal Fund, Bikeway Fund, Workforce Investment Act Fund, Golf Course Fund, Geothermal Relocation and Community Benefits Fund, Beautification Fund, Hawai'i County Housing Agency Fund, Park Dedication Fund, General Excise'Fax Fund, and Short -Terry Vacation Rental Enforcement Fund. Appropriations for the operating budget lapse at the end of the fiscal year to the extent that they have not been expended or encumbered. Appropriations for capital expenditures that are not encumbered lapse at the end, of two fiscal years following the Fiscal year that the appropriation was inade. Formal budgetary integration is employed as a managernent control device during the year for the General Fund, special revenue funds, and Capital Projects Fund. Formal budgetary integration is not employed for debt service funds because effective budgetary control is alternatively achieved through general obligation bond indenture provisions. The accompanying statement of revenues, expenditures and changes in fund balances budget and actual (budgetary basis) for the General Fund presents a comparison of tile legally adopted budget with actual data on a budgetary basis. Accounting principles applied for purposes of developing data on a budgetary basis differ significantly frorn those used to present financial statements in conformity with GAAP. On the budgetary basis, intergovernmental revenues are recognized when awarded by the granting agency, encumbrances and unexpended allotments are treated as expenditures, accounts payable are not accrued, and all, leases are treated as operating leases. In preparing the financial statements on a GAAP basis, accounts payable are accrued and treated as a reduction of encumbrances for balance sheet presentation. Budget to GAAP Reconciliation The following i;s a summary of the ad.justments necessary to convert Fund balances of the County's General Fund frown a GAAP basis to a budgetary basis at June 30, 2019: Ending fund balance GAAP basis $76�, 188,742 Encumbrance adjustments: Beginning encumbrances and unexpended allotments 1,915,855 Ending encumbrances and unexpended allotments (1,156,030) Other adjustments ....._(9,78 602]l , A�,_ Ending fund balance Non -GAAP budgetary basis $67,169,965 KINNUMMIMUNIMIM OMFUTT41W2 The Director of I-inance is responsible for the safekeeping of all monies paid to the County. ,file Director ofFinance invests any monies of the County which in the Director'sJudgment are in excess of tile amounts necessary for meeting the day-to-day operating needs of the COUNTY OF HAWAI'I of to the Basic Financial Statements June 30,2019 County. Under Section 46-50 of the Hawai'i, Revised Statutes, legally authorized investments include obligations of or guaranteed by the U.S, governinent, obligations of the State, federally insured savings and checking accounts, time certificates of deposit, and repurchase agreements with federally insured financial institutions. RM The County maintains a 11LIMber of checking and savings accounts for various funds and with various financial institutions. Bank deposits are under tile custody of the Director of Finance. For financial statement reporting purposes, cash and short-term investments consist of cash and money market accounts. Cash and short-term investments also include repurchase agreements, certificates of deposit, and government sponsored securities with original niaturities of three months or less, The carrying amount of tile County's deposits (cash, time certificates of deposit, and, money market accounts) as of'June 30, 2019 was $243,317,332 for tile primary government and $5,8033,08,6 For the fiduciary funds. Information relating to bank balance, insurance and collateral of cash deposits is determined on a county -wide basis. Total bank balances of deposits for the primary government and fiduciary funds amounted to $257,028,236 at June 30, 2019. Of that amount, $255,767,477 represents bank balances covered by federal deposit insurance or by collateral held by the County's fiscal agents in the name of the County. The remaining bank balances of $ 1,260,759 represent deposits held by a management agent and were uncol lateral ized . Accordingly, these deposits were exposed to custodial credit risk. Custodial credit risk is the risk that in the event ofa bank failure, the County's deposits may not be returned to it. For checking and savings accounts, tin'ie certificates of deposit, and repurchase agreements, the County requires, in accordance with State statutes, that the depository banks pledge collateral based orl tile available bank balances for the protection o,f tile funds deposited. All securities pledged as collateral are held by the County's fiscal agents in the name of the County. 'The County also requires that no more than 60% of the County's total funds available for deposit may be deposited in any one financial institution, in accordance with State statutes. 9MMMIMM, 3" he County holds investments both for its own benefit and oil behalf'of some of the fiduciary funds. The County's investments offunds not required for immediate payments are predominately comprised of'government sponsored securities (equivalent to the rating, in U& Treasuries), repurchase agreements and certificates of deposit, while the Fiduciary funds also hold, equity securities. COUNTY OF HAWAN June 30,, 2019 The frainework for measuiliig fair value provides a fair value hierarchy that prioritizes the inputs to valuation teelmiques used to measure fair vaWe. The hierarchy gives the highest priority to unad.justed quoted prices iri active markets for identical assets or liabilities (level 1) and the lowest priority to unobservable illpUtS (level 3), The three levels of the fair value hierarchy are described as follows: Level I .- hiputs are qUoted prices (unadjusted) iri active markets for ideiltical assets or liabilities that a government can access at the measuremeilt date. Ail active market is a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 — Inputs other than quoted prices included within level I that are observable f6r ail asset or liability, either directly or indirectly. If tile asset or liability has a specified (contractual) term, a level 2 input must be observable for most of the ful I term of the asset or liability, Level 2 inputs include: Quoted prices for similar assets or liabilities in active markets, Quoted prices for identical assets or liabilities ill markets that are not active, Inputs other thaii quoted prices that are observable for the asset or liability, hiputs that are derived priiicipally from or corroborated by observable market data by correlation or other mems. Level 3 --.- hiputs are unobservable for all asset or liability. Following is a description of tile valuation tectmiques, used by the County to rueaSUre fair value: Government sponsored securities of $27,002,280 and certificates, of deposits of $41,296,655-. Valued: using quoted prices for idcmical or sunflar assets hi markets, that are not active (Level 2). Equity securities of $ 1,708,073: Valued using quoted prices ill active markets for identical assets or liabilities that a government casae access at the MMU rein erl t date (Level I ). COUNTY OF HAWAVI June 30, 2019 The County's investments and niaturifics at June 30,2019 are as follows., Investments , Primary Governtnent. Certificates ol"deposit Government sponsored securities Investnients - Private -Purpose "Frests: Government sponsored securifies, Equity securities Investnients - Agency Funds: Certificates of deposit Gjovernn�icnt sponsored securities Maturity_(in ars yg Eair-Yalue Less than I 1 --5. $ 40,821,595 $ 33,137,273 $ 7,684,322 --.24,914,794�2 9�87 $ 65,7361389 $ 36,124,893 $29,611,11,496 $ 1,917„53 7 $ -- $ 1,917,537 7P&Q7 )�8 Q3 -j� .3,625, 101 -$--L 708 Ol73 $ 1,9_17,y37 $ 475,060 $ 225,000 $ 250,060 . . ............. I.M.,249 ...... 16... -9,949 . - —1 - $ 645.011,09 $ �25,00() $ 420l,009 Intei-est Rate Risk: The County minimizes its exposure to interest rate risk by limiting the maturities of investments to five years or less in cornpliance with state statute, 'The County*s policy is to hold investirients until maturity and doles not engage in trading for capital gains. 0eclit Risk: The County's investment portfolio primarily consists of” U.S. government or agency obligations, bonds of government sponsored enterprises, time certificates of deposit and repurchase agreements, These investments are either insured by the FDIC, secured by collateral or carry a credit rating equilvalent to U.S. Treasuries. Custochal Risk: Custodial risk is the risk of loss from the failure of the counterparty, whicl'i is defined as any entity that obtained an investment on behalf of the County. All of the County's deposits including repurchase agreements arc secured by collateral which is kept by a third Darty custodian. Broker-dealers Utilized by the County are members of the Securities Investor Protection Corporation, and all investment securities, are held in the Courity's name, (",'oncenowtion q1"Ci-eiiii Risk: State law limits deposits to no more than 60% of the total in any one depository, The County seeks to further diversify its portfolio by purchasing From different issuers, by purchasing diff&ent types of investments and by purchasing investments at different maturities. The County also purchases its investments, frorn a nurnber of banks and broker-dealers both located locally and on the mainland. As of June 3�01, 2019, investments were distributed as follows: FTN Financial, 3.2%,, Multi Bank Securities, 11 3%, First Hawaiian Bank, 17',9%,; Raymond James, 3.21/1o; Stifel Nicollaus & Company, 3,5%,- Bank of Hawaii, 20.7%; 'rerritorial Savings 17,4%; US Bank, 6.3% and Central Pacific Bank, 16 5%. COI.JNTY OF FIAWAVI TUMMIM. "UT MI, June 301, 2011,9 Restricted Cash and Cash Equivalents and Investments Cash and cash equivalents and investments classified as restricted assets for the primary government at June 30, 2019 amounted to $154,564,494, Construction related contributions restricted to various capital improvenient projects and fuel tax funds received are recorded as restricted assets in the Capital Projects Fund. Such funds totaled $78,305,698 at June 30, 2019 Cash and investments in the Bond Redemption Fund and the Interest Fund are restricted to debt service related payments and amounted to $33,451,486. Cash in the Highway Fund, Bikeway Fund, General Excise Tax and Beautification Fund are restricted to costs incurred relating to highways and streets and the beautification of such items and amounted to $14,227,0 15. Cash in the Hawaii County Housing Agency and Short-term Vacation Rental Enforcement Fund classified as restricted to provide public housing assistance and, housing rules enforcement arnounted to $ 1,833,970 "Fhe restricted, cash and investments in the General Fund was carnprised of cash restricted to Costs incurred to administer the liquor commission and cash restricted, to the acquisition and maintenance of lands or property entitlements for public outdoor recreation and education. Such arnounts totaled $799,769 and $25,831,368, respectively. Tenant security deposits received by the County for the Kulaimano Elderly I lousing Project and the Ouli Ekahi Affordable Housing Project are recorded as restricted assets. Such funds amounted to $ 13,015 and $29,499, respectively, at June 30,, 20 19. An operating reserve fund was established by the Ouli Ekahi Affordable Housing Project pursuant to an agreeinent with the I lawai'i Housing Finance and Development Corporation, who are the holders of the project's, note. This restricted reserve amounted to $,72,674 at June 30, 2019. COUNTY OF HAWAII Notes to the Basic Financial Statements Receivables, as of June 30, 2019, for the County's individual major funds and other funds in the aggregate, including the applicable allowances for uncollectible accounts, are as follows, Governmental activities: Real property taxes Accounts, receivable: Sewer Solid waste Intergovernmental Gross receivables Lessallowance for uncollectibles Net total receivables Capital General Projects Fund Fund $30,604,70,7 $ 53,068,265 7,913,199 _(A&24 S48 S-7 1, —12"'Lt L4 Other Governt-nental Funds Total $ $30,604,707 2,307,228 2,307,228 1,632,145 1,632,145 A4-!JQ4!9 AIQ1M � 17,582,413 78,563,877' _L7 5 5�217) 2_9 82�t $ZL"M 02 During fiscal year 2005, flue County issued $3,887,493 in general obligation bonds on behalf of Improvement. District No, 18, an agency fund. On February 12, 2013 bonds, were issued to reftind, the outstanding principal balance of $1,345,945 forthe Improvenwrit District. During fiscal year 2014 and: 2015, the County also issued $448,669 and $720,331, respectively, in general obligation bonds on behalf of Improvement District No, 19, an agency fund. At JLHIC 30, 2019, the outstanding balance for both Irnprovernent Districts ol'$1,994,867 is refected in the government -wide statement of net position as, a receivable (see Note I . Business -type activities., -67- Enterprise Funds Accounts receivable: Rem $19,332 Other Gross receivables 20,39 Less: allowance for uncollectibles LL4,2171 Net total receivables $ 6.154 -67- M81811911WROYMMIM Notes to the Basic Financial Statements June 30, 2019 5. INTERFUND REICEIVABLES AND PAYABLES Interfund receivables and payables consist of the following at June 30, 2019: R.e..c.eiyahle I.,'.u-n.d General fund Capital, projects fund Other governmental funds "I"otal Other governmental funds EMbIg Fund Amount Capital projects fund 444,296 Other governmental funds 2,1,82,337 2,626,633 General fund 50,622 Other governmental funds5!) .�I_ _&U 2,710,225 General, fund 51, 7,'278 Other governmental funds 1.2.8..5j] —A-5- IS'Ll) � $ 5,9,9-2,6 9,9-2,653 Enterprise funds S,3,500 The above interfund balances result from the time tag between the dates that interfund goods and services are provided or reimbursable expenditures occur, transactions, are recorded, and payment between funds are made. Transfers for the fiscal year ended June 30, 2019 consisted of the following: Transfers out: Capital General Projects Fund Fund .. ............ . .. Transfers in: Capital Projects Fund $ 2,000 Other governmental funds 69,615,.390 $69,617,396 -------------------------------------- Other (3overnmental Funds Total $7,623,045 $ 7,625,045 $7,623 Q4 1 , , -5 $77,240: 4t 11, The interfund transfers noted above include transfers from the General Fund to provide support for various County programs and to provide resources for the Payment of debt services. In addition, some of the other governmental funds have made transfers to the capital projects fund for the construction of various projects, WIMYNKOMMILmul T T m W ". M Mr, m June 30, 2019 6. CAPITAL, ASSETS Capital asset activity for the year ended June 30, 2019 for the County was as follows: Balance Balance July 1, Retirements/ June 30, 2&1-8. AdJjIiQDs Imnsfe.rs2019 Governmental activities: Capital assets not being depreciated: Land and improvements 256,390,951 Easements 6,151,809 ConstrUCti011 work in progress 50,591,695 "T natal capital assets not being depreciated 313,134,455 Capital assets being depreciated: Buildings and improvements 759,868,720 EqUipfTICIlt 159,929,306 Easements 456,497 1 n frastruct tire624 1�9 . . . ....... .... Total capital assets being depreciated I Less accumulated depreciation for: Buildings and improvements (128,140,907) Equipment (101,0 10,508) Easements (439,300) Infrastructure (315,608,434) Total accumulated depreciation (545,199,149) Total capital assets being depreciated, net 9x)9,959,6.35 $ 7,079,367 $ $ 263,470,3 18 81,072 6,23:2,881 .—E.201.6.12 58A55,8,1_1 44,424,051 (29,399,496) 328159,0 l 0 8,940,248 (10,0()0) 768,798,968 10,255,404 (5,609,572) 1 4,575,138 456,497 -------------------- ----- L)QJ�45�261 �!?.37 �358 (5,619,5721 1,587,176,57 (12,917,110) 5,621 (141,052,396) (9,210,180) 4,982,653 (105,238,035) -- _® (439,300) (24,858,7764 -- (340,467_21..Q) (46,986,066) 4,988,274 (587,196,941 651,292 (1x31,2984 999,979,629 Governaiental activities capital assets, net $1,3 13,094,090 45,f,,Z-5,111 ($1,0,030,794,) 11,328,1,,3039 COUNTY Of- 'IIAWAVI Notes to the Basic Financial Statements P Balance Retirements/ June 30, Additions Transfers 2019 S 753,877 1,593,187 272,850 _j IM99 16,902 (33,870) 1,985,946 (36,044) Balance (4,347) July 1, 2018 Business -type activities: (1.324.a2) Capital, assets not being depreciated: 611,67 L,and $ _753�877 Capital assets being depreciated: Buildings and improvements 1,,59,1, "7 Ground and site improvements 272,850 Equipment ------ 1.36X8.77 Total capital assets being depreciated 2,002,914 Less accuMUlated depreciation fbr: Buildings and improvements (1,0 18,733) Ground and site improvements (219,304) Equipment Total accumulated Depreciation 1 54.7...481. Total capital assets being depreciated, net ._.64&6�66 Business-type activities capital assets, net $ 1-,4012,5°3 Balance Retirements/ June 30, Additions Transfers 2019 S 753,877 1,593,187 272,850 _j IM99 16,902 (33,870) 1,985,946 (36,044) (1,054,777) (4,347) (223,651) (95,841) (550,030) (1.324.a2) _Q �3, L3 4 ) (3,855 611,67 $.(33,134) $_D_&_55j $1:36 , 5- 5,,4 IM1111 04IM-101,11111113 311,111111110 1 June 30, 2019 Depreciation expense was charged to functions/ progmars of the primary government as follows: Total Governmental activities: Redemption Governmental General government $ 2,779,771 Public safety 4,487,723 Highways and streets 26,661,952 Sanitation 7,321,874 I-lealth, education and welfare 2,216,007 Culture and recreation _311_8 71 Total depreciation expense-- governniental activities $46,986,006 Business -type activities; 56,510 Kula'iniano Elderly Housing Project $34,397 Ouli Ekahi Affordable Housing Project 15,639 Total depreciation expense - business -type activities 3,240,,596 7. DEFERRED INFLOW OF RESOURCES Deferred inflow of resources consists of the following at June 30, 2019: Governmental activities: Real property taxes Liquor control revenue Sewer revenue Housing revenue Solid waste revenue Total presented in fund financial statements Add deferred inflows, of resources related: to, pensions & OPEB Less adjustments for accrual of revenues Total government - wide financial statements Capital Bond Other. Total General Projects Redemption Governmental Governmental Fund fund fund bunds ............. Funds $ 27,663,902 $ $ $ $ 27,663,,902 1,93,894 193,894 1,626,672 1,626,722 56,510 56,510 _J 5.7,1.1,4 1,557,11 27,857,796 3,240,,596 31,098,392 15,043,306 15,043,306 .3,24%59 (1) 9, 1791761) $ 16,970,4935 . .................... $ 16,970,93.5 - 71 - COUNTY OF IIAWAI'I Notes to the Basic Finmicial Statemwits, June 30, 2019 S. LEASES The County leases niachinery and equipment under noncancellable leases expirmg at VaIAOLIS dates through Deceniber 2024. These capital leases are financed frorn the resources of various funds. The estimated value of the leased machinery and eqUipillent at the inception of the capital leases and accumulated depreciation, amounting to $18,276,001 and $2,573,568, respectively, and the related present value of the remaining obligations under the capital leases amounting to $11,579,332 at June: 30, 20l 9 are included in capital assets and long-term debt, respectively, The County also leases land, office facilities and other equipment under noncancellable operating leases, expiring through August 2045. [:spenditUres for such operating leases were $1,997,965 for the fiscal year ended June 30, 2019, The future MirliMLIM payments under capital and operating leases, at Rine 30, 2019 are as follows: -72- Capital Operating LeasesLeases Year Ending, June 30: 2020 $3,641,620 $ 1,349,940 2021 3,311,866 1,238,527 2022 2,480,959 1,147,339 2023 1,95,4,921 478,101 2024 719,071 194,509 2025-2029 117,129 200,072 2030 -2034 — 2,166 2035 - 2039 900 2040 - 2044 N 900 2,045 - 2048 195 Total minimurn lease payments 12,225,556 11, 17 Less aMOLInt representing interest Obligations tinder capital leases -72- COUNTY OF HAWAVI Notes to the Basic Financial Statements June 30, 2019 l W 111i'l i , I ♦ui,�Ii � 111 �W1111111111MILIMMIAMM11111 KiffiRMW Hilt) Lairi(fill 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 nionitor and maintain the sites for thirty years after the facility is closed. Although tile Closure and postelosure care costs will be paid near and after the date that the landfill stops accepting waste, the County recognizes a portion of the closure and postclosure care costs in each operating period. The liability for these costs is included in the government -wide statement of net position. The arnount recognized each year is based on tile landfill capacity used as of the statement of net position date, At June 30, 2019, the County recognized a liability of $22,753,000, based on the use of 98% of the estimated capacity of tile landfill, During the fiscal year ended June 30, 20,19, there was $127,000 in expenditures incurred for the closure of the landfill. The remaining $457,000 in estimated cost of closure and POSMOSUre care will be recognized as the remaining estimated capacity is used. The estimated remaining useful life of the landfill is approximately less than one year. These amounts are based on what it would cost to perform the required closure and postclosure care in 2019. Actual costs at that time may be higher due to inflation, changes in technology, or changes in regulations. Landfill capacity estimates are based on volumes going into the landfill subsequent to the last available engineer's calculation. The volumes going into the landfill do not account for decomposition, settlement, and corrosion; therefore the estimates are revised when new engineering calculations, based on aerial photos and surveys, are available. The County's permit to operate the landfill expired October 9, 1998, The County filed for an extension which was approved by the State until permitted capacity is reached. In accordance with state statute, the County is allowed to continue operations provided that the County acts consistently with the permit previously granted and the extension application, plans, specifications and all other information contained therein, Kealakehe In October 1993, the County closed its Kealakehe landfill in Kona. finder state and federal requirements, the County would have to monitor and maintain this site for ten years from the closure date, However, the County anticipates monitoring and maintaining the site for thirty years because there is presently a subterranean fire which requires active management. The estirnated cost of closure and, postelosure is $17,150,000, based on what it would cost to perform the required closure and postclosure care in 2019. Actual costs may be higher due to inflation, changes in technology, or changes in regulations. Through June 30, 2019, $8,888,000 was spent on closure and postclosure care of the landfill. COUNTY OF 1--IAWAI'l Notes to the Basic Financial Statements June 30,2019 The remaining estimated liability of $8,262,000 is included in the govern inen t -wide statement of net position. During the year ended June 30, 2019, $55,000 was spent on closure of the landfill. Tile Country is providing financial assurance for postclosure care and remediation through self insurance as explained below. Pii'iianahtilu In May 1993, the County contracted with a private company to construct and operate a new landfill oil County land at Pu'uanahulu in West I iawaii. The present contract calls for County employees to perform the daily operations of the landfill, and for tile private company to retain the overall management as well as pet -form all construction work on the landfill cells. Under the terms of tile contract, the County has no responsibility for remediation, closure or postclosure care. Accordingly, no liability for this landfill is included in the County's financial statements. Financial Assnrance For fiscal year 2019�, the County has, provided for financial reso urces, that will be available to provide for closure, postclosure care and rernediation, or containment ofenvironmernal hazards at the above landfills, except Pu'uanahulu. The Environmental Prolection Agency's financial assurance rules include a local government financial test consisting of a financial component, a public notice comporient, and a recordkeeping component. Local governments are required to satisfy each of the three components to pass the annual test. Management believes that the County has satisfied each of the components of the local government Financial assurance requirements. In fiscal year 2013, the County closed its two metal salvage facilities located near the Hilo and Kealakehe Transfer Stations. State law requires the County to perform necessary closure activities, including, but not limited to, the removal of all remaining solid waste and performing appropriate site assessments, and remedial activities. Tile estimated liability of approximately $12,441,000 for the remediation costs associated with these closures is included in the County's financial statements and is based on closure plans prepared by a science and, engineering consultant contracted by the County, and the current value Of Costs expected to be incurred. The liability could change over tirne due to inflation or deflation, changes in technology, or changes in laws and regulations governing the rernediation effort, COUNTY OF HAWAII IffUMIMMMMMIMM WIRM= MEMIMEM 10. LONG-TERM DEBT General Obligation, Bonds The County issues general obligation bonds to provide funds for the acquisition and construction of inajor capital facilities. 'These bonds have been issued by the County for the primary government, component unit activities, (see Note 14) and an improvement district. "fhe County's general obligation bonds are an absolute and unconditional general obligation of the County for which its, full faith and credit are pledged. "I"he principal and interest payments on the bonds are a first charge on the general fund of the County. The 2010 Series B bonds, were issued as bonds designated as "Recovery Zone Economic Development Bonds" tinder the American Recovery and Reinvestment Act f0091 "he T'he County will receive a cash subsidy payment from the United States 'FreaRli-y equal to 45% of the interest payable on the Series B bonds. The following is a summary orgeneral, obligation bond transactions reported in the governmental activities section of the government -wide statement of net position for the County for the fiscal year ended June 30, 2019: Bonds Isslic Bond Balance Bond Balanec Dne Within ?wIahorl_mj Amount JuK 1, 2018 Issues Rdirenicnis hrtq.3 2019 One Year 2007 Series C $ 10,787,388 S 2,344,659 $ $ 2,344,659 2008 Series A 50,000,000 2,395,000 (2 395.000) 2010 Scries Al 26,493,750 2M2,500 (1,,387,500) 1,,455 41 1,455,0()0 2010 Series B 18,506,250 15,123,750 (933,750) 14,190.00fl 978,750 2003 Scries A 58,509,892 6,587,504 (2,212,378) 4,375.120: 2,323,814 2013 Series B 2 1 0 10,0,00 1:3,705,000 (2,050M0) 11.655,0(x0 22,145,41 0 2013 Series C 18,470,000 13,710,000 0.7':311,0100) 11.980,0100 1.805 X10 2013 PI Series, A 1,169,04)0 1,103,581 423 O 17) 1,080,564 23.650 2016 Series A 9%620,000 99,620,900 99,620,000 20 16 Series 13 13,497,500 12,397,500 (L 140,00D) 11,257,500 1,187.500 2016 Series C 44,835,000 44,935,001) (3,545,0001) 41,290,000 3,725,000 2016 Series I ) 28,860,000 28,860A0 28,860,,000 2.280,0,00 2016 Series F 19,061,25(,') 19,061,250 19,061.250 2016 Series 1" 10,040,00,D 6,735,000 (3,345,000) 3.390,000 3390,000 2017 Series A 90,000,000 90,0010,000 (2,685M4'1) 87,315.000 2!,820,000 2017 Scnc13 2,540A0 2,540,000 (2,540,0,00) 2017 Series C 2,478.3,779 2,083,779 (1,017,432) 1.066,347 1,066.347 2017 Series 1) 43 75,0 0 75 m Lm._7 - 43,475,00,C) 7", 558,958,809 407,419,523 - (25,004,077) 382415.446 23,200,061 Add unamorlized prenlikinn --m-4,10,599 6 323 65 .4 _5, . . ... ....... _9 (fi�aq _4a4l 5 1 _._Nj)24J..j8_, Z2, $471_74�3j)88 631 3m -§.] $44(039�527 $2S.498_383 COUNTY OF HAWAVI the to the Basic Financial Statements .June 30, 2019 General obligation bonds payab,le reported in the governniental activities section on ffie governinent-wide, staternentof net position at June 30, 20119 are cornprised of flie following individual issues: Public irnj'.)rovennent (PI) and/or refunding bonds: Priv c - D'jPA 2007 Series C at 4.0% to 5.0%, due t1irougli 2021 $ 2,344,659 2010 Series A at 4.0% to 5,0%, due tlirOUgli 2020 1,455,000 2010 Series B at 3.335% to 6.1%, due flirougli 20,30 14,190,,000 2013 Series A at 2.0% to 5.0%, due ffirougli 2020 4,375,,126 2013 Series B at 3.0% to 5.01%, due tl'irougli 2023 1111,655,000, 2013 Series C at 4.0% to 5.0%, due througli 2024 11,980,000 2013 PI Series, A at 2.75%,, due througli 2048 1,080,5,64 2010 Series A at 3,0% to 5.10%, d u e til rOU In 2.035 99,620,01010 2016 Refunding Series B at 3.0% to 5.0%, due dirougli 2026 11,257,500 2016 Refunding Series C at 5.0%, due through 2027 41,290,000 2016 Refunding Series D at 5.0%, due dirougli 2028 28,860,000 20116 Refunding Series E at 2.0% to 5.0%, due flirough 2029 19,061,250 20 16'1'axable Series F at 1.2% to 1.55%, due tbrougli 2019 3,390,000 20,17 Series A at 5.01%', due flir011glii 203 7 87,3 15,0:00 201117' Refunding Series C at 4.0% to 5.0%,, due dirough 20119 1,066,347 2017 Reffinding Series D at 3.0% to 5.0%, due through 20312 43,475,000 Fowl general obligation bonds payable $ 8.'Z 415-, L-46 AnnUall debt, service requirernents to inaturit�y for the above general obligation bonds are as follows: Fiscal year ending June 30: 2020 2021 20,22 2023 2024 2025-2029 2030-2034 2035 -2039 2040 - 2044 2045 - 2049 Governinental Activities Priv c - D'jPA Interest 23,200,061 $ 17,4681,593 24,992,7109 16,351,526 26,406,084 15,111,59,7 26,457,516 13,836,161 27,753,775 12,539,036 127,10 1,502 43,797,305 83,075,117 18,963,368 42,967,673 3,3,81,770 214,937 48,933 -6,,Q72 _2-L . . 72 -7-9 ....... . .... jl, .. Total $3821415,446 $M,515,50$ COUNTY OF I IAWAVI Notes to the Basic Financial Statements June 30, 2019 Refunded Bonds In periods prior- to the year ended June 30, 2019, the County defeased certain general obligation bonds by placing the proceeds of new bonds in irrevocable trusts to provide for all future debt service payments on the said bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the County's financial statements. As of June 30, 2019, approximately $61.1 million ofbonds outstanding were considered defeased. At June 30, 2019, total unarnortized bond pretniums were $5 8,024,08 1, which are being amortized over the remaining life of the respective bond issues. and Authorized and Unissued ']"he County Council has authorized the issuance of` 74. 1 million in general obligation bonds to Finance both specified and Ungpecified capital irnprovement projects. At June 30, 20 19, $198.4 million was not yet issued. General Obligation Bond Anticipation Notes The following is a summary of general obligation bond anticipation note transactions reported in the governinent-wide statement of net position for the County for the fiscal year elided June 30, 2019: State Revolving Fund Loans The County has obtained loans to assist in financing mandated wastewater projects front 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 tile four counties in the state to Finance construction of wastewater prqjects. The County has eleven projects approved for funding with these loans. Issue Balance Balance Note No- Not.?.. Anw—u—nt J gly 1.2015 Issues Retirements June.30,20 19 Series F, Note R-1 U00,000 $ $ 6,000,000 $ F1,0-:6-0, Series 17. Note R-2 6,00 0,0,00 6,000,000 U00.000 Seri es E, Note R-3 6,000,000 6,000,000 6,00),000 Series 11", Note R-4 6,000,000: (5,000,0001 kOGUOO Series t'. Note R-5 4,000,000 4,0010,000 4,000,000 Series U. Note R-6 500,000 500,000 500MO Series E, Note 11-7 500,0100 5010,000 50000 Series E. Note R-8 500,000 500,000 500,0010 Series E", Note R-9 5 0100 . ........................... 5. 19:99 500,000 State Revolving Fund Loans The County has obtained loans to assist in financing mandated wastewater projects front 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 tile four counties in the state to Finance construction of wastewater prqjects. The County has eleven projects approved for funding with these loans. COUNTY C)F HAWAII Notes to the Basic, Financial Statements ORMUMM Tile County's State Revolving Fund Loans are direct borrowings of the County for which its full faith and credit are pledged. The State Revolving PLInd Loans are secured by the gross revenues ofthe County, The schedLdc below shows the COLUity's R!"transactions for the fiscal Year ended June 30, 201.9: Loans Approved U.xm Bala= 1! —r Ln 61 wt 1 Redrernents J Loan Balance Due Within AIII.Qhmd An.uuwl JOI ly -L..ZQ.19 AddjiiL)uq, Fga,_n& m bldg, 3Q, , IQ 1,9 Quynur Cesspool 2,807,014 24.8,,622 2024 2,820,840 226,696 2025 2029 Conversion S 8,363,773 $ 3,801,856 S $ (438,981, t S 3,362,875 S 441,145 1-aonoka'a LC, 4,513,158 2,509,993 ---- 8019 1180,682) 2,329,811 181,085 Queen Lfll'uokajani 9,42 1,?32 6,1022,288 (488,265) 5,534,023 X90,712 Kalaniana'dc 7,847,045 5,496,764 1(354,255) 5,142,509 355,560 Kealakehe 4avw'n,7+U 2 1, 162,934 14,994,362 (865,587) 14,128,775 866,599 North Kona 3,454,500 1,655,604 (39,502) 1,61%,102 79,449 Keahakche Effluent Rcuse 6158,6'87 718,91 2,141,373 (1,026,800) 1,833,484 85,354 SH L,andfiill ('10sure 678,370 448,092' -- 448,092 -- Kcalakehe Scrap Metal 5,r2 5 97 -5297 2 . . ........ �,W S3.5.64,212D U.4312VO. SOI�91512;1 U=L�j Lzu%04' The reniaining poarts bear interest at �fO) 25% to 0,501% exclusive o'fa 0.25% to 0,75% loan fee, and require payrnents through fiscal year 2040. Debt service to nialurity fear disbursenients to date on these projects, are as follows: Governmental Activities Fiscal year ending June 30:: 1! —r Ln 61 wt 1 Interest 2020 $ 2,499,904 $ 3 l 0,707 2021 2,779, 77 292,172 2022 2,793,212 270�,495 2023 2,807,014 24.8,,622 2024 2,820,840 226,696 2025 2029 13,166,146 833,667 20'3C7..-2034` 9,377,695 324,258 20'3,5 — 2039 3,,2 7,484 70,937 20401 16.1 1222. ---- 8019 Total$31,&j ,594 S�' 5 7 COIJNTY OF JIAWAVI Notes, to the Basic Financial Statements The following is a suinniary of other general long-term obligations transactions for the fiscal: year ended June 301, 2019:. Governmental activities: Cornipensated absences i andjudgilients (see Note 12) Capital leases (see Note 8) Landfill, costs payable (see Note'9) Pollution remediation (see Note 9) Other post employment benet'st obligation (see Note 13) "Total Balance Mance Due Within July 1, 2 .18 Additions* Pavinents June 30 2019 One Year. 41,136,979 $15,862,555 S(14,5 , "31) $42,4 12,7 13 $101,626,781 18,13 5,40 171, 188,988 8,1 17,577 6,776,636 (3,839,91 14) 3 1,484,,483 (3,309,881) 11,579,332 30,007,000 1,190,373 (182,373) 31,015,000 13,144,259 1,914,583 (2,618,109) 17,4411,73 3 391,454, 00, 9,380j 10 _4.010,834,8_1_0 $ $(24,5,37M) 0111 , 5, J02, * Net of new clainis liability and existirig clairris resolved at less than previous estimate. 4,495,902 3,359,8110 359,009 3,9149,238 $212_7901,740 Historicaliy, the County's general fund has been used to liquidate the triaJority ofotiler long- terni liabilities, including tile other post eniployrnent benefit obligation and tile C0111pensated absences since most ernployees are paid by the general fund. Fund Balances - Debit ervice Funds The Fund balance in tile debt set -vice funds at June 30, 2019 includes $29,563,381, which is reserved for principal payrrients oil general obligation bonds and $3,647,978, Which is I reserved for the payinent of interest on the bonds. Enterprise Fund Notes, and and Loan Payable On I`ebrulaiN, 12, 2013, the County issued general obligation bonds oto behalf of Kula'irnano Elderly Housing Project (Project) to pay off its two notes payable to the U,S, Departnient of Agriculture, Fartners Horne AcIrninistration with principal and interest balances aggregating $835,108. Tile Ilro' ,Iect is responsible for the debt service payrnent related to their pot -tion of the bonds, which is also secured with the County's general obligation pledge. Because the Pro.ject is responsible for only a portion of the total bonds issued, it was decided that the project would continue to rnake bound payments equivalent to its previous monthly installment COUNTY OF HAWAII Notes to the Basic Financial Statements June 30, 2019 payments of $7,826 on the old notes at 5.547% interest. t)nder this payrnent schedule, the Project will inake contributions through 2025 of the bonds 2032 inaturity date. The following is a suinniary ofthe Project's bond payable transactions for the fiscal year ended Jun 30, 2019: Balance at JLIIY 1, 2018 $ 592,496 Deductions --1,62, L)2 2 -- J Balance at.1une 3�, 2019 529,874 Less current portion 8 6 Note payable, net of current portion $ 46,3,,648 The following is a surninary of the: annual maturities for the enterprise fund bond payable: Business Fiscal year ending June 30: Princ I W91 - interest - ------ 2020 66,186 $ 25,869 2021 69,9152 21,997 2022 7'3'.,93'2 17,901.5 2023 78,139 13,580, 2024 82,586 9,009 2025 -2026 159,079 4,4L6 Total $529,,V4 $ 92,,826 On October 291, 20 12, tile County assuaied the loan of its lessee Ouh Ekahi Partnership with the Ha%vai'i Housing Finance and Development Corporation in the arnount of $478,430, 1"he loan is non-interest bearing and rnatures on Feb�ruary 27, 2041. In exchange, the County assumed ownership of tile Ouli Ekahi project which consists of a 33 single fanifly affordabie rental housing prospect. 'File following is a SUrnniary of enterprise fund loan payable transactions for the fiscal year ended JLsne 30, 2019: Balance at Ju ly 1, 2018 $214,,509 Deductions -.L4 k, 6 Q 6) Balance at June 30, 2019 167,903 Less current portion 61 34 Loan payable, net of current portion..5-69 ........... June 30, 2019 Time following is a sumnlary of the anslual maturities for the enterprise fund loan payable: Fiscal year ending June 30 2020 2021 2022 2023 2024 2025 — 20,28 Total Special Assessment Bonds Business-typs-�cti!jjies $ 36,334 16,500 16,500 16,500 16,500 65,569 on= The County has issued general obligation bonds oil behalf of Improvement District No. 18 for water improvements (see Note 4). 'Fhese bonds were then refunded by a portion of the 2013 Series A Bonds that were issued. The Improvement Distri�ct 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 improvernent district's share of the refunded bonds matures annually thrOUgh 2027 and bear interest at the previous rates of 4.375% to 4,75%,. Total general obligation bonds payable included in the government -wide statement of net position were $914,303 at June 30, 2019. The County has also issued general obligation bonds oil behalf of Improvenient District No. 19 for water improvements (see Note 4), The Improvement District is, responsible for the payment of the debt service oil these bonds, but the County remains liable because they are general obligations of the County. The improvenlent district's share of tire refunded bonds rnatures annUally through 2048 and bear interest at the previous rates of 2.75%. Total general' obligation, bonds payable included ins the government -wide statement of net positioii were $ l, 080,5 64 at June 3 01, 20119" T'he bonds are secured by a first lien on the land benefited by the i ni prove ments, and are to be repaid froin the annual assessments levied against the owners of the land" Time County acts as an agent for the properly owners within the improvement districts to collect assessments receivable, forward payments to bond -paying agents at appropriate dates and, if required, administer foreclosure proceedings. The following is a suninlary of bond transactions for Improvement District No. 18, Coasiview/Wonderview Water improvements, and No. 19, Kona Ocean View Properties Subdivision for the fiscal year ended June 30, 2019: Balance at.luly 1, 2018 $2,098,246 Deductions J.1 f!3,L79) Balance at June 30, 2019 $1,994,867 COUNTY OF HAWAVI Notes to the Basic Financial Statements June 30, 2019 The following is a SLUTIrnary of the annual maturities for the improvement district general obligation bonds: fiscal year ending June 30: Principal Interest 2020 $ 107,752 70, O1 2021 112,317 65,336 2022 117,,083 60,466 2023 122,057 55,382 2024 127,251 50,074 2025 - 2029 595,857 165,142 2030 -2034 163,,868 1001,704 2035 201319 187,673 76,571 2040-2044 214,937 48,932 2045 246.072 17.281 Total $1,9941,867 $ 709,8 39 1,1. COMMITMENTS AND CONTINGENCIES Contractualconiniftments — Contractual commitments for capitals projects, expenses, and supplies at June 30, 20 19, except in the enterprise funds, are reflected in the balance sheets as, a part of the respective fund balance categories and are as follows: General fund $ 1, 156,030 Capital projects fund 171,679,938 Nonmajor funds_1,262J55 - — -- . ......... $ 182,01:98,323 Contractual conlrnitments for the enterprise funds were immaterial. Intergoverinntental reveiiuim� —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 tile grants. In the opinion of managernent Ofthe County, disallowed costs, if any, would not be material, Claiins — Numerous clairns and lawsuits have been filed against the County in the normal course of its operations. A liability for probable losses is included on the government -wide statement of net position (see Note 12). Although the outcome of the various clailins and lawsuits is not presently determinable, in the opinion of the County's Corporation Counsel, the resolution of such matters will not have a material adverse effect on the financial condition Of tine County, I 14911111HUMNIUMMI 19 ; M&MIRM"ITT MR .rune 30, 2019 ADA cottipliaitce — The County entered into a stipulated agreement, filed on June 4, 1998, which relates to the Department of Parks and Recreation (Parks). The agreement required Parks to establish practices, policies and procedures regarding its programs, and prepare a transition Plan by the middle of the year 2 00, 'The self-evaluation and transition, plan for programs, practices and procedures has been completed and approved by the County Council, The cost impact of implementation is not rriaterial because the necessary modifications are primarily procedural, The second pail of this, stipulated agreement is the reevaluation of all County facilities, which was completed and accepted by the County Council on June 30, 20OO�, Approximately 240 County facilities were surveyed as part of this effort. The tentative cornpletion date of all necessary repairs and renovations was 12 years from the date the County, Council accepted the self-evaluation. The initial (1997-2000) estimated cost of the facilities repairs was $15, 1 million, which would have been spent over the 12 -year period. Funding allocated initially for facilities repairs was $17.5 million, with another $4 million of federal funding anticipated through community development block grants over the next 2 years. The Department of Public Works has requested an additional $2 million a year for the other County ADA facilities' project. Because of severe disparities that Surfaced between the original ADA projects' scoping and, construction estimates and actual scopes and costs, as well as time/delivery issues that carne into play because of necessary permits and reviews, and design professionals' costs that weren't factored into the effort,, the: County sought relief from the Court in the form of both a time extension and reprioritization of sites. As a result, the County obtained approval of a modified 4 -year plan wherein accessibility finprovernents at the then remaining 35 park sites were required to be completed by December 3 1, 2016. The County is engaged in ongoing quarterly briefings with the federal magistrate judge assigned to this case and has proposed a completion date, for all: remaining projects, of the end of calenclar year 202 1. 'rhe balance of the unimproved sites would be deferred indefinitely pending separate ifnprovernent./enhancernent projects that would inherently trigger accessibility improvements due to the nature of each project's scoping and applicable ADA requirements. Of the 35 park sites requiring accessibility improvements under the n,iodifiedi 4 -year plan plus an additional park site (Dr, Francis, Wong Stadium at Ho'olulu Complex) that was reintroduced into the transition plan via the court, 19 have been completed, I has been permanently omitted due to lava inundation, and 16 are in design and permitting, ]'lie County has encumbered or spent more than $17.61x9 on these projects. The County had spent $42.0 million for the construction, and design fees to complete 5O park facilities, (some having multiple ADA work being completed) prior to the development of the modified four year plan. In addition, the County's ADA coordinator (Equal Opportunity Officer) has access to an identifiable account of at least 1 50,000 to handle requests for reasonable accommodations for County departments; and the procedures for these requests have been finalized an(] are avail!lab�le on the I lun,ian Resources, Department's Equal Opportunity arid the ADA web page, Also, Parks has a Recreation Specialist who reviews and investigates requests for reasonable accommodations, and recommends specific actions oil those requests. No" tee to the Basic Financial Stateinents June 30, 201'1 Mmnmff��C �--' -Nl The County is exposed to various risks of losses related to torts; theft, darnage, and destruction of assets; errors and omissions; work-related injuries to eniployees; and natural disasters. The County obtains property insurance (including coverage on a high deductible basis for natural disasters, of hurricane, flood and earthquake). It purchases flood insurance oil selected structures, medical malpractice for emergency medical services, aviation liability for helicopter operations, retired senior volunteers liability coverage, auto liability for mass transit buses and subsidized police vehicles, and auto physical damage coverage on police fleet vehicles and the Kohala Ranch fire truck. The County ensures property insurance is obtained on housing prqjects. There was no reduction in insurance coverage during the year frorn coverage in the prior year, The County is substantially self-insured for general liability and auto liability as well as for all other exposures including workers'cornpensation, As such, emphasis is placed on claims management and safety/risk control to protect tile public and employees and to rnitigate loss costs. The liability for clairns and judgments is reported oil the government -wide statement of net position and the majority will be liquidated fronii the County's general fund. Liabilities, are reported when it is, probable that a loss has occurred and the arnount of that loss can be reasonably estimated. These losses include ail estimate of cIairns that have been incurred but riot reported (IBNR). Clairn liabilities, including IBNR, are based on tile estimated ultimate cost of settling tile 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. Estirnates of IBNR are based on historical experience. The liability for claims andjudgments is reported on the government -wide statement of net position. At June 30, 20191, the amount of this liability was $31,484,4 3. "I'his is the County's best estimate based oil available inforniation. Changes in the reported liability since July 1, 2017 are given below, Workers' General Qornpensatiqtjty Ukb -il i -tY Balance at,luly 1, 2017 2,2941202 Incurred clairns (including IBNR)I* (177,100) Clairn payments --U? LI9 IiD Ba l ance at June 3 01, 2018 $ 1,897,72-3 Incurred clairns (including IBNR)* 14,128,499 Clairn payments _U221232) Ballance at June 30, 2019 $ 15.$26,290 Workers' Total Qornpensatiqtjty Ljail L $ 12,141,491 S -11D5 .A9 7,727,357 7,5,50,,257 $ 3,060,489 17,188,988, -_L3,13E91J4 $ 15,65,8,193 $ 31.,484,4 13 *Net of new claims, liability and existing, clairns resolved at less than previous estimate. COUNTY 017 HAWAN Notes to the Basic Financial Statements June 30, 2019 13. EMPLOYEE BENEFITPLAN S Pensions — Employees' Retirement System of the State of flawaN, Pension Plan Description - All eligible employees of the State and counties are provided with pensions, through a cost-sharing multiple -em p loyer defined benefit pension plan administered by the Employees' Retirement System ofthe State of Hawaii (ERS). Benefit terins, eligibility, and:, contribution requirements are established by HRS Chapter 88 and call be aniended through legislation, The ERS issues, a publicly available financial report that can be obtained at E,RSs, website: h(1p://cl-s,chawah,gov/, Benefits Provided - The ERS provides retirement, disability, and death benefits that are covered by the provisions ofthe noncontributory, contributory,, and hybrid retirement plans. The three plans provide a monthly retirement a] lowance equal to the benefit Multiplier (generally 1.2 % or 2%) rnuitiplied by the average final compensation inultiplied by years of credited service. The benefit multiplier decreased by 0.25% for new hybrid and contributory plan inernbers hired after June 3 0, 2012. Average final compensation is based Oil the five highest paid years of service excluding the payment of salary in lieu ofvacafion for members hired after June 30,, 2012, For those hired between January 1, 19�71 and June 30, 2012, AFC is based on tile three highest paid years of service excluding the payrnent of salary in lieu of vacation. If the employee was hired prior to January 1, 197 1, the AFC is the average salary earned during the five highest paid years of service, including the payrnent of salary in lieu of vacation, or three highest paid years of service, excluding the payment of salary in, lieu, of vacation, For rnernbers hired before July 1, 2012, file original retirement allowance is increased by 2.5% each July I following the calendar- year of retirement. This cumulative benefit is not compounded and increases each year by 2.5% of the original retirement allowance without a ceiling (2.5% of the original retirement allowance the first year, 5.0% the second year, 7.5% the third year, etc.). For niembers hired after June 30, 2012 the: post-retirement annuity increase was decreased to 1.5% per year. Retirement benefits for certain groups, such as police officers, firefighters, some investigators, sewer workers, judges, and elected officials, vary from general employees,. Noncontrib toa Plan Retirement Benefits - General ernployces" refirenlent benefits are determined as 125% of average final compensation multiplied by the years of credited service. Employees with 10 years of credited service are eligible to retire at age 62, Employees with 30 years of credited service are eligible to retire at age 55. - 85 - COUNTY OF HAWAVI Notes, to the Basic, Financial Statements June 30, 20 19 Disability Benefits - Mernbers are eligible for service -related disability benefits regardless of length of service and receive a lifetirne pension of 35% oftheir average final corripensation. Ten years of credited set -vice is required for ordinary disability. Ordinary disability benefits are deterinined in the sarne manner as retirernent benefits but are payable irninediat0y, without an actuarial reduction, and at a mininiuni of 12.5% of average filial cornpensation. Death Benefits - For service -connected deaths, the surviving spouse/reciprocal beneficiary receives a niondfly benefit of 30% of the average Final compensation, until rernarriage or re-entry into a new reciprocal beneficiary relationship. Additional'benefits are payable to surviving dependent children Lip to age 18, If there is no spouse/reciprocal beneficiary or dependent children, no benefit is payable. "ren years of credited service is required for ordinary death benefits. For ordinary death benefits, the surviving spouse/reciprocal beneficiary (until rernarriage/reentry into, a new reciprocal beneficiary relationship) and dependent children (Lip to age 18) receive a benefit equal to a percentage of mernber's accrued inaxii-nurn allowance unrcdticed for age or, if the rneniber was eligible for retirement at the tillie of death, tlic surviving spouse/reciprocal beneficiary receives 100% joint and survivor lifetime plension, Contributory.fljgn[or CiRp g ) Jul,20 1 12 ,Igyg��sI-I i red _ErL:i Retirement Benefits - General employees' retirement benefits are determined as 2% of average final compensation multiplied by the years of credited service. Gencrall ernployees with 5 years of credited service are eligible to retire at age 5. Police and firefighters' retirement benefits are determined as 2.5% ofaverage filial compensation for each year of service ul�) to a rnaximurn of 80%. Police and firefighters with 10 years, of credile(I service are eligible to retire at age 55. Disability Benefits - Mernbers are eligible for service -related disability benefits regardless of length of service and receive a lifetirrie pension, of 50% of their average final corrilpensation. 'Ten years oilcreditedservice is, required for ordinary disability. Ordinary disability benefits are deterinined as 1.75% of average filial compensation 11"lUltiplied by the years of credit services and are payable immediately, without an actuarial reduction, and at a rninimurn of 30% of average filial compensation, Death Benefits - For service -connected deaths, the surviving spouse/reciprocal beneficiary receives a lump surn payment: of the mernber's contributions and accrued interest p4is, a nionthly benefit of 50% of the average final COMpenSatiO11 Until rernarriage or re-entry into a new reciprocal beneficiary relationship. If there is, no surviving SPOUselreciprocal beneficiary, surviving children (up to age 18) or dependent parents are eligible for the monthly benefit. If there is no spouse/reciprocal beneficiary or dependent children/parents, the ordinary death benefit is payable to the designated beneficiary, COUNTY OF HAWAII Notes to the Basic Financial Statements J LI ne 3, 20 19 Ordinary death benefits are available to ernployees, who were active at tinic of death with at least I year of service. Ordinary death beriefits, consist of a lump sum payment of the mernber's contributions and accrued interest plus a percentage of tire salary earned in the 12 months preceding, death, or 50% Joint and Survivor lifetinie pension if the member was not eligible for retirement at the time of death but was credited with at least 10 years, of service and designated one beneficiary, or 100% Joint and Survivor lifetirm pension if tlic merriber was eligible for retirement at the time of death and designated: one beneficiary. o Contributy ivoT..L,,mplo c(�s red After June 2 ........ Ea (_ — y_ —Bj If 2QL Retirement Benefits — General employees' retirement benefits are determined as 1 .75% of average final compensation multiplied by the years of credited service, General employees with 10 years, of credited service are eligible to retire at age 60. Police and firefighters' retirement benefits are determined as 2.25% of average final compensation for, each year of service up to a maximum of 80%. Police and firefighters with 10 years of credited service Marc eligible to retire at age 60, Disability and Death Benefits - Mernbers, are eligible for service -related disability benefits regardless of length of service and receive a lifetime pension of 50% of their average Final compensation, plus refund of contributions and accrued interest, Ten years of credited service is required for ordinary disability. Ordinary disability benefits arc 1,75% ofaverage final, compensation for each year of service for police and firefighters and are payable in mediately, without an actuarial reduction, at a ininimurn of 30% of average Final compensation. Death benefits for contributory plan rnernbers, hired after June 30, 2012 are generally the sarne as those for contributory plan members hired June 30, 2012 and Prior. ilybrid Plan for ErnP0 �ees Hired Priorjo.Rdy -1-2) --- __L,_ZQLLZ Retirement Benefits - General employees' retiretrient, benefits are dieteriflined as, 2% of average final compensation multiplied by the years oferedited service. General employees with 5 years of credited service are eligible to retire at age 62. General employees with 30 years of credited service are eligible to retire at age 55. Disability Beillefits - Members are eligible for service -related disability benefits regardless of length of service and receive a lifetime pension of 35% of their average final compensation plus refund of their contributions and accrued interest. Ten years of credited, service is required for ordinary disability. Ordinary disability benefits, are determined inthe same manner as retirement benefits but are payable immediately, without air actuarial reduction, and at a minirnUrn of 25% of average final compensation, COUNTY OF HAWAVI Notes, to tie l3asic Financial Staternents, r MMENEEM Death Benefits - For service -connected deaths, the surviving spouse/reciprocal beneficiary receives a lump SLIM payment of the member's contributions and accrued interest plus a monthly benefit of 50% of time average final compensation until remarriage or re-entry into a new reciprocal beneficiary relationship. If there is no surviving spouse/reciprocal beneficiary, surviving children (up to age 1 f) or dependent parents are eligible for the monthly benefit, If there is no spot t se/rec iproca I beneficiary or dependent children/parents, the ordinary death benefit is, payable to time designated beneficiary. Ordinary death benefits are available to employees who were active at time of death with at least 5 years of service. Ordinary death benefits consist of a iump sum paynient of the rnernber's contributions and accrued interest multiplied by 150%, or 50% Joint and Survivor lifetime pension if the member was not eligible for retirement at the tirne of death but was credited with at least 10 years of service andl designated one beneficiary, or 100%.Joint and Survivor lifetime pension if the mernber was eligible for retirement at the time of death and designated one bencEciary. Yhrid Plan for Ern 10 esITHired After June 30 2012 Retirement Belief its - General employees' retirement benefits, are determ ined as I.75% of average final compensation multiplied by the years of credited service. General employees with 10 years of credited service are eligible to retire at age 65. Employees with 30 year's of credited service are eligible to retire at age 60. Sewer workers, water safety officers, and EMTs may retire with 25 years of credited service at age 55. Disability and Death Benefits - Provisions for disability and death betlefits generally remain time same except for ordinary death benefits. Ordinary death benefits are available to employees who were active at time of death with at least 10 years of set -vice. Ordinary deall'i benefits consist of a lump sum payment of the member's contributions and accrued interest rnuitiplied by 120%, or 50% Joint and Survivor lifetime pension if the member was riot eligible for retirement at time tinic of death and designated one beneficiary, or 100% Joint and Survivor lifetinle pension if the rrien-iber was eligible for retirement at time bine of death and designated one beneficiary. ('., I ontributions - Contributions are established by [-IRS Chapter 88 and rimy be amended through legislation. The eillployer rate is set by statute based on the reconlinendations, of time ERS actuary resulting f7rom an, experience study conducted every five years. Since July 1, 2005�, tile employer contribution rate is a fixed percentage of compensation, inc�luding the normal cost plus all"101111tS required to pay for the unfunded actuarial accrued liabilities, Tile contribution rates for fiscal year 2019 were 31,001% for police and firefighters arld 19.0% for all other employees, Contributions to time pension plan from tile County for the year ended June 30, 2019, 20118, and 2017 were $44,8,53,953, $41,562,,933, and $36,157,98 1, respectively. ILIM COUNTY OF HAWAII IMWNTIMI" MEMIMEM The employer• is required to make all contributions for members in the noncontributory plan. For contributory plan employees hired prior to July 1, 2012, general employees are required to contribute 7.8% oftheir salary and police and firefighters are required to contribute 12,2% of their salary. For contributory plan employees hired after June 30, 2012, general employees are required to contribute 9.8% of their salary and police and firefIghters are required to contribute 14,2% of their salary. Hybrid plan members hired prior July 1, 2f111 are required to contribute 6.0% of their salary. Hybrid plan members hired after June 30, 2012 are required to contribute 8.0f % of their salary. Peitsiou liabilities, peusion e.cpeivve, wid tieferred outflows of resources (iud dtferred htflows oj'resourcesrehaed to pensions— At June 30, 2019, time County reported a liability of $ 35,693,501 for its proportionate share of the net pension liability. The net pension liability was nieasured as of June 30, 2018, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The County's proportion of the net pension liability was based oil time actual employer contributions to the pension plan relative to the contributions ofal I participating ernployers. At June 301, 2018, the County's proportion was 4.77%, which was an increase of .06% fi-orn its proportion measured as of June 30, 2017. For the year ended June 30, 2019, the ounity recognized pension expense of$93,523,335. At June 30, 20,1 9, the County reported deferred outflows of resources and deferred, inflows of resources related to pensions froni the following sources; Differences between expected and actual experience Net difference between projected and actual investment earnings on pension plan investments Changes in assumptions Changes in proportion and differences between employer contributions and proportionate share of contributions County contributions subsequent to time measurement date Total Deferred Deferredl. Outflows Inflows of of Resourcies, Reso - it - rc .- e - s $ 23,304,996 $ 2,516,117 — 3,832,259 73,900,841 -- 19,019,804 3,852,069 44,153 9.5-3 -- $J 6 1,079,594 $J0,2,00,445 $44,853,953 reported as deferred outflows ofresources, related to the County's contributions to the pension plan subsequent to, tile measurement date will be recognized as a reduction of the lie( Pension hability in the fiscal year ended Ririe 310, 2020. -89- Notes to the Basic Financial Statements June 30, 2019 Other amounts reported as, deferred outflows of resources and, deferred inflows, of resources related to pensions, will be recognized in pension expense as follows: Actuarial assumptions — The total pension liability in the June 30, 2018 actuarial valuation was determined using the following actuarial assumptions, applied to all periods, included in the measurement: Inflation 2.50% Payroll gro%vth rate 3,50% per annum Salary increases 3.50% - 7.00%, including inflation Investment rate of return 7.00% per annum, including inflation Cost or living adjILIshnents 150%/ 1.50% Mortality rates used in the actuarial valuation as of lune 30, 2018 were based oil the following: Active mernbers — Multiples, of tile RP 2014 mortality table for active employees based oil tile occupation of the rnernber. Healthy retirees The 2016 Public Retirees of Hawai'i mortality table, generational projection using the BB pr(jection table from the year 20:16 and with multipliers based on plan and group experience. Disabled retirees —Cease 1"able I'br healthy retiree's occupation, set forward 5 years, generational prqjectiOn using tile BB proJection, table from the year 2016. Minimum rnoriality rate of 3. % for males and 2.5% for fernales. The actuarial assumptions used in the June 30, 2018 valuation were based on the results of an actuarial experience study for the five-year period ending June 30, 2015, The major changes to assumptions rcRdfing frown the 2015 actuarial experience study were (1) a decrease in the investment return assumption frorn 7.65% to 7.00% and (2) the mortality assumptions were modified:, to assume longer life expectancies as well as to reflect continuous mortality improvement. ERS updates their experience studies every five years. Net Deferred OLItflOWS (inflows) of Fiscal Year Endjjl&.1 Resources 2020 $ 46,567,986 2021 39,388,678 2022 16,439,932 2023 2,659,286 2024 .!.A 9-69,,-!,196 $ 0,6�025 Actuarial assumptions — The total pension liability in the June 30, 2018 actuarial valuation was determined using the following actuarial assumptions, applied to all periods, included in the measurement: Inflation 2.50% Payroll gro%vth rate 3,50% per annum Salary increases 3.50% - 7.00%, including inflation Investment rate of return 7.00% per annum, including inflation Cost or living adjILIshnents 150%/ 1.50% Mortality rates used in the actuarial valuation as of lune 30, 2018 were based oil the following: Active mernbers — Multiples, of tile RP 2014 mortality table for active employees based oil tile occupation of the rnernber. Healthy retirees The 2016 Public Retirees of Hawai'i mortality table, generational projection using the BB pr(jection table from the year 20:16 and with multipliers based on plan and group experience. Disabled retirees —Cease 1"able I'br healthy retiree's occupation, set forward 5 years, generational prqjectiOn using tile BB proJection, table from the year 2016. Minimum rnoriality rate of 3. % for males and 2.5% for fernales. The actuarial assumptions used in the June 30, 2018 valuation were based on the results of an actuarial experience study for the five-year period ending June 30, 2015, The major changes to assumptions rcRdfing frown the 2015 actuarial experience study were (1) a decrease in the investment return assumption frorn 7.65% to 7.00% and (2) the mortality assumptions were modified:, to assume longer life expectancies as well as to reflect continuous mortality improvement. ERS updates their experience studies every five years. COUNTY OF HAWAVI Notes, to the Basic Financial Statenients June 30, 2019 'The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estirnate ranges ollexpected future real rates of return (expected returns, net of pension plan, investment expense and inflation) are developed for each major asset class, These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates ofreturn by the target asset allocation percentage and by adding expected, inflation, 'The target allocation and best estimates of geornetric rates of return for each major asset class are Summarized in the following table: Discount rate — The discount rate used to measure the total pension liability was 7,00%, which was the same irate used, at the prior measurement date, `Fhe projection, ofcash flows used to determine the discount rate assumed that employee contributions will be made at the current contribution rate and that contributions from the County will be made at statutorily require(] rates, actuarially determined, Based on, those assumptions, the pension plan's fiduciary net, position was pro.jected to be available to make all prqjected future benefit payments of current active and inactive employees, Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of prc�lected benefit payments to determine the total pension liability. Sensitivitjr as 'the CounijY'sproportionate share cad the arra peiisionliahilit ylt)chattA-vt,�v in the (fiscount rate —17fic following presents the County's proportionate share of the net pension liability calcu liated using the discount rate, of 7.00�%, as well as what the County's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1 -percentage -point lower (6.00%) or I -percentage-point higher (8.001%) than the Current rate: I% Decrease Current Discount 1% Increase (6.00%) Rate (7,00%) (8.00%) County's proportionate share of the net pension liability $ $39,14 ,4 $ 6,35,693,501 ,, —5 3 $ 467,811,298 Long -Term Long-'ferni Strategic Allocation 'Target Expected Rate of Expected Real (Risk -Based Classes) Allocation Return* Rate of Return Broad growth 63.00% 7J0% 4,85?�Io Crisis risk offset M00% 4M% 2.35% Real return 10.00% 4,10% 1-85% principal protection 7M% 2,50% O.25% lK00% *Uses an expected inflation rate of 2.25% Discount rate — The discount rate used to measure the total pension liability was 7,00%, which was the same irate used, at the prior measurement date, `Fhe projection, ofcash flows used to determine the discount rate assumed that employee contributions will be made at the current contribution rate and that contributions from the County will be made at statutorily require(] rates, actuarially determined, Based on, those assumptions, the pension plan's fiduciary net, position was pro.jected to be available to make all prqjected future benefit payments of current active and inactive employees, Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of prc�lected benefit payments to determine the total pension liability. Sensitivitjr as 'the CounijY'sproportionate share cad the arra peiisionliahilit ylt)chattA-vt,�v in the (fiscount rate —17fic following presents the County's proportionate share of the net pension liability calcu liated using the discount rate, of 7.00�%, as well as what the County's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1 -percentage -point lower (6.00%) or I -percentage-point higher (8.001%) than the Current rate: I% Decrease Current Discount 1% Increase (6.00%) Rate (7,00%) (8.00%) County's proportionate share of the net pension liability $ $39,14 ,4 $ 6,35,693,501 ,, —5 3 $ 467,811,298 COUNTY OF HAWAII Notes to the Bas,ic Financial Statements Pension planfiduciary nel position --1 4 i1 d information about the Pension plan's fiduciary net position is available in the separately issued E,RS Comprehensive Annual Financial Report that includes financial statements and required supplementary information, 1'a 7ahles to the pension plari At June 30, 20 19, the annual aniount payable to the ERS totaled $4,683,177, which represents the employer contribution for the second half of the rnonth, of June 20 19, as, required by HRS, and the excess pension cost tinder Act 153/St..I-1 2- 12 REFER I -IRS Section 88-100 for fiscal year ended June 30, 20M Other Pension Plans - County of Hawai'i Bandsmen Pension System The County also sponsors a nonqualified, governmental single employer defined benefit pension plan for members of the County Band (County of Hawai'i Bandsillen Pension Systern) who are or were ineligible for benefits Linder ERS and whose employment begall before June 1, 1990. Under HRS Chapter 88, the County Pension provides retirement benefits that are computed based on the average annual salary during the last 10 years of employment with a IllininlUill pension amount of $50 per month. There are no assets accumulated in a trust for the payment of benefits. As of the valuation date of June 30, 2019, there were 21 inactive employees or beneficiaries receiving, benefits; 12 inactive employees not yet receiving benefit payments; and 4 active members. Pension liabilities, pension e.vimnse, and deferred oufflows of resources and (kyerred inflows of resourees related it) pensions — At J tine 30, 2019, the County reported a I iabi I ity of $931,741. The total pension liability was measured as ofJ Line 30, 2019 based oil all actuarial valuation as of June 30,,2019. For the year ended JUne 30, 20�19, the County recognized pension payments of$47,532 and a negative pension expense of $88,699, Actuarial assumptions — Tile total pension liability in the June 30, 2019 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the IneaSUrement: Inflation 2,50% Payroll growth rate 3.50% per annum Salary increases 3.50%, including inflation Cost of living ad.justinents 150% COUNTY OF IIAWAVI Notes to the Basic Financial Statements The discount rate used to measure the County's total pension liability was 3.13% based on the daily municipal bond rate closest to but not later than the measurement date of the Fidelity "20 -Year Municipal GO AA Index". The following presents the County's total pension liability calculated using the discount rate of 3.13%, as well as what the County's total pension liability would be if it were calculated using a discount rate that is I -percentage-point lower (2.13%) or I -percentage-point higher (4. 13 %) than the current rate: I% Decrease Current Discount 1% Increase (2.13%) Rate (3.13%) (4,13%) County's total pension liability $ 1_,087,041 9,� 1,741,,46 $ 8 +0 _$ Schedule of Changes in Total Pension Liability Measurement year ending June 3 0, 2..0..[.-9.. Total Pension Liability Service cost $ 7,392 Interest 38,149 Differences between expected and actual experience (89,947) Changes of assumptions (44,293) Benefit payments ................... I4715U) Net Change in Total Pension Liability (136,231) Total Pension Liability Beginning __j,Q7ff7_2 Total Pension Liability Ending S 951,741 Trost -T etirenitent Benefits In addition to providing pension benefits, the County is required: by state statute (HRS Chapter 87A) to contribute to the Hawaii Employer -Union Health Benefits "I"rust, Fund (the EUTF). The EUTF is an agent, multiple -employer defined benefit plan providing certain healthcare and life insurance benefits to all qualified retirees, active employees, their dependents and their beneficiaries.. Bene fils Pi-ovicled Chapter 87A of the FIRS grants the authority to establish and amend the benefit terms to the board of trustees of the EUTF. The EUTF currently provides medical, prescription drug, dental, vision, chiropractic, supplernental medical and prescription drug, and group life insurance benefits for retirees and their dependents. COUNTY OF HAWAII Notes to the Basic Financial Statements June 30, 019 The following table provides a summary of the number rota covered by thebenefit terms as of J Lily 1, 201 . Inactive ernpioyees or beneficiaries currently receiving benefits 1,641 Inactive employees entitled but not yet receiving benefit payments 217 Active employees A4 4,246 ('0171ribillions ' The County's contribution, levels are established by Chapter 87A of tile FIRS. The county was required to contribute 1001% of the ARC starting in fiscal year 20 1, 9. The ARC represents a level of funding that is sufficient to cover, 1) the normal cost, which is the cost of the other posternployment benefits attributable to tile current year of service; and 2) all amortization payment, which is a catch-up payment for past service costs to fund the Unfunded actuarial, accrued liability over the next thirty years. For the fiscal year ended June 30, 2019, contributions to the OPEB Plan from the County totaled $39,770,000 which resulted in all average contribution rate of approximately 2.1% of covered-ernployee payroll. For ernployces hired prior to July 1, 1996, the County pays the entire irionthly healthcare prern iurn for employees retiring with 10 or more years of credited service, and 0% of the monthly premium for employees refiring, with fewer than 10, years ofcredited set -vice, The current (pay-as-you-go) prerniurn costs are paid by the respective funds but the net other posternifloyinent benefit obligation is paid by the General Fund. I -or employees hired after June 30, 19961, and who retire with fewer than 10 years of service, tile ("'ounty makes no contributions. For those retiring %vith at least 10 years but fewer than 15 years ofservice, the County pays 50% of the retired employees " monthly Medicare or rion- Medicare prerniurn. For employees hired after June 30, 1996, and who retire with at least 15 years but fewer than, 25 years of service, tile County pays 75% of the retired employees' monthly Medicare or non -Medicare premium. For those retiring with over 25 years of service, the County pays the entire healthcare prerniurri. For employees hired after.41ne 30, 2001, and who retire with fewer than 101 years of set -vice, the County niakes no contributions. For those: retiring, with at least 10 years, but fewer than l 5 years of service, the County pays 50% of the retired employees' monthly Medicare or non - Medicare prerniurn based on the self -plan. For employees hired after June 30, 2001, and who retire with at least 15 years but fewer than 25 years of service, the County pays 75% of the retired employees' nionthly Medicare or non -Medicare prerniurn; for those retiring with over 25 years of service, the County pays the entire healthcare prernium. For active employees, the employee's contributions are based upon negotiated collective bargaining agreements. Employer contributions, for employees, not covered by collective bargaining agreements and for retirees are prescribed by the VIRS, CO[JNTY OF HAWAPI June 30, 2019 Net OP'EB liability —The County's net OFIEB liability was measured as, ofJtjly 1, 201 8,, and the total OP 13 liability used to calculate the net OPEE liability was determined by an actuarial valuation as of that date. There were no changes, between the measurement date, July 1, 2018, and the reporting date, J Line 30, 2019, that are expected to have a significant effect it the net 013EB liability. Actuarial assumptions — The total OP1 liability in the July 1, 2018 actuarial valuation was determined using the following actuarial assumptions, applied to all, periods included in the rneasurerneilit, unless otherwise s,pecifled. Inflation 150% Salary increases 150% - 7.0'0%, including inflation Investment rate of'return 7.00% Healthcare cost trend rates, PPO Initial rates of 6.60%; 6.6% and 9.00%; declining to a rate of 4.86% after 14 years 1 -IM O Initial rate of" .00%; declining to a rate of 4.86% after 14 years Part B & base: monthly Initial rates oF2.00% and 5,0O�%; declining to a rate of contribution 4.70% after 14 years Dental 3,50% Vision 2,50% Life insurance OM% Mortality rates used in the actuarial valuation as of July 1, 2018 were based on the followin& Active members — Multiples of the RP 2014 mortality table for active employees with generational projection using the BB projection table from the year 2014 based on the occupation of the niember. Healthy retirees —'Fhe 2016 Public Retirees of Iiawai'i mortality table, generational projection using the B13 projection table from the year 2016 and with multipliers based on plan and group experience. Disabled retirees- BaseTable for healthy retirees' occupation, set forward 5 years, generational proJection, using the BB projection table from the year 20 1,6. Minimum, mortality rate of 3.5% for males and 2,5% for females. The actuarial assumptions used in the July 1, 20 18 valuation were based on the results of an, actuarial experience study for the five-year period ending June 30, 2015, June 30, 2019 ']'lie long-term expected rate of return on O,PEB plan investments was determined using a building-block method in which best -estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each ma 'por asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected feature real rates of return by the target asset allocation percentage and by adding expected inflation. Tile target allocation and best estimates of arithmetic rates of return for each major asset class are summarized in the following table: Discount rate -The discount rate used to measure the total OPE B liability was 7.010%, Tile projection of cash flows used to determine the discount rate assurned that the County willl fund the recommended actuarially detennined contribution, which is, based on layered, cclosed amortization periods. Based on those assumptions, the OPEB plan's fiduciary net position is projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-tenn expected rate of return on OPE B plan investments was applied to all periods of prcjected benefit payments to determine the total OPER liability. Long -Term Strategic Allocation Target Expected Real. (Risk -Based Classes) Allocation Rate of Return . .............. International Equity . .. .. ... '-, � � .- 17M% ........ ........ .................... _--- 650% UEquity 15M% 5.05% Private Equity I11 Hlea 8.65% Core Real Estate I OM% 4.10% "Trend Following 9M% 3 . 00% U.S. Microcap 7.00% 7.010% Global Options 7.00% 4.50% Private Credit 6wO0% 5.2 5 % Long Treasuries .00% 1,901 % Alternative Risk Premium 5M%145% `TIPS 5M% M5% Core Bonds 100% 1.30% REFFS it. OM% I W00% Discount rate -The discount rate used to measure the total OPE B liability was 7.010%, Tile projection of cash flows used to determine the discount rate assurned that the County willl fund the recommended actuarially detennined contribution, which is, based on layered, cclosed amortization periods. Based on those assumptions, the OPEB plan's fiduciary net position is projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-tenn expected rate of return on OPE B plan investments was applied to all periods of prcjected benefit payments to determine the total OPER liability. COUNTY OF HAWAVI Notes to the Basic Financial Statements ROMMOKU Changes in, the Net t Uability: The fokwing schedule presents the changes, in the net OPE B liability Im the fiscal year ending June 30, 2019: Sensitivitp iffthe net OPER' liahility to changes in the discoasst rate –I'lle following presents the net OPEB liability of the County, as well as what the County's net OPEB liability would be if it were calculated using a discount rate that is 1 -percentage -point lower (6.00%) or 1 - percentage -point -percentage-point higher (8.00%) than tile current discount rate: 1% Decrease Current Discount I % Increase (6,0�0%) Rate (7.001%) (&00%) County's net OPE B liability $ 492,05,2&6 $ 4()(1,834, 1f) $ 329,31 1, 2.1, .Vensithday oj'thnet OPER flabiliV to changes in the healthcare cost trend rales –'Flie following presents the net Cly E3 liability of the County, as well as what the County's net OPE13 liability would be i1' it were calculated using a healthcare cost trend rate that is 1 - percentage -point -percentage-point lower (6.00%) or 1 -percentage -point higher (8.00'/o) than the current discount rate: Current Healthcare Cost I% Decrease 'I"rend Rate 1% Increase County's net OPE B liability $ 325,648M,3 $ 400 $ 498-,68,3,746 - 97'- Increase (Decrease) Total OPE.B Plan Fiduciary Net OPEB Liability Net Position Liability (a) (b) (a) -(b) Balance at June 30, 2018 $_j �17 Z74,,�145�__126J, 0�614 j..32 H— for (lie fiscal yeas,, Service cost 12,,O56,311 12,056,31 1 Interest on the total OPER liability 36,0316,284 36,036,284 Employer contributions, -- 32, 29,0 l3 (32, 29,0 l 3) Net invesuflent inconic 9,47'4,156 (9,474,156) Benefit payments (17,998,013) 17,998,013). -- Adalinistrative expense (29,227) 29,227 Difference between expected and actual experience (3,679,099) (3,679,099) Changes of assuniptions . ........7240 956 . . . . . . . . . . . . ................. 7.240 956 Net changes $ 33 ,656,439 $ 24,21__,99 $ 93 810,5 10 Balance at June 301, 2019 $ 5 5 1,431, 5: $ 1510,596,541 $-A()0034, l 0 Sensitivitp iffthe net OPER' liahility to changes in the discoasst rate –I'lle following presents the net OPEB liability of the County, as well as what the County's net OPEB liability would be if it were calculated using a discount rate that is 1 -percentage -point lower (6.00%) or 1 - percentage -point -percentage-point higher (8.00%) than tile current discount rate: 1% Decrease Current Discount I % Increase (6,0�0%) Rate (7.001%) (&00%) County's net OPE B liability $ 492,05,2&6 $ 4()(1,834, 1f) $ 329,31 1, 2.1, .Vensithday oj'thnet OPER flabiliV to changes in the healthcare cost trend rales –'Flie following presents the net Cly E3 liability of the County, as well as what the County's net OPE13 liability would be i1' it were calculated using a healthcare cost trend rate that is 1 - percentage -point -percentage-point lower (6.00%) or 1 -percentage -point higher (8.00'/o) than the current discount rate: Current Healthcare Cost I% Decrease 'I"rend Rate 1% Increase County's net OPE B liability $ 325,648M,3 $ 400 $ 498-,68,3,746 - 97'- COUNTY OF HAWA VI Notes to the Basic Financial Statements ME= For tine year ended June 30, 2009, the County recognized OPEB expense of $38,719,071 At June 30, 2019, the County reported deferred outnows of resources and deferred inflows, of resources related to pensions frorn the following sources: Deferred Deferrcd Outflows h1flows of of Resources Resources Net difference between expected and actual experience $ — $ 3,146,491 Changes of assuniptions 6,192,712 Net difference between projected and actual earnings on O�PEB plan investnients 1,6,96,370 County contributions, subsequent to the rneasurernent date 39,770 000 J.-.— Total $45.9,62,712 $ 448,42,, 611 $39,770,000 reported as deferred outflows of resources related, to the County's contributions to the OPE B plan subsequent to the ineasurenient date will be recognized as, a reduction of the net OPER )lability in the fiscal year ended June 30, 20M Other aniounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows The EUTF issues a publicly available financial report that includes financial staternents ancll required supplernentary inforniation, which is available on-line at their web -site Nvww,eutf,haLx�aii, gy or by contacting thern at RO. Box 2121, H01101L]ILI, 1-11 96805-2121 Deferred Coin pens ati:o n Plan County ernployees are pern-Ofted to participate in a deferred cornpensation plan of the State of Hawai'i, adopted pursuant to Internal, Revenue Code (IRC) section 457. The plan pennits eligible eniployees to defer a portion oftheir salary until future years by contributing to a fund Net deferred (OfflflONVS) inflows Fiscal Year Endilugj.fqiq 19 2020 $ 42,244 2,021 42,244 2022 42,243 2023 (492,905) 2024 (515,636) Thereafter --A4 �68 Q4 D $, ( 1,34%85 U The EUTF issues a publicly available financial report that includes financial staternents ancll required supplernentary inforniation, which is available on-line at their web -site Nvww,eutf,haLx�aii, gy or by contacting thern at RO. Box 2121, H01101L]ILI, 1-11 96805-2121 Deferred Coin pens ati:o n Plan County ernployees are pern-Ofted to participate in a deferred cornpensation plan of the State of Hawai'i, adopted pursuant to Internal, Revenue Code (IRC) section 457. The plan pennits eligible eniployees to defer a portion oftheir salary until future years by contributing to a fund R4101=1MRIM. a] Notes, to the Basic Financial Statements June 30,, 2019 managed by a plan administrator, The deferred compensation amounts are not available to employees until termination, retirement, death, or unforeseeable ernergency. All plan assets are held in a trust fund to protect them from claims of general creditors and from diversion to any Uses other than paying benefits to participants and beneficiaries. The County has no responsibility for loss due to the investment or failure of investment of funds and assets in the plans, but does have the duty, of due care that would be required of an ordinary prudent investor. 'Therefore, the deferred conipensation plan assets are not reported in the accompanying basic financial statements. 14. COMPONENT UNITI DISCLOSURES Deposits and In:vestmients At ,lune 3�0, 2019, the carrying amount of cash, bane certificates of deposit and money market funds of $5 1,004,073, with bank balances of $52,005,269 were field by the County on behalf of the Department. 'these balances were fully insured or collateralized with securities held by the County's agent in the County's name. The deposits and investments include cash received by the Department that is restricted as to use and is recorded as a restricted asset. Such funds arnounted to $888,225 at June 30, 20 R At June 30, 2019, the Department had: $30,000,000 in investments. Capital Assets "I"he 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, 1.924 to December 3 1, 1949, less accurnulated, 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, l 950 are stated at original cost and include contributions by governmental agencies, private subdividers and customers at their cost or estimated cost. Construction: costs include arnounts for contract work, engineering supervision and other direct and indirect costs. Construction period interest is capitalized On: Utiht)? plan construucted with tax-exempt debt. Depreciation on the Department's utility plant assets in service is computed using the straight-line method over the estimated useful lives of the assets as follows. Structures and improvements 40 to 50 years Machinery and equipment 5 to 25 years Water systenis 10 to 40 years -99- 'rhe capital assets of the Department at June 30, 2019 were as follows: Utility plant in service $508,026,103 Lessaccumulated depreciation —C2.O2-.IUjIjA8) 245,9014,985 Preliminary survey and investigation charges 6,140,398 Construction work in progress 39,306,088 Land and rights ._....J�LQ4,5 9 8 Net capital assets $29,0,, 56,0619 ung-'rerm, Debt The County has issued general obligation bonds on behalf of the Department, The Department is responsible for the payment of the debt service oil these bonds, but the County remains, liable because they are general oNigations of the County. The Department has recorded a liability for these general obligation bonds, which amounted to $24,769,159 at June 30,2019. General obligation bonds payable issued on behalf ofthe Department and other long-term debt at Rine 30, 2019 are comprised of (tie following: Public improvement bonds: 2008 Series A at 4.125:%, due through 2043 2010 Series A at 4.11% to 5 .0%✓ , due through 20120 2010 Series B at 3.,3,3%, to 0.1%� , due through 2030 Total public improvement bonds Public improvenient: refunding, bonds: 2007 Series C at 4.0% to 5.0%, due through 2021 2016 Series B at 3.0,%, to 5.0%, due through 2026 2016 Series E at 2.0% to 5.0%, due thrOUgh 2029 2017 Series C at 4.0% to 5,0%, due through 2019 Revolving fund loans: State revolving fund loans, interest up to 1.37%, due through 2038 Total long-term debt Add: Unamortized prenliurn I I OW $ 123,915 485,,0010 41173Q�Q - -- -QQ 5,338,915 1,250,341 11,257,500 61353,750 568,653 44326655 69,095,814 1,526,866 $70,0122,680 COUNTY OF HAWAII Notes to the Basic Financial Statements F MMMU91M, At June 30, 2019, future principal, and interest payments for long-term debt are scheduled as follows: Fiscal year ending.lune 30: PrinqipW Interest Total 2020 $ 5,613,168 $ 1,819,523 1 7,432,691 2021 5,743,903 1,618,528 7,362,431 2022 5,866,037 1,411,385 7,277 422 2023 4,851,284 1,220,797 6,072,081:1 2024 4,999,266 1,055,397 6,054,663 2025-2029 23,230,779 2,991,555 26,222,334 2030 2034` 12,708,112 827,439 13,535,551 2035 —2039 6,053,548 156,326 6,209,874 2040 - 2044 2971 7 . .................. ...... .. 3J.1 21 . ......................................... - 3.2 838 ................................. . ... . . ... . J__ Taal $09,095,$14 $11,104,07 1 580,199,885 Contributions in Aid of Construction The Department recognized $5,031,723 of contributions in aid ofconstruction for tile fiscal year ended ,Tune 30, 20R MMXE= C!aims andjudkontents — The Department maintains property, auto liability, and general liability insurance policies. Tile Department remains self-insured for workers" compensation and other perils. 'I"he liability at June 30, 2019 for workers' compensation claims of 5,779,000 was estimated based on a combination of case-by-case review and tile application of historical experience to outstanding claims. Construction contracts — The Department is obligated under construction contracts for the utility plant and other projects. Such commitments approximated $43,754,063 at June 30, 2019. Pension liabilities, pension expense, and deferred outflows of resources and diferred inflows of resources related to pensions —rpt .ltine 30, 2019, tile Department reported a liability of $33,522,,053 for its proportionate share of the net, pension liability. The net pension liability was measured as of June 30, 2018, and the total pension liability used to calculate the net pension, liability was determined by an actuarial valuation as of that date. The is epartn,ient's proportion of the net pension liability was based on a projection of the employer contributions to the pension plan relative to projected contributions of all participating employers. COUN'ry OF I IAWAVI Notes to the Basic Financial Statements IMMIKOVII At June 30, 20118, the 1.)eparti-nent's proportion was .25%, which increased by 0.03% from its proportion area tired as Of Rine 30, 2017. For the year ended June 30, 2018, the Departnient recognized pension expense of $5,162,420. At June 30, 2019, the Departrnent reported deferred outflows of resources and deferred inflows of resources related to pensions frorn the following sources: Departs rent contributions subsequent to the rneasurenient date 1, 1......................................... ... Total 7-7. -S-] �2-51,594 The $1,950,328 reported as deferred outflows of resources related to the Departi-nent's contributions to the pension plan, subsequent to the measurement date will be recognized as a reduction of the net pension: I iability in the fiscal year ended June 30, 2020. Other arnounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Deferred Deferred Outflows Outflows Inflows of Fiscal Yeq!L.EndJng-)tine 30, ....... . ..... . of Resources Resources Differences between expected and, actual experience $ 604,656 $ 210,052 Net difference between projected and actual investment 1,299,979 2023, earnings on pension plan investinents -- 173,185 Changes in assumptions 3,6 14,219 -- Changes in proportion, and differences between employer contributions and proportionate share of contributions 3,752,674 868,357 Departs rent contributions subsequent to the rneasurenient date 1, 1......................................... ... Total 7-7. -S-] �2-51,594 The $1,950,328 reported as deferred outflows of resources related to the Departi-nent's contributions to the pension plan, subsequent to the measurement date will be recognized as a reduction of the net pension: I iability in the fiscal year ended June 30, 2020. Other arnounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: $ 6,71 ��,955 Sensifivi(y of the Department's proportionate share qf the net pension liabilio? to changes in the tfiscozint rate -- The following presents the Departnient's proportionate share of"the net pension liability calculated using the discount rate of 7,00%, as well as what its proportionate -102- Net Deferred Outflows (inflows) of Fiscal Yeq!L.EndJng-)tine 30, ....... . ..... . Resources 2020 $ 2,516,812 2021 1,959,638 2022 1,299,979 2023, 664,488 2024 279.038 $ 6,71 ��,955 Sensifivi(y of the Department's proportionate share qf the net pension liabilio? to changes in the tfiscozint rate -- The following presents the Departnient's proportionate share of"the net pension liability calculated using the discount rate of 7,00%, as well as what its proportionate -102- COUNTY OF HAWAVI ammmmim share of the net pension liability would be if it were calculated using a discount rate that is 1- percentage -point lower (6,00%) or I -percentage-point higher (8.00%) than the current rate: 1% Decrease Current Discount 1% Increase (6M%) Rate (7.00%) (8.0(1%) Department's, proportionate share of the net pension liability $ 41,590,009, 33,522,03 $..,25,272,.513 Pension planfilduciary net position — Detailed information about the pension plan's fiduciary net position is available in the separately issued ERS Comprehensive Annual Financial Report that includes Financial statements and required, supplementary information. Pa ables to the pension plan At ,lune 30, 2019, the annual amount payable to the ERS y totaled $ 106,258, which represents the employer contribution for the month of June 2019, as required by FIRS. Net OPER liability, OPEB expense, anddeferred ou#7ows of resources and deferred inflows of resources related it) OPEB — At June 30, 2019, the Department reported a net OP 13. liability of $16,43 1,746. The net OPEB liability was measured as of July 1, 2018, and the total OP EB liability used to calculate tile net OPEE liability was determined by an actuarial valuation as of that date. For the year ended June 30, 2019, the Department recognized OPEB expense of $1,691,200, At June 30, 2019, the Department reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows Inflows of of R q s o u r.c..e s Resources .3... Net difference between expected and actual experience $ $ 1,005,637 Changes ofasSUMptiOnS 367,012 Net difference between projected and actual earnings on, OPEB plan investments 188,871 Employer contributions subsequent to the measurement date . . .......1 f1 QQ . . .......................................................... 'Total $ 2P35,7,01,2 $ 1,194,508 $ 1,990,000 reported as deferred outflows of resources related to the Department's contributions to the OPER plan subsequent to the tricasurement date wi H be recognized as a reduction of the net OPEB liability in the fiscal year ended June 30, 20211. COUNTY OF HAWAYI QUIT WMIM, June 30, 2019 Oflier amounts reported as deferred otriflows of resources and deferred inflows, of" resources related to, pensions will be recognized in pension expense as follows: Sensftivioof the itet OPEB liahilit), to chatiges in the (liscount rate --- I'lie following presents flie net OPE, B liability of the Department, as well as what die Department's net OPEB liability w�ould be i f it were calcolated, using as discount rate that is I -pereentage-point lower (6.00%) oi- 1 -percentage-point li iglier (&00%) flian flie current discount rate: I 04o Decrease Current Discount I% Increase (6.00%) Rate (7.00%) (8.00%) Departnient's net OPEB liability_ LMWUi—IMILIA6 $ I,ZJ91,8100 Setisitivity of the tret OPEB liability to ch,aitges hi the healthcare cost treiid rates The following presents, flie net OPER liability of the Department, as Avell as wilat the Departnierit's net OPEB liability woWd be if it were calculated Using a liealfficare coast trend rate that is I- pereentage-point lower (6.00%) or I -percentage-point Iiiglier (8.00%) than the current discount rate: Current Heals care Cost I% Decrease Trend Rate l % Increase Department's net OP EB liability $=� 4 41 $ 1, 6,4�1 6 WJ_ 1 7 46 1=22.Z4� Tlie BAT issues a publicly avai kable financial report that includes financial, statements and required supplementary iriffirmation, wbicli is available on-line at flieir web -site !�nvw....... xutfjimvaii. QY or by contacting tbern at P.0Bo , x2121, Honolulu9 , HI '680�5-2121, ...... . Net Deferred OUtflONVS (Inflows) of Fiscal Year EndingjqLie 3Q Resources 2020 $ (175,635) 2021 ( 175,635) 2022 (175,637) 2023 (115,920) 2024 (113,489) Tliereafter _771..,1 8.9) ( 71,496) Sensftivioof the itet OPEB liahilit), to chatiges in the (liscount rate --- I'lie following presents flie net OPE, B liability of the Department, as well as what die Department's net OPEB liability w�ould be i f it were calcolated, using as discount rate that is I -pereentage-point lower (6.00%) oi- 1 -percentage-point li iglier (&00%) flian flie current discount rate: I 04o Decrease Current Discount I% Increase (6.00%) Rate (7.00%) (8.00%) Departnient's net OPEB liability_ LMWUi—IMILIA6 $ I,ZJ91,8100 Setisitivity of the tret OPEB liability to ch,aitges hi the healthcare cost treiid rates The following presents, flie net OPER liability of the Department, as Avell as wilat the Departnierit's net OPEB liability woWd be if it were calculated Using a liealfficare coast trend rate that is I- pereentage-point lower (6.00%) or I -percentage-point Iiiglier (8.00%) than the current discount rate: Current Heals care Cost I% Decrease Trend Rate l % Increase Department's net OP EB liability $=� 4 41 $ 1, 6,4�1 6 WJ_ 1 7 46 1=22.Z4� Tlie BAT issues a publicly avai kable financial report that includes financial, statements and required supplementary iriffirmation, wbicli is available on-line at flieir web -site !�nvw....... xutfjimvaii. QY or by contacting tbern at P.0Bo , x2121, Honolulu9 , HI '680�5-2121, ...... . COUNTY OF HAWAN Notes to the Basic Financial Statements June 30, 2019 Prior Period Adjustment 'I he financial statements of the Departruent for the fiscal' year ended June 30, 2018 contained an, error related to capital assessment fees, which were recorded incorrectly as a liability. These balances should have been treated as an exchange -type transaction w1wre revenues are recorded when measurable and probable of collection. An adJusttnent was made to reduce non-current custoiner deposits and increase Unrestricted net position by $1,641,537 as of June 3 , 2018. Beginning net position as ofJuly 1, 2017 was a I so increased by $1,641,5:3'7'. IIIIJUMMINEWMIM Required Supplementary Information June 30, 2019 Schedule of Changes in the Net OPEB Liability and Related Ratios Last 10 Fiscal, Years* Net OPE B liability Plan fidticiary net position as a percentage of the total OPEB liability Covered-erriployee payroll Net OP EB liability as a percentage of Covered -cinployee payroll $ 400,834,8 10 $ 16,,4'31,746 27.3% 51.3'% S 174,190,644 $ 10,2,12,595 230,�i % 160,,9,% 20,19 County Departinent 'row OP,EB, Liability Service Cost 12,056,311 698,126 Interest oil fie total OP,EB liability 36,036,284 2,264,524 Benefit payrnents 17,9,9 8,0113) (1,016,548) Difference between expected and actual experience (3J,679,099) (1,184,3 47) Change in assi,iniptions . ..... . .. ---1249.195-6 . ...... . L3 IM Net change in total O1 PEB liability 33,656,439 1,193,988 Total OPPB liability - Beginning 517,774 !.� 4 Total OPEB liability - Ending $ 55 1,431,353 fa 33,703,543 Plan Fiduciai-y net position ContribLitions - ernployer $ 32,829,013 $1,936,548 Net investment inconie 9,474,156 1,111,30'6' Benefit payinents (17,998,013) (1,016,548) Adininistrative expense '127) _- 3., 6) — L jL Net change in plan fidticiary net position 24,275,929 2,027,970 Plan fidLiciary net position - Beginning 126,320,6 14 15,243,827 Plan fidticiary net position - Ending $ 150,596,543 $ 17,271,797 Net OPE B liability Plan fidticiary net position as a percentage of the total OPEB liability Covered-erriployee payroll Net OP EB liability as a percentage of Covered -cinployee payroll $ 400,834,8 10 $ 16,,4'31,746 27.3% 51.3'% S 174,190,644 $ 10,2,12,595 230,�i % 160,,9,% COUN'ry Off' HAW AII Required Supplementary Information June 30, 2019 Net OPEB liability $ 391,454,300 $ 17,265,728 Plan fiduciary net position as a percentage of the total OPEB liability AMEMEMESEMMM Net OPE B liability as a percentage of Cove red -ern p loyee payroll 24.4% 46.90"16 $ 168,570,640 $ 9,791,132 232.22% 176.34'Vo * This schedule is intended to present information for 10 years, as of the measurement date of the collective net OPER liability for each respective fiscal year. Additional years will be built prospectively as information becomes available. See accompanying notes to required supplementary information 2018 County Departmen Total OPEB Liability Service Cost $ 11,757,502 $ 687,414 Interest on the total OPER liability 34,046,407 2,13 5,49O Benefit payrnefltS . . . ................(1.1%U110 . . ............... 12.5.3 1,2 n Net change in total )P 13 liability 28,748,922 1,869,616 Total OPER liability - Beginning 489,025,992 30,639,939 Total OPE B liability - Ending $ 517,774,914 $ 32,509,555 Plan fiduciary net position Contributions - employer $ 28,549,987 $1,867,788 Net investment income 10,380,705 1,245,946 Benefit payments (17,054,987) (953,288) Administrative expense (23,228) (2,782) Other. ......................................... 266A 5 7 .... ..... . . .. .... . .. ...... Net change in plan fiduciary net position 22,118,934 2,174,034 Plan fiduciary net position - Beginning 104,201,680 13,069,793 Plan, fiduciary net position - Ending $ 126,320,614 $ 15,243,827 Net OPEB liability $ 391,454,300 $ 17,265,728 Plan fiduciary net position as a percentage of the total OPEB liability AMEMEMESEMMM Net OPE B liability as a percentage of Cove red -ern p loyee payroll 24.4% 46.90"16 $ 168,570,640 $ 9,791,132 232.22% 176.34'Vo * This schedule is intended to present information for 10 years, as of the measurement date of the collective net OPER liability for each respective fiscal year. Additional years will be built prospectively as information becomes available. See accompanying notes to required supplementary information COUN'ry OF HAWAII Required Supplementary Information June 30, 2019 Schedule of Contributions (OP B) Last 10 Fiscal Years riraiectt -- --------- --------- - - ---------------- ----------------- ---- ----- Contributions ------ - Contributions in Relation to as a ',�oage Actuarially the Actuarially Contribution Covereti- of'Covered- Fiscal Year Detennined Deterrnined Deficiency Einplq,ee Fniployee Ended Contribution Contribution (Excess)__ Pa _wLH . . ...... . ___y .............. . . . . Payroll June 30, $ 1,990,000 $ 1,990,000 $ -- $10,829,700 221% June 30, 20118 $ 37,748,0100 $ 32,829,013 --- $ 4,918,987 $ 174,190,644 1 &Po J Line 301, 2017 $ 36,472,0010 $ 28,549,987 $ 7,922,013 $ 168,570,640 .. . . . . . .......... . 16.9% .... ........... . . . . . ..... . . . . ............ June 30, 2.0116' $ 33,614,000 $ 22,747,340 $ 10,866,660 $ 159,744,324 142/,o June 3�0, 24115 . ........... .. .. . . .. .. - --------------- ----- -- - $ 32,,478,000 ----------------- . ........... . ... . $ 18,657,,000 $ 13,821,000 . . .. . . . . ................. ... -- $ 152,490,296 ------------ -- 112% -- Jurie 30, 20,1,4 30,526,000 $ 17,45MOO $ 13,0,73,000 $ 139,423,481 12.5% June 30, 201:3 $ 29,494,0 ,0,0 $ 13,892,000 $ 15,602,000 $ 13,0,8013,306 M6% ---- - ------------- - June 30, 2012 $ 36,193,0010 $ 13,730,000m. $ 22,463,000 $ 124,452,126 1:1 1 M% June 30, 2011 $ 34,9��,9,99 $ 31,104,000 M.$ 3,865,000 $ 127,859�,606 243% . .... - -------------- -- JJ�ej0l,2010j� - 1- -1-11-1 -- - . ...... .. 2 4 $ 28,182.000 - - -1-..... 3,136,OOOL ..... .. . .. . .... . $ 1312555,000"''L . . ............. . . . .. 21.1% ............ . - - riraiectt - ---------------------------------- Contributions ------ Contributions in Relation to as a %agc Actuarially the Actuarially Contribution Covereel- of Covered - Fiscal Year Deterinined Deterinined Deficiency Fnipl,�,vee Emplolyee Ended Contribution Contribution (Excess) payroll I I June 30, 2019 $ 1,990,000 $ 1,990,000 $ -- $10,829,700 1&4% J tine 3Q, 2018 $ 1,933,000 $ 1,,936,548 1548) $10,2 12,595 19.0% June 30, 2017 $ 1,867,000 $ 1,867,788 ($ 788) - $9,791,132 --------------- - 19.1% June 30, 2016 $ 914,000 $ 1,9 13,204 $ 796 $9,464,649 20,2% .June 30, 2015 $ 1,850,000 $ 1,848,389 $ 1,611 $9,426,509 19.6% June 30, 2014 $ 1,899,000 $ 1,900,758 ($ 1,758) $8,635,402 22.0:% June 30, 2013 $ 1,834,000 $ 1,833,733 $ 2..67 $ 7,9,66,529 210% June 301, 2012 $ 2,400,000 $ 2,4011,487 ($ 1,487 $ 8,182,968 June 30, 2011 $ 2,319,000 $ 2,067,678 $ 251,322 - $8,056,398 1 1 11 - 25 70yo June 30, 2010 $ 1,607,000 . . . . . . ... . . ...... $ 1,963,719 ($ 356,7 . I 9) $ 9, 4 5 9,75ij [::12� g, % See accompanying notes to required supplementary infori-nation COUNTY OF HAWAII Required Supplementary Information Note — Significant Methods and Assumptions Beginning July 1, 2017, an actuarial valuation of the County's and Depart ment's liability associated with other posternployment benefits other than pension provided through the ELJTF is performed as of July I of each year. The following summarizes the significant methods and asSUmptiom used to determine the actuarially determined contribution for the fiscal year ended June 30, 2011 Actuarial valuation date July 1, 2017 Actuarial cost method Entry Age Normal Amortization rnethod Level pet -cent, closed Equivalent single aniortization period 20,.2 and 18.9 for the County and Department, respectively Asset valuation method Market Inflation rate 150% Investirient, rate of return 7.00% Payroll growth 150% Salary increases 3.50% to 7.00% including inflation l4ealthcare cost trend rates 11130 Initial rates of 6.60%, 6.60% and 9.00%; declining to a rate of'4,86% after 14 years I.-IM0 Initial rate of 9.00,%; declining to a rate of 4.861/16 after 14 years Part B Initial rate of 2,00% and 5.00%; declining to a rate of 4.70% of 14 years Dental 3.50% Vision 2.50% Life Insurance 07,070% COUNTY OF HAWAII Required Supplementary Information UMBERS= Dernographic assumptions Based on the experience study covering the five year period ending June 30, 2015 conducted for the Hawaii Employees' Retirement System Systern-specific mortality tables Participation rates 98% healthcare participation assumption for retirees that receive 100% of the Base Monthly Compensation. Healthcare participation rates of 25%, 65%, and 90% for retirees that receive 0%, 50%, or 75% of" the base monthly contribution, respectively. 100% for life insurance and 98% for Medicare Part B. There were no other factors that significantly affected, trends in the amounts reported in the schedule of changes in the net OPEB liability and related ratios or the schedule of contributions (OPEB). COUNTY CSI" HAWAII Required Supplementary Information June 30!, 2019 Sched,ule of the County's and Department's Proportionate Share of the Net Pension Uability (ERS) Last 10 Fiscal Years 3= * This schedule is intended to present information for 10 years, as of the measurement date ofthe collective net pension liability for each respective fiscal year. Additional years Nvill be built prospectively as information becomes available, See accompanying notes to req,ui,red SUpplernentary information Proportionate Proportionate Share of tile Plan Share of the County's County's Department's Net Pension I'iduciary Net Proportion of Proportionate Liability as a Position as a the Net Share of the County's %age of %age of the Measurement Pension Net Pension Covered Covered Total Pension Period Ended . . Liabil��X(%) Liab±lity (1) Pa Yoil l- Pa ro I I Liabili !� ... ... . ............... June 30, 2018 . . . 4.8% $63 5,693,50 1 S 16 8,484,8 80 .—I - - 377.3% - - .-– 55.48% June 30, 2017 4.7% $609,904,199 163,626,447 3717% 54,8% June 30, 2016 4.6% $618,129,088 $156,556,514 394.8% 5L2% June 30, 2015 4.4% $382,070,813 $149,760,317 255,1% 614% June 30, 2014 4.0% $322,626,262 $137,669,418 234.3% 63.9% June 30, 2013 4.2% $377,065,856 $ 129,153,763 292.0% 58,0% * This schedule is intended to present information for 10 years, as of the measurement date ofthe collective net pension liability for each respective fiscal year. Additional years Nvill be built prospectively as information becomes available, See accompanying notes to req,ui,red SUpplernentary information Proportionate Share of the Plan Department's Departi-rient's Net Pension Fiduciary Net Proportion of Proportionate Liability as a Position as a tile Net Share of' the Departi'vient's %age of %a ;e of the Measurernent Pension Net Pension Covered Covered Total; Pension Period Ended Liabi..Ht , (%) __ .. . ................ _.__..0.3%®' Liabilq ($) . ...... ...................................... ol Pa rl . . . . ...... -Y .. . . . . . ..................................................... P�,yroll -.-. . . . . . ...................................................... Liab .ilit . ..... --y .................... June 30, 2018 $ 33,522,053 $ 9,742,400 344.1% 55.48% .]Line 30, 20117 0.2% $ 28,365,453 $ 9,358,187 303.1% 54.8% June 30, 2016 0.2% $ 29,247,607 $ 9,046,930 3233% 51.2% June 30, 2015 0.2% $ 18,940,065 $ 9,012,196 2101% 614% June 30, 20 14 03% $ 20,526,993 $ 8,272,307 248'.1% 619% June 30, 2013 02% $ 18,469,400 $ 7,640,477 241.7% 58.0% * This schedule is intended to present information for 10 years, as of the measurement date ofthe collective net pension liability for each respective fiscal year. Additional years Nvill be built prospectively as information becomes available, See accompanying notes to req,ui,red SUpplernentary information COUNTY OF HAWAII Required Supplementary Information Julie 30 2019 M= Schedule of the Employer Pension Contributions (ERS) I..,ast Ten Fiscal Years Actual, Actual County Contributions Statutorily Contributions Contribution as a %age of Fiscal Year Required Recognized County County's Covered Ended Contributions Statutorily Contributions Contribution Coed ayr�?,Ill1'a !� roll as a %age of Fiscal Year Required Recognized Deficiency $ County's Covered Ended ------------------------------------ Contribution bLthe Plan (Excess) --r d Panil CovereNi P a ofl .lane 30, 2019 $ 44,853,953 9,742,400 44,853,953 $ $ 172,197,101 26.0% June 30, 2018 $ 41,562,933 $ 41,562,933 $ $ 168,484,880 24.7% June 30, 2017 $ 36,157,981 $ 36,157,981 $ $ 163,626,447 22.1% June 30, 2016 $ 34,013,001 $ 34,013,001 $ $ 156,55'6,514 21.7% June 30, 2015 $ 31,456,148 $ 31,456,148 $ $ 149,760,317 21,0% June 3 0, 2014 $ 26,503,830 $ 26,503,830 $ $ 137„6'69,418 193% June 30, 2013 $ 23,763,101 $ 23,763,101 $ $ 129,153,763 18A% June 30, 2012 20,884,021 $ 20,884,021 $ -- $ 123,218,017 16x9% June 30, 2011 21,424,642 $ 21,424,642 $ $ 126,714,584 16.9% June 30, 2010 22,120,137 $ 22,120,137 $ $ 132,253,481 16.7% Actual County Contributions Statutorily Contributions Contribution as a %age of Fiscal Year Required Recognized Deficiency County's Covered Ended Contribution by the Plan (Excess)ver Coed ayr�?,Ill1'a !� roll June 30, 2019 $ 1,950,358 $ 1,950,358 $ ........... . .... . . . $ . _—.. 10,318,136 l&9% June 30, 2018 $ 1,757,461 $ 1,757,461 $ $ 9,742,400 18.0% June 30, 2017 $ 1,603,278 $ 1,603,278 $ mm $ 9,358,187 17.1% .June 30, 2016 $ 1,553,128 $ 1,553,128 $ $ 9,046,930 172% June 30, 2015 $ 1,520,994 $ 1,520,994 $ $ 9,012,196 16.9% June 30, 2014 $ 1,664,580 $ 1,664,580 $ $ 8,272,307 20.1% June 30, 2013 $ 1,214,933 $ 1,214,933 $ $ 7,640,477 15.9% June 30, 2012 $ 1,210,106 $ 1,210,106 $ $ 7,849,473 15 A% June 30, 2011 $ 1,197,031 $ 1,197,031 $ $ 7,726,278 15.5% .lune 3 0, 2010 $ 1,417,853 $ 1,417,853 $ $ 9,076,143 15.6% See accornpanying notes to required supplementary inf'ori-nation, �l COUNTY OF HAWAII Required Supplementary Information URMBDIKM Note — Changes of Assumiptions There were no changes of assurnptions or other inputs, that significantly affected the tneasurenient of the total pension liability since the ineasurernent period ended June 30t , 2016. Arnounts reported in the schedule ofthe proportionate share of the net pension liability as of the measurement period ended June 30, 20 16 (fiscal year ended June 30, 201 7) were significantly impacted by the following changes of actuarial assurriptions: The investnient return assumption decreased from 7. % to 7.00%. Mortality assumptions were niodified to assurne longer life expectancies as well as to, reflect continuous niortality irnprovenient. Prior to the rneasurcinent period ended June 30, 2016 (fiscal year ended June 30, 2017), there were no other factors, including the use of different assumptions that significantly affect trends reported in these schedules, COUNTY OF IA "A11 June 30, 2019 mum�� Sched,ule of Changes in, Total Pension Liability (Bandsmen Pension) Last Tell Fiscal Years* Memuremnt year ending June 30, Total Pension Liability Service Cost Interest oil the Total Pension Liability Differences between expected and actual experience Assumption Changes Benefit Pay lents Net Change in, Total Pension Liability Total Pension Liability Beginning Total, Pension Liability – Ending Covered Employee Payroll Total Pension Liability as a Percentage of Covered Employee Payroll 201.9., ..20..1....8 20 17.1 $ 7,392 S $ 16,416 38,149 36,289 (89,947) -- (44,293) (113,807) —A4-7 2) (58,808) 5,33471 .�j --L — (136,231) (58,808) (114,449) 1,087,972 1,146,780 1,261,229 �51,741 $J,0187,97Z $ 1,,1 ,?8() $ 26,349 $ 49,505 $ 49,505 * This schedule is intended to present information for 10 years, as of tile measurement data of tile total pension liability for each respective fiscal year, Additional years will be built prospectively as information becomes available. See accompanying notes to required supplementary information MEE NONMAJOR C"rOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS HIGHWA Y FUND - Used to account for the costs, of maintaining the County's highmays, and streets. Financing is provided primarily by fuel, motor vehicle weight and public utility franchise taxes, SEWER FUND - Used to account for costs of operating the County's various sewer systems, Financing is provided by charges to users for sewer services, SOLID WASTE' FUND Used to accumtdate moneys for the operation, nianitenance, and, administration of the County's solid waste inanagenient, collection and disposal systerns. Financing is provided by tipping fees at the landfills and by disposal permit fees. CEMETERY FUND - Used to accurntdate moneys to guarantee the future maintenance oft aunty cemetery' sites. Financing is provided from the sale of burial lots in County cemeteries. I"ARKING AIETER 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, VEHICLF DISPOSAL FUND - Used to accumulate rnoneys for the towing, removal„ disposal and recycling of abandoned or discarded automobiles and aultornobile parts. l"inancing is provided by annual fees collected with motor vehicle registrations, BIKEHIA Y FUND - Used to accumulate moneys for the construction of b,ikeways within the County. Financing is provided by, bicycle license fees, HIORKFORCIT INVESTMENTACTFUND - Used to account for employment and training services provided to economically disadvantaged adults, dislocated workers and youth. Financing is provided by federal grants, GOLF COUI?SE FUND - Used to account for the cost of operating the Hilo Municipal Golf Course, FUnding is provided frorn green fees ands payments from restaurant and pro shop concessionaires. GEOTHERMAL RELOCA770N AND COMMUNIT)'BENLY77S FUND - Used to account for the County's share of geoffiermal resource royalties received frown the operator of a geothermal power plant located in, tile County, The funds are earimrked for a geothermal relocation program and to benefit the lower Puna area. 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. HAWAII COUNTY HOUSING AGENCY'- Used to account for Federal and County moneys used to provide public housing, assistance within the County. PARK DE' ICA71ON FUND - Used to account for moneys deposited with the County by subdividers, to provide land for parks and playgrounds inskjbdivisions, GENLRALEXCISE TAX FUND, Used to account for moneys collected fu-om the general excise tax surcharge. SHORT-TERA,11,'I�l(.'A77ONREN7'ALE,NFORCEA4EN7'Ft,IND Used to account for cost of enforcing County's short-term vacation rental enforcement laws. Financing is provided by all fees and fines collected in connection with the law. DEBT SERVICE FUND INTERESTFUND - Used to accurnutate moneys for payment of interest on general obligation bonds. Moneys required to service interest maturities are transferred anm.Wly Froin the General Fund. BOND REDEMPTION FUND - Used to accunIUWC moneys for the payment of general obligation bonds. Moneys required to retire the bonds are transferred from the General Fund one year in advance of maturity. This page intentionally left blatik, Em COUN"ry OF HAWAII Nonmajor Governmental Funds Combining Balance Sheet June 30, 7f1'19 Special Revenue Funds Solid Parking Highway Sewer Waste Cenietery Meter. Fund ["and Fund Fund Fund Assets Cash and cash eqtfivalents S 13,0113 ,770 9,44 ,479 $ 4,363,536 $152,409 $299,059 Investments - - - Iniprem (fund - 400 250 Receivables: Due from Other goverrinmit's 3,948,401 172,910 541,470 Due front other governmental funds 377,964 86,086 52,373 Due from other nongovernmental funds - 3,500 - Trade, net ofallowance for doubtfull accoun� s 1,626,672 t,557,4 14 Real estate held for sale - Other' 4,326,365 1,889,168 2,151,257 --------- - Total assets $17,,416,135 1 1,338,047 $ 16,515,043 $152,409 S 299,059 Liabilities, Deferred Inflows and Fund Balances Uabilitim Accounts payable $ t,161,355 202,t 0 1 $ 2,477,330 $ - $ - Accrued payroll 589,841 2 t 8,327 404,034 Due to other governmental funds 808,850 484,752 8,27,239 Advance Collectioii!s-iiitergoveri,tr,iietiitaI - - 11,998 Other 28 80,428 31 Total liabilities 2,560,O74 l,04-5,608 3,720,632 .................. . . Deferred Inflows of Resources Unavailable Revuritm l,626,672 l,557,414 . .............. Fund balances: Restricted for: Debt servuce - Highways, streets and abandoned vehicles 14,856,061 Housing and rental assistance - Committed to: Sanitafion 8,665,767 111,236,997 - I-fighways, streets and abandoned vehicles 299,1059 ,ental assistance and subsidy - - Cemetery 52,409 Lower Puna a rea Parks and recreational projects Unassigned - ToW fund balances 14,856,016 . ... ......... . 8,665,767 -- ----- ----- 1 1,236,99�7 52,409 299,059 Total liabilities, deferred inflows and fund balances $17,416,135 $11,338,047 $16,515„04:3 $152,409 $'7c,9,05 650,370 465,683 - 1,31 11,609 1 0,366,765 - 1,253,946 4,27/4,235 - 9 051 (22, 5u 10,366,765 650,370 4,274,235 465,683 2,565,555 91,351 ............... $111 ,623,273 $ 650,370 $ 233,940 $ 32,063 S 4,274,235 $ 486,875 $ .3,21'V11 91,35 (Confinued) - 117 - special RevenUe, Funds Vehicle WorWbrct Goff Cieolhomfl IWXC Bend- lawaii Counly Park Disposal Bikeway hmo,mwa & Course & Communny fication Housing Dedcation Fund Fwndwwwwww. Fqnd,, Fund BenOIs Fund .... .... Fund FmIld ------ --- ---- ------------- S 0,623,273 S 65O,370 S S 28,068 $ 4,274,235 $ 486,875 S 2,868,787 $ 29,438 - 61,727 2,00'O 800 - 194,,949, 43,3241 139,356 38,991 l,9956 ............... . .......... . �,447 186 - -------------------------- -- . . . . . . . . . . . ...... .............. . .......... .. ..... 233,940 �,995 ...... 344,127 186 .......... . . -- -- $10,623,273 $ 650,370 $ 233,940 S 32,06,3 S 4,274,235 $ 48�6,875 $ 3,2 9 3,714 S 91,35 -2- $ 196,737 $ S 1,997 $ 2,760 S $ 2,367 S 69,811'' 6,356 - 51,913'13 1!1 55,160 53,415 231,943 18,825 5 7,4 59 - - - - - ------------ 309,219 256,508 - 23 3,9,40 - --------- - 54,660 - - - - - - ------------------ - - - - 2 192 5�9 1,,649 ............ ............... . . 56,510 . . ............................... ------------ . ....... 650,370 465,683 - 1,31 11,609 1 0,366,765 - 1,253,946 4,27/4,235 - 9 051 (22, 5u 10,366,765 650,370 4,274,235 465,683 2,565,555 91,351 ............... $111 ,623,273 $ 650,370 $ 233,940 $ 32,063 S 4,274,235 $ 486,875 $ .3,21'V11 91,35 (Confinued) - 117 - COUNTY Oaf HAWAII Nortmajor Governmental Funds Combining Mance Sheet June 30, 201 (Concluded) See accompanying indcpendent iuditors'report, pecial Revenue Funds, Debt Service Fund Total General Short-terrn Band Nonnia'IM, Excise Vacation Renud Irderest Redemption Governmental Tax Fund ITuforcemew Fund Fu n d F u n d'i Funds Assets Cash and cash equivalents 257,0137 $3,7013,121 S 8,493,339 $ 68,7tu7,791(,i I nivestme nt$ 2 1,255,026 2 1,316,753 Intprest fund, 3,450 Rcceivables: Due frorn other govenirnents 8,641,986 13,643,040, Due froni other governmental, funds 16 655,795 Due froin other nongoven-uriental funds 3,500 'I'radie, ncofallowance for cloubfful accouf% 3,184,086 Real estate 1ue1d for sale Offier 8,07'2 110,691 8,641,98!68,072 16 17,597,1 12 Total assets $8,64 1,986 $ 257,037 $3,711, 193 $29,748,38 S 07,685,11 l Liabilities, Deferred Inflows and Fund Balances Liabilities: Accounts payable 1 2,847 $ - S $ $ 4,277,30,5 Accrued payroll 5,886 1,431,504 Due to Other governmental funds 2,497,958 - 16 4,980,457 Advance Colections-Intergoverr'iniientail e - - 11,99 Other - - 63,19 ,9 185,000 637,905 Total liabilifles, 2,6001,805 5,886 63,215 185,000 11 , 339169 Deferred inflows of'Resources Unavailable Revenue - - - 3,240,596 Fund balances: Restricted for: DO)t service - 3,647,978 29,563,381 33,21 1,359 11 igh%vauys, strects, and abandoned veli icles 61,041,181 - - 22,0 13,295 Housing and rental assistance 25 1, 151 1,562,760 Committed to: Sanitation 19,902,764 11 ighmays, strects, and abandioned vehicles 0,665,824 Rental assistance and subsidy 1,253,946 Cemetery 152,409 Lower Puna area 4,274,235 Parks and recreational projects 91,351 Unassigned (22,597) ........ .. ... Total fund balances 6, 41 1.8.1.. 81 251,151 3,647,978 291,563,3 81 93,1 05,346 Total habiMies, def�crred innoNvs and fund balances $8,641,986 257,037 SM IIJ 93 $29,748,3 81 $ 107,685,111 See accompanying indcpendent iuditors'report, mm COUNTY OF HAWAII Nonmajor Governniental Funds, Combining Statement of ReVellUes, Expenditures, and Changes in Fund Balances For the F"iscal Year Ended June 30, 2019 Revenues Fuel taxes, Public Lidhty franchise taxes, Licenses 'In(] pernlits General excise tax surcharge Intergovernmental Charges for services Investment earnings (doss) other Total revenues Expenditures Current: (3eneral Government Public safety Highways and streets 1-lealt9-u, educativan and welfare Culture and recreation Sanitation Pension and retirement contributions Employees' 1walth insurance Other Debt service: Principal Interest `I I cial expenditures Excess (deficiency) of revenues over (under) expenditures Other Financing Sources (Uses) Transfers in Increases in capital leases r ransfers out l'oW other financing sources (uses) Net change in ftind balances Fund balances at beginning olf year Fund balances at end of year 9 1,509 Sri je c ia d IZ eviitiie=ds 8,303,956 Solid Parking 1--lighway Sewer Waste Cemetery Meter Fund Fund Fund Fund Fund 17,343,326 S 297,319 S S 91,441,986 181,8917 324,356 - 713,726 12,4919,695 Ij 15,904 - 66,725 1,123 2,803,419 155,529: 756,540 101,332,75 36,11 �284 - 7,788,531 15,143,943 20101;301 03% 89 20,294 929,727 I X491 187,612 l 01, 5 O1O - 43,0118',1.53 43,018,153 7,945,55 l I 6,08 ,O 5 10,500 20,294 9 1,509 8,303,956 22,441,306 8, 99,,611115 3 1,9172,5 19 - 2655j 16 2 6a55j 844,757 1,781,234 - 1, l 98,162 297,319 802,836 - 9111,503 181,8917 324,356 - 713,726 8,056 Ij 15,904 - 66,725 1,123 121,435 - ..... . ............ 36,382,003 101,332,75 36,11 �284 - 6,636,150 21296 20101;301 03% 89 10,50 0 201,294 --11-11 – — ............. . . 2,987,914 19,281,770 1,3,56,644 - 2,936,76 t Jjl.L��zgj.) 2��9'" 8 - 7,' 9 4 ' ' 22,2 ' I - 8 531 4,474,749 6010,708 2,18�8,342 101,50101 20,294 101, 3 8 1,3 12 8,"1655 015u1 910'1413,555', 111,909 278,765 _I_ , $ 14,856,061 S 8,665,767 $ 11,236,997 S 152,409 $299,059 - 120- 46,832 µ w Sj.iecjM Revenue Funds -iTe-aut - Vehicle W(Afwc Golf' ciewhenuM Rvloc i - I lawaii Coumy Park D�ispo�sal Bikeway Inacmakon Course & Community fication Housing Dedication Fund - --------- Fund oppqL� Fund Benc�ro Fund - --------- F', u n d Fund $ $ $ $ - 112,525 s 2,444,784 45,952 2013,753 8,168 689,797 ... ........ . 5,097 . . . ...... . 20,724,490 58 ------ --- 0,4303 0,73'3,2 0 6 46,832 ..... . ..... 643,737 . ............... 320, 55 .............. 22,432,378 ............. ............. 753,676,2,052 .......... - 1 j� LM Z, 70) i 2,817 2,809 35,978 W - --------- - - ----- . . .. ............ 21,052 . . . . ............ ------ 65-1,678 . . .. . .. ......... . . - .............. . 2,486,892 45,952 689,797 6�43,737 2,1052 5 2013 '-3 2'.1,18 4, () 8 2,809 . . ..... -111,11-1- 1 -1 46,832 µ w 236,394 - 68,6,989 21,371,408 - 1,109,,748 83,761 1,691,082 - - - 28,795 2,8018 231,567 F 71 7,'077 3,339 - 112,525 335,007 32,230 8,168 ... ........ . 5,097 . . . ...... . . . . . ........... .. - 1-1 - - ------ 58 ------ --- 0,73'3,2 0 6 46,832 ..... . ..... 689,797 1,49 Ij 6�7 . ............... 320, 55 .............. 22,432,378 ............. ............. 753,676,2,052 .......... 1 j� LM Z, 70) i 2,80143 760,368 1,256,200 100,320 - .................... - - ----- . ..... 860,688 . ................ --- .................... - - -------- ............. . ............ �,256.200 - - ---------------- 753,676 (88'O'), 13,258 2,052 f 0 16,4 02) 208,807 2,8109 9,613,0189 651,250, - - --------------------- 5 4,2 7 2,18 3 . . .... 582,085 3 2, 56,748 88,542 $ 10,366,765� 650,370� S S 4,274,235 465,683 2,565,555 S 9 351 (Continued) Revenues I`uel taxes Pubk Lifflity Franchise taxes Licenses and permits General excise tax surcharge Intergovernmental Charges for services Itivestment earnings, (loss) Other Total revenues COUNTY OF HAWAI I Nonmajor Governmental Funds Combining Statement of Revenues, F-Apenditures, arid Changes in Fund Balances For the Fiscal Year Ended June 30, 2019 (Concluded) Special Revenue Funds Debt Service Fund Total CieneraF— Short-term Bond Nonmajor Excise Vacation Rental Interest Redemption Governinenud Tax Fund, Enforceniem Fund Fund FUndFunds .... . ......... - -, . .. .. . ..... $ Pension and retirements contributions 78,840,223 $ 1 7,343,326 29,5613,381 Other 9,441,986 270,000 1 5,464,184 12,518,,126 - - l 2,5 18,126 olver (u nder), expend � t tires 358,215 d5, 487,9913 Transfers in - 23,602,635 Transfle,rs Out 58,7'25 64,351 j Net change in fund balances - — - -------- - — -------- - �,825,038 -------- - - 1 2518,11(105,74 270,00O 416,9401 7,636 .......... Expenditures 26,191,320 Current: General Government 4,393,725 Public safety w. Highways and streets 2,371,945 Health, education and weffare 66,386,076 Culture and recreation (1,076,149) Sanitation - 2,756a 9 5 Pension and retirements contributions 78,840,223 1"niployeeshealth itISUrance 29,5613,381 Other Debt service: Principal Interest Total expenditures, 2,37 6,945 Excess (dericiency) of revenues olver (u nder), expend � t tires 101, 1 46,181 Other Financing Sources (Uses) Transfers in - Increases in capital leases Transfle,rs Out —(�Zio —9109-0) Total other financing sources (uses)105,000 j Net change in fund balances 6x,041 „ 181 Fit nd ba l ances at lie gi nn ing o F year Fund balances at end of year $ 6,0 4 1 y 181 See accompanying independent aLa(j6t0jr-.S'j,t!pC)j,j 18'„588 1 tO,097 8,303,956 25,09(1„ 1 77 22 058,457 l, l 93,509 42,663,206 261 6,262,2 15 2,759,188 l,4 117,756 27,267,4691 29,145,553 18,693„9737 - li 8,858,175 --------- ----- ----- - --------- - ----- - 1111- ...... . .... 18,849 11 8,663�,737 27,267,469, 157,868,589 ------------ - I'll, ------------.- 51 - 25 1, 1 5 1 A72E,M9) ,®i ?,) 2 01,9 5 3 19,137,8'24 26,191,320 69,615,.396' 4,393,725 (7,623,045) 19, � 37,824 26,191,320 66,386,076 251,151 89 1,0127 (1,076,149) 4,265,123 - 2,756a 9 5 30,639,530 78,840,223 251,151 3,6417,978 29,5613,381 93,105,346 "==� —1.111=�.14 � M� COUNTY OF HAWAII wnzmmm Schedulle of RevenUCS, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For die: Fiscal Year Ended June 30, 2019 Revenues: Taxes: Fuel taxes Public utility franchise taxes Total taxes Licenses and permits - motor vehicle weight taxes Intergovernmental Charges for services Other Total revenues Expenditures: General government - engineering Public safety - protective inspection Public safety - traffic engineering Highways and streets Highways and streets - mass transit Pension and retirernent contributions Ernployees' health iTISUI-aTICC Other Actual Variance Original Final (Budgetary Positive Bu BtAet i S 17,15 003 17,151,903, $ 17,343,326 $ 191,423 7,8�00,000 7,800,000 9,4'41,9,8u6 l,641,9,8'6 24,95 1,903 24,95 1,903 26,785,312 1,833,409 1,700,000 11,700,000 12, 499,695 799,695 1,600,000 1, 00,000 2,730,191 1,130,191 500,000 500,000 362,247 (137,753) 85,000 85,,000 567,480 482,480 38,836,91013 38,836,903 42,944,925 4,108,022 88,248 88,248 801,911 7,337 5,300 5,300 3,173 2,127 9,232,362 9,64'5,362 8,547,224 1,098,138 14,485,993 14,072,993 13,102,862 97Q0,131 9,200,000 9,200,000 9,009,,763 190,237 2,575,000, 2,800,000 2,655,422 t44,57 8 1,4010,000 1,275,00O l,194,8 41 3'01, l 59 1,350,000, 1,25'0,0001,094,2'79 155,721 Total expenditures, 38,3361,903 38,336,903 35,688,475 2,648,428 Excess (deficiency) of revenues over (under) expenditures 5010,000 500,000 7,256,450 6,756,450 Other Financing sources (uses) - transfers, in (out) - I"ransfers in - General Fund 1 r°ansfers - Transfers out - Capital Projects Fund (3,70,01,0010), (4,044,823) (3,862,868), 181,955 Deficiency rel revenUeS and other sources under expenditures and other uses (3,200,000) (3,544,923) »3,393,58'2 61,938,405 Fund balance at beginning of year 10,381',31? 0,38 ,W312 10,381,312 Fund balance at end of year $ 7,181,312 S 6,836,489, $ 13,774,894 4u 6,938,405 See accompanying indqendem auditors' report. COL)NTY OFIIAWAII SeNver and Schedule of Revenues, Expenditures, and Changes in Fund Balance - u dget udget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30,2Ot9 Revenues: I n tergovernmenta Charges for services - sewer fees Other Total revenues Expenditures Sanitation Pension and retirernent contributions Frnployees'lie alth insurance Other Total expendiftH`CS Def16ency of revenUeS Under expenditures Other financing sources: "fransfers, in - General Fund Excess (deficiency) of revenues and other SOUrCeS over (Under) expenditures Fund balance at be:ginning of year Fund balance at end of year See mccompa nying independent auditurs' report, 2,987,914 2,987,9114 2,9'87;911 (2,16 l,506) (2,161,506) 628,526 2,790,032 8,065,059 8,065,059 8,065,059 - 5,903,553 S 5,903,553 $ 8,69,3,585 $ 2,790,032 Actual Variance Original Final (Budgetary Positive Bura t B,u et Basis) (Negative) $ $ $ 155,529 i 55,529 7,739,200 7,73 9„200 7,788,,531 49,331 1,491 1,491 7,739,200 7,739,200 7,9,45,55 B 706,35 1_ 1 O,862,820 W,862,820 13,7:33,13'1 B 2,129,809 1,002,300 1,000 2,300 838,412 163,888 443,500 423,500 295,229 128,271 580,000 600,0,00 438,287 161,713 2,888,620 12,888,620 10,304,939, 2,583,681 (5,149',420) (5,149,420) (2,359,388) 2,790,032 2,987,914 2,987,9114 2,9'87;911 (2,16 l,506) (2,161,506) 628,526 2,790,032 8,065,059 8,065,059 8,065,059 - 5,903,553 S 5,903,553 $ 8,69,3,585 $ 2,790,032 COUNTY OF HAWAI I Solid Waste and Schedule of Revenues, Expenditures, and Changes in Fnnd Balance - Bud et Budget and Actual (Budgetary Basis) For the Fiscal Year Ended J'une 30,, 2019 Actual Variance Original Final (Budgetary Positive Budget Budget Basis), �(Nelllative)— Revenues Intergovernmental 564,0129 $ 729,883 686,138 $ (43,745) Charges for services - tipping fees 11,620,000 11,620,000 15,143,943 3,523,,943 Other 226,1014 226, 104 l87,612 (38,492) Total revenues 92,410,133 12,575,987' 16,017,693 3,441,706 zmm� Sanitation 32,723,086 32,918,940 31,200,361 1,718,579, Pension and retirement contribution's 1,828,669' 1,828,669 1,778,967 49,,702 Employees' health inSUrance: 854,400 854,400 799,196 55,204 Other 671,000 641,000, 3,45,675 295,325 Total expenditures 36,077,155 36,243,009 34,124,1 9 2,118,810 Deficiericy of'revenues, under expenditures (23,667,022) (23,,667,022) (18, 1 016,506) 5,560,516 Other fInancing sources'. Transfers in, - General 11"Und 19,281,770 1 ,28 1,770 19,281,770 - Excess (deficiency) of revenues and other smirces over (under) expenditures (4,385,252) (4,385,252) 1,175,264 5„560,516 Fund balance at beginning, o,f year 9,0148,655 9,048,655 91,049,,655 Fund balance at end of year $4,663,403 S 4,663,4013 . ... ....... $ 10,223,9 9 $ 5,560,5 1 6_ See accompanying independera auditors` repon COUNTY OF HAWAII Cemetery Fund SchedLde f Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the F iseal Year En ded .lune 3 0, 2 0 19 Revenues - other - s,,,de of cemetery p�ots Expenditures - health, education and weVare Excess of revenues over expenditures, Fund balance at beginning ofyear l-'und balance at end of year Sceaccompan),ing lndeperidcru auditors' report - - 626 - Actual Variance Original Final (Budgetary Positive Budge ffi!tlI w is e, $ 0,000 S, 10,000 S, 10,500 S 500 10,000 10,000 - 10,000 ti 10,500 1 OD,500 141,909 141,909 41,909 - 1 4 V, tt M,909 S V 4 1,909 li 1 2,40 a 0,500 - 626 - COUNTY OF HAWAII Parking Meter Fund Schedule of Revenues, Expenditures, and Changes in, Fund Balance - BUdgCt and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 206a Revenues - Charges for services - highways and streets Excess of revenues over expenditures Fund balance at beginning of year. Fund balance at end of year See accompanying independenlauditors' report. Actual Variance Original Final (Budgetary Po,sitive Bund Re-�— ..-.I-U�st . - —LNA'21-6v0— $ $ $ 20,294 $ 20,294 20,294 20,294 278,,765 278,76 27 ,7615 - $ 278,765 278,765 299,0159 20,294 -127- COUNTY OF HAWAH Vehicle Disposal Fund Schedule of Revenues, Expendiiures, and Changs in Fund Balance - Budget and Actual (Budgetary Basis) 1,"or the Fiscal Year Ended June 30, 20 19 Revenues: Licenses and perrnits - vehicle dispos,al fee Charges for services - towing charges Miscellaneous Total revenue's Expenditures: Sanitation Pension and retirement contributions Ernpogees" health insurance Other Total expenditures Excess (deficiency) of revenues over (under) expenditures Other Financing (uses) - transfers (out) - Transfers out- Serial Bond Redemption Fund Transfers out - Interest 1"und Deficiency of revenues, and other sources under expenditures and other uses Fund balance at beginning of year Fund balance at end of year See accornpanying independent audftors' report. Actual Variance Origimal F4W (Budgetary Posftivc _p a s isj_ (Negative) $2,280,000 S 2,280,000 S 2,444,784 $ 164,784 1,800 1,800 6,131 4,331 20,8010 201,8t1O 35,977 15,1„77 2,302,600 2,302,600 2,486,892 184,292 3,165,78�0 3,165,780 l,727,8,86 1,4 37,894 33,0100 33,0100 28,367 4,633 28,000 28,000 1:3,123 14,877 2X0 2,000 2,000 3,228,7 9,376 1,459,,4 04 (926,1801) (920,1,80) 717,516 1,643,696 (150,000) (150,00,0) (150,000) (75,000) (75,00,0) - (75,01001) (1,15'1,'1801) (1,151,180) 717,516 1,868,696 9,613,089, 9,613,0891 9,613,089 - $ 8,461,909, $ 8,461,909 $ 10,330,605 S 1,868,6916 COUNTY OF HAWAll Bikeway Fund SchedLfle of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary }iasis) For the Fiscal Year Ended June 30, 20 19 Revenues - heenses and Permits - bicycle tax Expenditures - highways and streets Excess (defi6ency) of revenues over (tinder) expendittwes Fund balance at beginning of year Fund balance at end of year See accompanying, independent auditors' report. Actual Variance Original FinM (Budgetary Positive Bud et d t lasis) _�N e ga $ 73,000 $ 7 ,000 $ 45,952 226,000 2267000 55,574 (153,000) (153,000) (9,622) 651,250 651,250 651,250 $498,250 $498,,250 $641,628 -129 - S (27,048) 170,426 143,378 COUNTY 01"," HAWAII Workfov-ce lnno,afion & Oppoilunity Act: Fun(I Schedule of Revenues, Expend4ures, and Changes in Fund Balance - Bud et Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 3a,, 20 191 Actual Variance Original Final (Budgetary Positive Budget udet S (N-�2L --- �V�j Revenues - intergovernniental $ 1,0162,6,10 $ 1,004 44'11 $ (58',160') Expenditures: Health, education and welfare 1,047,963 989,794 58,169 Pension and retirement contributions 14,377 14,,377 - Employees'health insurance 270 270 - Total expenditures 1,O62,6 10 1,004,441 58,169 Excess, of revenues over expenditures, - - Fund Mwice: at beginning ofyear Fund balance at end of year $ $ See accompanying independent audilors'repart. COUNTY OF HAWAII Golf Course Fund Schedule of Revenues, I'Apenditures, and Changes in Fund Balance - 1 ud et Budget and Actual (Budgetary Basis) For the F"isca Ii Year Ended June 30, 2019 Actual Variance Original! Final (Budgetary Positive LI tLd � l,., w d3ud„7et 3a s i Negatuv j Revenues: Charges for services S 7 5,600 S 662,569 $ 643,737 $ (18,832) Expenditures: Culture and recreation Pension and retirement contributions Employees' health insurance Other Total expenditures Deficiency oaf revenues under expenditures Other financing SOUrces: Transfers in - General Fund Excess of revermes and other sources over expenditures Fund balance at beginning of year Fund balance at end of year See accompanying independent auditors' report. 1,066,983 1,081,983 1,045„455;6,528 231,234 '231 „747 2,31,2' 14 533 118,000 117,487 11,2,1:192 5,295 6,000 6,000 6,000 1,422,217 1,4'37,217 1,388,861 48,356 (636,617) (774,648) (745, 1 24) 2 91,5 24 580,36'8 760,368 716,0,368 - (56,2419) (14,280) 15,244 29,524 (35,855) (35,855) (35,855) - $ (92,104) $ (50„ 12 5) S (20,611) 29,524 Note. "Fund bulance at beginning ofyear” 1n the above sehedWc is on the modHIed accru,'d and not budgewry bzisis, which is resulting in the negAvic fund Wane shown above. .131. COUNTY OF HAWAH Geothermal Relocation and ConarnunityBenefits Fund Schedule ofRevenues, Expendulures, and Changes, in Fund Baance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30t , 2019 RevenUes Miscellaneous: Geothermal royalties Expenditures: General government: 11kinning crud zoning Excess (die fls6ency) of revenues over (under) expenditures Fund balance at beginning of year Fund balance at end of year See accompanying independent audilors' replort. Actual Variance Original Hnal (Budgetary Positive 'dud r ---- L3 —L' � 9 L— osis- - � 1 � � L,1t r+� L $ 600,000 $ 6010,000 $ 2,052 $ (597,948) �,01010,000 1,000,000 1,000,000 (400,000) (400,000) 2,052 402,052 4,272,183 4,272,183 4,272,,1 93 - S 3,872,183 $ 3,8,72,183 S 4,274,235 402,052 -132- COUNTY OF HAWAII Beautification Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the, FiscA Year Ended June 30, 20ti 19 See accanipanying independent auditorsreport. Actual Variance Criginal Final (Budgetary Positive Buo afiv Revenues - licenses and pennits - highway beautification S 191,000 $ 191,00 o 203,753 S 12,753, Experldiwrm Highways and streets 236,300 236,3010 236,300 Culture and recreation 157,650 157,050 1117,7'15' 49,935 Total expenditures 3 3,950: 393,950 344,015 49,935 Deficiency of revenues under expenditures (202,91500, (202,950) (140,2 62), 62,688 Fund balance at beginning of year 582,085 582,085 582,085 - f"Und balance at end of year S 379,135 S 379,135 441,823 S 62,688 See accanipanying independent auditorsreport. COUNTY OF HAWAII Hawaii County Housing Agency SchcMe of'Revenues, Expenduwrcs, and Changes in Fund Mance. BUdget and Actual (Budgetary Basis) Revenues: Intergovernmental - Federal - HUD - Voucher program Other Investment earnings Resale of Property Other Total revenues ExpenditUres: Health, education and welfare Pension and retirement contribivions Employees" health insurance Total expenditures Deficiency of revenues under expenditures For the fiscal Year Ended June 30, 201 Original Fimd $ 20,734,644 S 0,,957,9, 37 1,613 1,613 1,3 8,83'7 1,398,837 22,135,094 22,358,387 Actual Variance (Budgetary Positive --Ei-a L-1 SL - 1,204 201,576,,134 S (381,803) 141,430, 14 1,430 2,817 1,204 137,500 137,500 520,178 (878,659) 21,37'8,059 (980,328) 23,006,369 23,229,662 21,568,793 1,660,869 1111,:5138 811,,588 718,49 93,097 364,160 364,160 332,684 :31 „476 24,182,117 24,405,4 1 0 22,6 1 9,968 1,785,442 (2,0147,023) (2,047,023) (1y241,90) 8115,114 Other financing sourcies, - transfers, in .- Transfers in - General Fund 2,0 12,3 8 9 2,0 1 2,3 89 1,256,200 (756,189) Excess (deficiency) of revenues and other sources over (under) expenditures (34,634) (34,634) 14,291 48,,925 Fund balance at beginning of year Fund balance at end of year See accompanying independent auditors" report, 2,356,748 2,356,748 2,356,748 S 2„32.2,114 S 2,322,114 S 2,37 1,039 S 48,925 - 134- COUNTY OF11AMIAll Park Dedication Fund Schedule of Revenues, Expendi I tires, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the F"iscal Year Ended June 30,, 2019 Revenues - investment earnings Excess of revenues over expenditures Fetid balance at beginning of year Fund balance at end of year See accompanying independent awl 4ors' report, Actual Variance Original Final (Budgetary Positive BruderBruder�Ba --BW—.4 fl—e!B — --.— � — - &3sis --tNuaa—tiyD— $ $ 988 S 988 988 988 88,542 88,542 88,542 $ 88,542 $ 88,542 $ 89,530 $ 988 - 13-5 - COUNTY OFHAWAH Short -Term Vacation Rental Enforcement F'und Schedule of Revenues, Expend itures, and Changes in FUnd Balance - BUdget and Actual (Budgetary Basis) or'the Fiscal: Year Ended June 30, 2019 Actual Variance Original FhW (BUdgetary Positive Budget fl tdert3 a s ls) T e ea t i�St) ReVICnUeS - ST vacadon rentM fees $ 800,000 $270,000 —$ (5 3 0, 0 0 01) Expenditures: General govermnerW s'r vacation rental enforcemern 800,000 12,963 787,037 Excess (deficiency), of revenues over (under), expenditures - 257,037 257,037 Fund balance at beginning of year - - Fund balance at end of'year $ $ $257,037 S 257,0137 See accompanying independent autfitors' report, COUNTY OF HAWAII Genet -al Excise,rax Fund Schedule of'Revenues, Expenditures, and, Changes In Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30,2019 Revenues, - GET surcharge Expenditures - mass transit Excess (deficiency) of revenues aver (under) expenditures Other financing sources (uses) - transfers in (out) - Transfers out - Capital Projects Fund Deficiency of revenues and od'ier sources under experiditure5 and other uses Fund balance at beginning of year Fund balance at end ol'year See accumpanying independem auditors' report. Actual Variance Original NnaI (Budgetary Positive Ba . ........ ................ --.—P $ 10,000,000 10,108,045 108,0415 5,895,000 2,7'92,331 (3,102,679) - 1137. /1, 105,000 7,3 l 5,724 3,2 10,724 (4,105,000) (4,105,000) 3,210,724 3,210,724 3,210,724 3,210,724 Assets Cash and cash equivalents lnvestments Due from other agency funds Odier receivables Total assets Liabihtics COUNTY OF HAWAII Agericy F'unds Combining Statenient of Agency l"unds Net Position J tine 30, 20 t 9 Performance Slate Iniprovernent Irnprovement Improvement Improvement acrid Weight District District District District RefundaWe , ra x No. 18 No, 19 No. 20 Revolving Deposits Fund . . . . . . ............ .. .. ... Fund . . ........ ...... . . ...... . . Fund ---- . ...... Fund Fo n d fund 1,77'5,915 $ 515,49,8 S 364,999 S 14,746 S 10,478 $ 332,554 250,O60 225,000 169,949, 6, 82 22,508 579 5I9 $ 1,"7"75,f715 S .521,680 637,567 $ 240,325 $ 180,9461 S 3 32,5 54 Vouchers payable S - $ $ 75,000 $ Due to other agency funds 8 5,850 Accrued fiabilides, 1,775,9017 7,523 7,525 Advances payable - 15,224 9,880 7,148 326,704 assets held for the bene fit o f iniprovernent districts - 498,933 620, 1 64 163,177 180,9146 Fotal liabilities 51,775,915 $ 521,6180 $ 637,567 2401,325 S 180:,946 332,554 See accompanying independent aud i tars' report, -1- 1,315 S S S 76,315 1,224 160 - 7,242 554,937 382,314 366,913 18,420 2,00 1 9,44 3,1 l 6,482 - - - - - 353,956 6,4448' 1,469,268 $ 557,476 5 382,314 --5 366,1713 —� —18,580 —$2,001 T 6,992 S 5„623,263 Non -Profit Or, and Business Payroh Flexible Lapsed License 1) 9 S U C Improvement Clearance Spending Warrants Plates Education Disoict Fund Account ...... . ...................... . . . Fund FUnd f"u n d ............... . . . . . . . ...... I - KaHua - - - - ------------ - --- To ta I 554,271 $ 3 2,3 14 346,242 S 18,580 S 2,00 S 944 S 4,318,542 - - - - - 6,45,009 7,242, 7 - ,242 3,205 - 13,429 - 6,048 52,470 $ 557,476 $ 382,3 l4 366,9 l3 S 78,580 T "5,001 6,992 —$ 5,023,263- 1,315 S S S 76,315 1,224 160 - 7,242 554,937 382,314 366,913 18,420 2,00 1 9,44 3,1 l 6,482 - - - - - 353,956 6,4448' 1,469,268 $ 557,476 5 382,314 --5 366,1713 —� —18,580 —$2,001 T 6,992 S 5„623,263 ® 140 - COUNTY OF HAWAII Agency Funds Combining Stateinent of Changes in Assets and Liabilities For the Hscal Year Ended JUne 30�, 20l Balance Balance Mly 1, Jime, 30, 2019 . . . ........ Additions . .... ............. DedUCti0nS 2019 State Weight Tax Fund Assets Cash and cash eqt,flivalents $ 2,,142,521 $ 25,338,870 $ 25,705,476 $1,775,915 Liabilities VoLichers payable S - $ 25,454,627 $ 25,454,627 $ - Dtie to other agency fmids 91 8 91 8 ACCJ-Ued liabilities - dune to State of Hawaii 2,142,430 25,,338,862 25,705,385 1,775,907 Total liabilities $2,142,521 $ 50,793,497 $ 5 l, 160, 103 $ 1,775,915 Improvement District No. 18 Fund Assets Cash and cash e(jUivalents $ 51.111,229 $ 120,1 2 $ 145,833, $ 5 15,498 Other receivables 4,168 122,123 120,1019 6,182 Total assets $ 545,397 $ 242,225 $ 265,942 $ 521,680 Liabilities VOLIC[IeN Payable $ - $ 2..87 $ 287 $ - Due to other non -agency l"Unds 1,514 1,341 1,514 1,341 Ammed liabilities 4,168 100,938 98,924 6,182 Advances payable 12,136 3,08,8 - 15,224 Assets held for the benefit of improvement districts 527,579 98,916 127,562 498,933 Toltal liabilities $ 545,397 $ 204,570 $ 228,287 $ 521,680 ® 140 - COUNTY OF HAWAII Agency Funds Coiffibining Statement of'Clianges in Assets and Lial6flities For tile Fiscal Year Ended JUne 30, 2019 Balance Balance July 1, June 30, 2018 Addiflows Deductions 2019 Improvement District No. 19 Fund Assets Cash and cash equivalents, $ 316,273 $ 120,036 $ 71,111(1 $ 364,999 Investments 246,,928 3,132 250,060 Due from other rion-agency funds - 14,227 14,227 Other receivables 3,7'41 1 17,601 l 13,061 11',281 Total assets $ 566,942 $ 254,996 $ 184,371 $ 637,567 Liabilities Vouchers Payable $ $ 2,338, $ 2,338 $ - Due to other non -agency funds 1,440 1,769 1,440 1,769 Accrued liabilities 3,741 115,074 113,061 5,754 Advances payable 8,595 1,285 - 9,,880 Assets held for the benefit of improvement districts 553,166 l 24,410 57,412 6201,164' Total liabilities $ 566,942 $ 244,876 $ 174,251 $ 637,567 Improvement Distract No. 20 Fund Assets Cash and cash equivalents $ - $ 21,148 $ 6,402 $ 14,746 Investments w 225,,0100 - 225,0100 Other receivables 4i 579 579 Total assets, $ 246,727 $ 6,4012 240,325 Liabilities Vouchers Payable $ $ 75,000 $ $ 75,000 Advances payable 2,148 - 2,148 Assets field for tile benefit of nn iprovemerit districts R 169,579 6,402 163,177 Total liabilities $ $ 246,727 $ 6,402 $ 240,325 COUNTY OFHAWAII w3mma= Combining Staten'ient of Changes in Assets and Liabilities For the Fiscal Year Ended June 30, 24.119 Liabflifies Vouchers payable $ - Balance 144,403,139 11 l,3 15 Due to other agency funds 1,554 1,224 Balance 1,224 Due Io other non -agency ffinds July 1, - 964 - Accrued habdities 59,5,803 June 30, 349,00;2,471 554,9,37 2018 $ 598,321 Additions $ 493,408,127 Deductions 2019 Improvernent District Revolving Fund Assets Cash and cash equivalents $ 7,857 $ 2,621 10,478 hivestrnents 166,070 3,879 169,949 Other receivables 250 519 25O 519 Total assets $ 174,177 $ 7,019 $ 250 S 180,946 Liabilitics Assets held for the benefit of improvement districts, $ 174,177 $ 6,769 $ 180,946 Performance and Refundable Deposits Fund Assets Cash and cash equivalents, $ 318,770 $ 5201,639 $ 506,8,55 S 332,554 Liabilities Vouchers payable $ - $ 493,717 $ 493,717 Due: to other agency funds 5,625 5,850, 5,625 5,850 Advances payable 313,145 514,464 5,00,905 326,704 Total liabilities $ 3111,774 1,014,031 $ 1,000,247 $ 332,554 Payroll Clearance Fund Ass.qts Cash and cash equivalents $ 590,4 4 $ 327,357,238 $ 32'7,,393,461 554,271 Due from other non -agency funds 2,709 308,9 14,919 308,917,628 - Other receivables, 5,118 3,966 5,879 3,205 Total assets $ 598,321 $ 636,276,123 $! 636,3 16,968 $ 557,476 Liabflifies Vouchers payable $ - 144,404,453 144,403,139 11 l,3 15 Due to other agency funds 1,554 1,224 1,554 1,224 Due Io other non -agency ffinds 964 - 964 - Accrued habdities 59,5,803 34 ,96,1,605 349,00;2,471 554,9,37 Total liabilities $ 598,321 $ 493,367,282 $ 493,408,127 $ 557,476 - 142 - COUNTY OF HAWAII Agency Funds Combining Stateniesit of Changes in Assets, and Liabililies For the Fiscal Year Ended June 30, 2019 Balance Balance July 1, June 3 , 2018 Additions Deductions 2019 Flexible Spending Account As -sets Cash and cash equivalents, $ 370,548 S 41 1,78'4 $ 400,018 $ 382,314 LiDbilities Accrued flabilifles $ 370,548 $ 411,784 S 400,0 l 8 $ 3 2,314 Lapsed Warrants Fund Assets Cash and cash equivalents $ 334,401 $ 12,841 $ 1,000 $ 346,242 Due from other agency funds 7,270 7,242 7,270 7,242 Other receivables 5,323 13,'429 5,323 13,429 Total assets $ 346,994 $ 33,512 13,593 $ 366,913 Liabilities Vouchers payable $ - $ l,001 $ 1,001 s - Accrued liabilities 346,994 33,184 13,265 366,913 ToW liabilities $ 346,9,9 4 $ 34,185 $ 14,266 $ 366,M Non -Profit License Plates Fund Assets Cash and cash equivalents 13,775 $ 79,535 $ 74,,730 $ 18,580 Liabilities Vouchers payable $ $ 83,605 $ 83,605 $ - Due to other agency funds 160 - 160 Accrued liabilities: Due to non-profit agericy 13,775 79,375 74,730 18,420 Total liabilities $ 13,775 $ 16,3,140 $ 158,335 $ 18,580 COUNTY OF HAWAII Agency Funds CoaNiiirig Staternetit of Changes, in Assets mid Liabilities For the Fiscal Year E iided June 30, 2019 Balazice Balwice July 1, Eme 30, 2018 Additimis QedUC0011S 20 19 Organ and 'rissue Education Fund Assets C'ash atid cash equivaleuts $ 1,392 $ 6,248 $ 5,639 $ 2,001 . . ............ . . . . ..... Unab—ilities Vouchers payable $ - $ 5,569 $ 9,569 $ - Accrued liabilities - due to State of Hawaii 1,3192 61,248 5,639 2,,001 Total liabilities $ 1,392 $ 11,817 $ 11,208 $ 2,001 Business Improvement District I-Kailua Assets Cash wid cash equivalents Other receivables - Bit) I-Kaflua Assessnietu DUe from other non-ageiicy funds Total assets Liabilities Vouchers payable Accrued liabilities - due to IMID Accrued liabilities Assets lield for the benetit of improveineiit districts Total liabilities $ 301 $ 823,343 822,700 $ 944 5,700 825,410 825,062 6,0118 7,558 7,558 $ 6,001 $ 1,65,6,311 $ 1,655,320 $ 6,992 - $ 821,612 $ 821,6 12 $ - 237 944 237 944 64 45 109 5,700 821,654 821,306 6,048 $ 6,0101 $ 1,644,255 1,643,,2 6,4 $ 6,992 COUNTY OF HAWAH mmmsim Conibining Statement of Changes in Assets and Liabilities For the Fiscal Year Ended June 30, 2019 Total - All Agency Funds Assets Cash and cash equivalents Investments Dtw from, other agency funds DLic from other non -agency funds Other receivaWes -tit I -Kailua Assessment Other receivables 'FoW assets Liabilities Vouchers payaWe Dw to other agency funds Ne to other nodi-agencylOnds Accrijed liabilities Accrued fiabihfles - due to non-profit agency Accrued liabilities - due to State of Hawaii Accrued liabilities, - dUe to KVBI1) Advances p,ayab' le Assets held for the benefit of improvement districts 1'oW liabilities See acconipanying independent auditors'report. Balanec Balance JWy 1, Rtne 30, 2018 Additions Deductions 201-1119 $4,637,561 $ 354,814,405 $ '3551,133,424 °114,318,642. 412,998 232,0111 - 645,009 7,270 7,242 7,270 7,242 2,709 308,936,704 308,925,186 14,227 5,7001 825,410, 825,0162 6,048 18,600 258,217 244,622 32,1 915 $5,084,838 $ 665,073,989 S 665,135,564 $ 5,023,263 $ - $ 171,342,,209 $ 171,265,894 $ 76,3 15 7,270 7,242 7,270 7,2 4 2 3,918 3,110 3,9 18! 3,110 1,321,318 349,622,630 349,627,848 1,316,100 13,775 79,375 74,730, 18,420 2,143,822 25,345,110 25,711,024 1,777,908 237 944 237 944 333,876 520,9185 5010,9015 3`3,956 1,260,622 1,221,328 1,012,682 1,469,268 $5,084,838 $ 548,142,933 $ 548,204,,5018 S 5,0123,263 COUNTY OF HAWAII rival Purpose Trust rarnbinittg Statement of hiv�ttt Pot - pose Trost Net Position Assets Cash and cash egtrlvatlents l.nvesta aura is Interest receivable Total assets Net Position 1. -lel intrust forother plies Total net position Sae accompanying independent auditors' report. JUne 301, 20,19 1 Shippers' "Total Geothermal Wharf Private Asset R rM. st Purpose Fr.md l;taratl '1"msts 211„839 S 797,645 S U,0019,,484 1,917,537 1,70 ,073 3,625,610 5,845 - 5,845 2,135,221 S 2,505,7'1 4,640,939 3,1.3..5,221 2,505, 71 4,640,939 2,135,231p $ 2,505,718� 4,6401,939 1 COL)NTY OF HAWAII Private Put -pose Ti-tists CombinhigStatement of Changes in PHvate Purpose TrusL Net Posit ion For t1w, Fkcal Year Ended June 30, 21019 Shippers' 'Total Geothermal Wharf Private Asset Trust Purpose Fund Fund Trusts Additions C',ontributions: Puna Geothermal Venture Investnient earrflngs' Net hicrease (decrease) in fiir value of investments Dividends Interest Total additions Deductions Claims payment Grant payments Investment Fees Total deductions Change in n,et position Net position, beginning of year Net position, end of year See accompanying indcpendent auditom' report. S 501,0010 Sd - $ 50,000 33,501 72,183 105,684 40, 75 40,875 28,663 . . . . ............ ... - — --- . . . . ............ 1,518 30,1 81 . .................. . .11,112,11-61 114,576 226,740, 293,760 293,760 - 94,418 94,418 13,495 13,495 293,760 1017',91l3 401,673 81,596) 6,663 (174,933) 2,316—,817 ....... .. 2,499,055 . ........ 4, 8 i 5,872 2,135,221 $ 2,505,718 $ 4,640,939 This page intendonafly left blank. STATISTICAL SEC`,FION (UNAUDITED) *M= Pa ge Fincincial Trends - These schedules contain trend information to help, the reader understand how the County's financial performance and well-being have changed over time, 149 Revenue (7a1mcify - These schedules contain information to MI) flie reader assess the County's most significant local revenue source, the property tax. l 54 Deb( Capacitj, These seliedWes present infornia6on to help the reader assess the affordability of the County's current levels of outstanding debt and the County's ability 101 jSSUe additional debt in the future. 160 Demograj)hic and Econonfic Itifim-mation, 'These schedules offer dernographic and economic indicators to help the reader understand the environment within which the County's financial activities take place, 163 Operafing lqlbrmatiori - These schedules contain service and infrastructure data to help the reader understand how the inffirmation in the County's financial report relates to the services provided and the activities performed by the County. 165, C c 2 '0 !n 1-13 'E 5 S 0.1 .5 c' PfiG rfq G- s E 5 149- I r6 w n z — ri r- li rl G9 0; ,D X, N d�a �Iq V11 m wl Ca c" W 00 m cp, r- V� �A C4 r".8lro Cl N.7'^ 'T F" ct' A rl� "I 'D, IT v! 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E L Id M, E u 'A > 0 22 E u 5, W, u M �ul > a N3 " y 'A 2 'r E - 11 "R wl 1; u 0 vi 5 C, E < z U COUNTYOF HAWMI Changes, iin; rmin4 halimm, Governmenud Funds (MoMed accrual bmis ofaccounfing) I ngi "4"em Fwd Years QAmowN iiv dhoo5and%) Unnvdticd , sce w.-vomp',inying mdopeodew wifivPm'vqlo,l I Amobnt Cor us val yeag 2W4 fimbem dian8rd for consos0.cncy 1 153 � 20107 2011 ;11'912 2013 20H 2WS 2W6 NO 21913 2019 Prqxfly Ifix 5,265,5)x43 $2 16,5,11 S208,23 1 5201,201 S 223,482 S 2)6A %I S 249,054 S 266 6 ? 5301.699 5 3 8 3,6,1 pubhc wrvucl compliny Ilx 9,647 9,297 9,897 1 OX6 6rb,380 9r1,3M 5D,S01 8,423 7,612 8,494 Fud kLlx 7AGO 7,603 8,293 6,333 "1' :'l7:"1 7,63 7,934 8,2819 63,;%4.1 17,311 Publw "ohly finpichise wx 8,963 9,4 M l 1,065 C 1,097 10,793 10,8211 9,004 '7,41:51 8,331 9,,W2 pJct,VISLs 41nd pwims 14,725 15,097 15,790 15,99 19,618 22,046 22,432. 22,9 32 214,066 24,b 5 3 GenerW excise tqs. %urchavp 12.515 Inleigovernmemul 77,15p4 9.3,74 9 100,867 7 9,9 p 2 5,'25'7 96,272 35,1T3 7(9,)20 "0,025 40916627 Chnrgtfor sorviccs 18,909 6,416 5,335 1"7,0055 9,392 20,357 21,672 34,70113 23,553 71.586 eflnimss (loss), 2,253 5 Hi 40o 1(6 6 8) 7 IN "7'p6 04 63? L59?. 4.1x,413 Sc ulmocm mitribuliou 12,500 offiev 3,241 7,874 4,20 4,399 10,084 9,769 412,1:32 p tl,"7'7p4,61;3.2 4.643 Totnt Revemm,,; 358,306 376,4"7:2 ;3"75,635 158,60 398,083 CH, 4 9 3 --42 U 6 427,941:# 475,052 124,015 Eqwndawcs, Curmw Gclwtm govenignew 44,IO 14,:25'1 AM 33,360 W679 40,905 10,488 40,8119 4072 4 ULM Public Wloy rJ'3.798 04,917 104,523 106,985 R 1,2 2� IX 22,8 G 9 27.4 514A, 16.3 937,'7113 14 5,09 4 ffighway,% ind qlrects 20,22), 1T,114 0,338 17,923 20,270 20,984 22A79 20-123D 26,46i1 27,448 Saldmorl 35,675 28,424 29,511 30,67) 29,949 31,464 34 .O 5 38,671 39X2 4;;3,30'5 HeiihK cdwimon and w0finve "2.1.51'9 26.847 23,74") 24,199 23,070 24,540 �5,,M 30,5)5 29,876 31,109 Culture and rru"211hon 17,28'.6 16,001 1 6,76.1 1 G, 337 63,334 ROM 21,661 2. ,196 2 q,31,H 22,072 Pension nnd icuremenr corunburions 28,5009 27,284 2,7,771 29,816 )3,0.12 MA5 I� , 3 �$9 43.71 �' c69'1 C),j 53,13) Employees, hcohlh inNurmice 23,573 25,2 62 '25..902 26,0, 1 26,736 2"7,'7"11 30,112 32,147 33,802 1.r,522 othur p5qolqlp�orrncm bvlcfids 15,700 17,307 3,170 032 7,180 11,495 N,IM 19,637 CD her 43 7"3 4,758 4,183 2,99 3,238 4,686 3,93 7,839 4,622 4, 1 hl DON wvwe Pdneip,n6 2f1,720 42,233 24,83-1 25,76:R 19,0 13 22,004 22„02 22,032 86,906 0,57'"7 11,584 14„311 114„.3«45 14.641 13,87 6 123,M 4'7,299 4 7,739 tl9,2 2 3 Capilal wofty L 2291- �L,51� 79,)98 1,14,288 8,10,&174 q.92 4 11,997 I'MM Bpvidaurcs 456,578 146x:1771 4!,6,916 376,822 :W0,7 75 45x,', 75 :5 33,6 5 0 529-'W2 540,560 x27,595 Rcvenus„ �, ovci (undivr) ExpemMiucs �98,272) (70,4"7'9;1 (20,2flr ( E,17($1 7,308 1^47,1'3;) G 1 V 1,834) W ,879" (65 %8) Oflior Ninancing, Som Lei 1Uses): SMe of Nstms p0 6 153 0 807 25 66 279 23 0 Cflpiml lell"mS 048 47 2,521 1,311P pip 1,59'74 3,189 V69 .1,809 6,777 Swe, PtvxAvin Fulml lowu %3,411 p 9,257 4,569 4,991 3X2 7317 K, 131) 5, .5,l 7 A 1'! Sul c° 0 f W n ds C5,000 50,480 1:30,1:'36 a p07,Vp8'i I ss twx (: o ( bond armc u pa 6w k Io tv% (B A Ns I q,(l 0 0 59,800 Rei'mid4i6y bonds 47,510 106,254 474,734 holmon oil bonds 2,079 n7,570 2,3J7<4 5,91)8 Refunding buncN/59AN5 Pb unce COMS (54D3) (276� Poytntmto mfunded bimid csoow ogum m (45,35'21•.128,9210 154,5177 Relimmew 0Y1'4Ff6wded IX cbI (11,6,35) I rilm Nns 'ln 61,4585' %,099 59d97p 50,m 6L238 K 394 5"'7,412 66,864 75,711 7 '4,21,91 Tg A I m N R s ou 1 (61,48.5'( (511,099) 159 o (5 if,,, 1:1x,38',1 . ................ (59 .mt) 07A M G66,8610 f75,7 I I 177,2�M� 1,01M odlev filmincims soluec$ 2 7,1 M) 56388 7:243 66,972 3096 1,996 WOMS 1,720 116 Q 71 .1,263 No OlAup ki lmnd baknus (70,5,17 ^^^5(01,1,161 5763,018) S 49,696 S WAN S (4 5,186) S 29,074 S j3O, 05'11 S 30,563 S 151723 obscui" m a pefccingr of MMCl*uIl cXpouNiums 10 � 4 1 5,91�111 12 Po 13 91 0 0". 9, 1 % 9 91111, 20,9,, 1 U 51 Unnvdticd , sce w.-vomp',inying mdopeodew wifivPm'vqlo,l I Amobnt Cor us val yeag 2W4 fimbem dian8rd for consos0.cncy 1 153 � w C-4 C> Cwt a, CD r1i Z7 0 C� '4� C14 r) r,1 C14 T'- 0� Cl mt CN t- 00 00 vi rn m o '* t"I V-CVkn ",o �o -r U, (,It '10 r11 ^10 !>Q rl� 'It r"", 0'13C"t r,,7 1 01, C4 06, C`1 ,6 rz 4 4 'I'l, — . 00 In C� rn C> r"I '�o 00 > \0 Ir� V-) 5 m kn In tn 00 ro k�ll, W� 00 .. .. 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Cy ma kA =' Ivmm COUNTY OF HAWAV I Principal Taxpayers J u ne 30, 2019 and 2010 Note: GrOSS VakMdMl at 3WILMI-Y 11, 2.017: 332,025,991,419 Gross valuation at January 1, 2008: $28„153,504,064' Soiwce: County of I ftiwai'i, Departrnent oil” Nuance, Real property Tax Divkion Unaudked - see accompanying lndepcndcm au6tors' report, Discal Year 2019 F&al Year 2010 Percentage Percentage 2018 of Total 2009 of''Tomi Assessed Assessed, Assessed Assessed lonay—er Business Valuation Rank ViIILMOCMI Valuation Rarik Valuation Kohatrailki Shores LLC` Developer S 377,5291,200 1 1,2% 53 u Mauna Kea/Hapuna Beach Corps, Developer/flotel, 167,947,800 4 0,5% Hualalai lnvestors LLC Developer/1-lotel 173,204,200 3 0,5% 227,679,700 3 0.8% 1-1 i I ton Resorts Corp. Timeshare 286,084,400, 2 0.9% 114,478,9001 7 OAIf'l MAPS Orchid Hotel LLC Hotel 126,94 1,500 7 0A% - Mauna Lani Resort lnc. Developer/Flotel - 101,612,800 6 0.4L �6 Raptor Residence LLC Residien6il 75,269,6010 8 U% 69,833,600 9 0.211,,ii) Target Corporation Retailer 67,028,600 10 U% SMG I HoW Waikoloa LLC 11we1 72,'712',7'1117 9 01.2% Hilton Land Investment I LLC Hotel 150,166,200 5 0.5% 237,983,900 2 0.89/6 1250 Oceanside Partners Developer - - - Mauna Kca Developnient Corp. Hatels/Dev, - 259,905,800 1 0.9% DFIL Mahi Opicu LLC Developer/1-lotel, 13 5,,4 1 1,300 6 0,4%1 WB KD: Acquisition LLC DevOoper - 187,'819,800 4 7 1r10 WB-LCP Orchid Owner LLC [Iotcll - 135,679,800 5 0,50,xo Kona Coast Resort Lid Condo/1i hne Share - 73,824,,400 8 0JrI,,`u BRE/Waikoloa LLC Hotel - 65,000,600 10 02�,o $ 1,632,295,500 5.0% $ 1,473,819,300 52% Note: GrOSS VakMdMl at 3WILMI-Y 11, 2.017: 332,025,991,419 Gross valuation at January 1, 2008: $28„153,504,064' Soiwce: County of I ftiwai'i, Departrnent oil” Nuance, Real property Tax Divkion Unaudked - see accompanying lndepcndcm au6tors' report, I -1 - r,1 Z U m ce) 00 C� -n ern 5 a"D 00 N e- cei rcn r1j r-- �c 61 c1l cl ura6 C5, x it d\ -,t a, coN 4T ED r- ,o c5 01� 0 r -Z c� 0� 0" cl, SCP in In rl. 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Iq In, 00 -4 M Ifl ,l) 0 o rZ 6' r4 r--7 r,f uCu Caw, m to I,N r 1,4 rr f,r rn r rn ',rl 01 0 Cl ��'4 1,T W rl ,r P'l Do rq 1,ra w d a 00 t— eK7 C� m C�, 17'. n. r,,� n lll�pl IT Z, S F c, C-, c, --I � cl = r r4 r4 r,,1 r f,j c,l r4 r t,4 r4 r,d rj r4 > g g r, In e,, N r- cd ,r, 10 lo IC> Iry In 'o t> o IrlLn Z 2 M Do al, 00 141 4,,M In j, wi nn au no 0 In rn wl 114 oo r, oll� 1,1� 'IR w In rvl q, cc Cru 1,6 C*r- !421 lr� 14� "I ;Y' t r-4 C> ae'i wo ^z Cpw 0, r r1l M It It & & 4-11 Irl 0 0 I'C m oa 00 It! z W, rn V 11% r 11 r-. rl 00 on V- C7, In- 0,1 "'. "', fl� R� 0 - In > r1l rn q 'T 4 v M, M 00Cfi '71 VJ, 00 'CJw r,400 Cb t,- r-4 ro 00 m A 11, In In m rt C� ", r, , , , , r,l V_ r,i, a, In In m E- Ura"t '::S "C� lel ^r M rpt 01, PA r4 �r 00 = r- ,'.r..1Q In 00 M — t, 0 "ll CaYb ",»,r�o r,4 00 In r, qr. C, f, rN r4 ,0 74 r,p , rl� lyl. Iq In, 00 -4 M Ifl ,l) 0 o rZ 6' r4 r--7 r,f uCu Caw, m to I,N r 1,4 rr f,r rn r rn ',rl 01 0 Cl ��'4 1,T W rl ,r P'l Do rq 1,ra w d a 00 t— eK7 C� m C�, 17'. n. r,,� n lll�pl IT Z, S F c, C-, c, --I � cl = r r4 r4 r,,1 r f,j c,l r4 r t,4 X 5 a 0141aylkwol MvwvI Ratios of General fir nde,d Debt Outstanding Last Ten Fiscal Years NOTES: (a) See Table 10 for debt applicable to legal debt margin. (b) See 'fable 5 for net taxable property values, (c) SeeTable I I for populatiori data. Details regarding the County's OLIAStanding, debt can be fouild ill tile notes to the basic financial statements, Unaudited - see accurnpanying, iridependent auditors' report. -161- Debt Percent of Applicable to Net Taxable Fiscal Legal Debt Property Per- erear ear Marg is a) Value (b) Capita (c) 2010 277,48 1,633 1 ffl,"O 1,549 2011 305,615,691 12% 1,636 2012 317,69 ,844 1.30,,o 1,679 2013 315,676,941 13% 1,654 2014 298,709,020 1.3% 1,538 2015 312,632,049 1.2% 1,592 2016 362,963,113 1.4% 1,829 2017 405,488,342 1 A% 2,024 2018 414,446,063 1.4% 2,062 2019 425,153,552 13% N/A NOTES: (a) See Table 10 for debt applicable to legal debt margin. (b) See 'fable 5 for net taxable property values, (c) SeeTable I I for populatiori data. Details regarding the County's OLIAStanding, debt can be fouild ill tile notes to the basic financial statements, Unaudited - see accurnpanying, iridependent auditors' report. -161- a I ON -,r E c, Hn ,r rr) fl, oli W, 0) (A flA bll� R7 u LO ma' sn 162- I ON -,r wl c, Hn ,r rr) fl, oli W, 0) (A flA bll� R7 u ma' sn IA 9z ra Table I I COUNTY OF HAWAII Demogi-aphic and Economic Statistics Last Ten Fiscal Years Fiscal *Personal *Per Year *Resident Income Capita Ended Population (thousands Personal School unemployment June 30, as Of J LI I_y I oaf dollars) Inconle Enrollaient Rate 2009 183,629 $ 5,51 7,49'7 $ 30,,047 30,138 9,91% 2010 185,381 $ 5,717, 88,5 $ 30,844 29,741 10,0% 2011 187,229 $ 6,114,237 $ 32,6'56 30,,1013 9,7% 2012 189,191 $ 6,318,657 $ 33,398 30,314 ,3016 2013 190,821 $ 6,544,583 $ 34,297 33,948 6,6% 2014 194,190 $ 6,771,329 $ 3'4,870 29,985 6.5% 2015, 196,428 $ 7,067,347 $ 35,979 29,865 5.2% 2016 198,449 $ 7,618,9'24 $ 38,392 29,753 4.7% 2017 2010,38,1 $ 8,053,011 $ 40,188 29,66,6 3.5% 2018 200,983 $ 8,5.31 „484 $ 42,449 29,6011 17% * An-munts reflect subsequent adjustments ,50111 -Ce.- COUnty of Hawaii, Departnient of Research and Development, Bureau of EconomicAnalysis, State of Hawah Department ol"Labor, State of Flawaii DOE and University of Hawaii Hilo Unaudited - see accompanying independent auditors' report. COUN'ry OF HAWAN Principal Employers, County of Hawaii June 3t), 2019 and 20 10 Source: County olf Hawai'i, DepaHment of Research and Development U naudi ted - see accompanying independent auditors" report, - 164 - 20,19 20110 percentage percentage OfTotal Counly of Total County E,mploye Employees Rank Employment Enip�oyecs Rank Employinent State of Flawai"i 13,500 1 M7,b 8,115 1 9,4',,o County of Hawai'i 2,700 2 3.7% 2,745 2 3,23+ United States Government 1, 3 OO 4 1.8% 1,36,4 3 1,6' o Four Seasons Resort Hualalai 1,300 3 1,81% 56,2 9 0 7u Matins Kea and I lapuna Prince Resorts and Mauna Kea Services U12 5 1, 4 IN Hilton Waikoloa Village 921 6 1,3% 984 4 KTA Super Star's 50 7 1,2% 800 6 1, The Fairmont Orchid, HawaN 60O 8 0,8% 577 8 0,916 Mauna Lani Resom (Operations), Inc. 685 7 HdpuIna Beach Prince Hotel - - 487 W 0,6"o Waikoloa Beach Marriott Resort & Spa 320 9 0.4% - North Hawaii Community Hospital, 313 110 13.4% - Wal-Mart - 52 51,W, Total 22,816 31.5% l 7,17 l 19,9'% Total employee count 72,050, 86,325 Source: County olf Hawai'i, DepaHment of Research and Development U naudi ted - see accompanying independent auditors" report, - 164 - .0 '1, s 8 1-4 'r f-4 c In G� 0, 1,4 50 00 In C•. � A r- --� V� L. �,- - r- utw e-iCYea n iJ w) n 00 -1 r,, In In cp� "I It !�: q-• V; 2, C- a, W) rJ C-4 r- 'n wYN PA r2 11 CD r, ce r", CD cp, r R r) C.i In rq In IT Cr nr% r'l c", cr, 11r, 8 N ula 8,8 C� R-� V� 8"It In Y1 't v) CD n L.�, 4�� "I r-. 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A COUN IIANI'-,, d ONSULTAN-rs AMERICAN SAVINGS BANK TOWER I 1001 BISHOP STREET, SUITE 17001 HONOLULU, HAWAII 96813-3696 T (808) 524-2255 IF (808) 523-2090 1 nkcpa.com N&K CPAs, Inc. ACCOUNTANTS I CONSULTANTS April 29, 2020 To the Chair and Members of the County Council County of Hawaii AMERICAN SAVINGS BANK TOWER 1001 BISHOP STREET, SUITE 1700 HONOLULU, HAWAII 96813-3696 T (808) 524-2255 F (808) 523-2090 We have completed our financial audit of the basic financial statements and other supplementary information of the County of Hawaii, State of Hawaii (the County), as of and for the fiscal year ended June 30, 2019. Our report containing our opinions on those basic financial statements is included in the County's Comprehensive Annual Financial Report. We submit herein our reports on the County's internal control over financial reporting and on compliance and other matters, compliance for each major federal program and internal control over compliance, and schedule of expenditures of federal awards required by the Uniform Guidance. OBJECTIVES OF THE AUDITS The primary purpose of our audits was to form opinions on the fairness of the presentation of the County's basic financial statements as of and for the fiscal year ended June 30, 2019, and to comply with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), which establishes audit requirements for state and local governments that receive federal financial assistance. More specifically, the objectives of the audits were as follows: 1. To provide a basis for an opinion on the fairness of the presentation of the County's basic financial statements. 2. To report on internal control over financial reporting and compliance with provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts in accordance with Government Auditing Standards. 3. To report on internal control over compliance related to each major federal program and an opinion on compliance with federal statutes, regulations, and the terms and conditions of federal awards that could have a direct and material effect on each major federal program in accordance with the Single Audit Act Amendments of 1996 and the Uniform Guidance. 2 N&K CPAs, Inc. ACCOUNTANTS I CONSULTANTS SCOPE OF THE AUDIT Our audit was performed in accordance with auditing standards generally accepted in the United States of America as prescribed by the American Institute of Certified Public Accountants; Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of the Uniform Guidance. The scope of our audits included an examination of the transactions and accounting records of the County for the fiscal year ended June 30, 2019. ORGANIZATION OF THE REPORT This report is presented in four parts as follows: • Part I - Our report on internal control over financial reporting and on compliance and other matters. • Part II - Our report on compliance for each major federal program; report on internal control over compliance; and report on schedule of expenditures of federal awards required by the Uniform Guidance. • Part III - The schedule of findings and questioned costs. • Part IV - The summary schedule of prior audit findings. We wish to express our sincere appreciation for the excellent cooperation and assistance extended by the staff of the County. Sincerely, N&K CPAs, INC. 3 COUNTY OF HAWAII, STATE OF HAWAII TABLE OF CONTENTS Page PART I REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 6 - 7 PART II REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM; REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE Independent Auditor's Report on Compliance for Each Major Federal Program; Report on Internal Control over Compliance; and Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance 9-11 Schedule of Expenditures of Federal Awards 12-22 Notes to Schedule of Expenditures of Federal Awards 23 PART III SCHEDULE OF FINDINGS AND QUESTIONED COSTS Schedule of Findings and Questioned Costs PART IV SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS Status Report 12 f►�'II&Q-1 M PART I REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS N&K CPAs, Inc. ACCOUNTANTS I CONSULTANTS AMERICAN SAVINGS BANK TOWER 1001 BISHOP STREET, SUITE 1700 HONOLULU, HAWAII 96813-3696 T (808) 524-2255 IF (808) 523-2090 INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENTAUDITING STANDARDS To the Chair and Members of the County Council County of Hawaii We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business -type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the County of Hawai°i, State of Hawaii (the County), as of and for the fiscal year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the County's basic financial statements, and have issued our report thereon dated December 30, 2019. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the County's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the County's internal control. Accordingly, we do not express an opinion on the effectiveness of the County's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. 0 N&K CPAs, Inc. ACCOUNTANTS I CONSULTANTS Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the County's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Honolulu, Hawaii December 30, 2019 7 PART II REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM; REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE 0 . kZ 1i � N&K CPAs, Inc. ACCOUNTANTS I CONSULTANTS AMERICAN SAVINGS BANK TOWER 1001 BISHOP STREET, SUITE 1700 HONOLULU, HAWAII 96813-3696 T (808) 524-2255 IF (808) 523-2090 INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM; REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE To the Chair and Members of the County Council County of Hawaii Report on Compliance for Each Major Federal Program We have audited the County of Hawaii, State of Hawai`i's (the County) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the County's major federal programs for the fiscal year ended June 30, 2019. The County's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Management's Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditor's Responsibility Our responsibility is to express an opinion on compliance for each of the County's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the County's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. D N&K CPAs, Inc. ACCOUNTANTS I CONSULTANTS We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the County's compliance. Opinion on Each Major Federal Program In our opinion, the County complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the fiscal year ended June 30, 2019. Report on Internal Control over Compliance Management of the County is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the County's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the County's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 10 N&K CPAs, Inc. ACCOUNTANTS I CONSULTANTS The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the governmental activities, the business - type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the County as of and for the fiscal year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the County's basic financial statements. We issued our report thereon dated December 30, 2019, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County's basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole. 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Q D U O ' H 0 U z y C z ) N � � � 21 N O 0) U N N 7 E E O U v m 0 .5 z w N O O O O O Q LUi U U Cl) O_ CL U) s = N i L 3 = b y C ) $ cf) N 2 ami L c m > E c n u (D ami ami D v CO o o o m= > o o =F� i ami u`a)ca c E= i E U -O S a a a b3 S o c CN Cy E Q to S N f6 e C'EoOMi O Q ca co ca Q D Q C s U 0 U n 0 t s ¢O is UE N U 0 [ ca co E C co Cl) h F 3 ) E y w E ) C C ) N U 21 N O 0) U N N 7 E E O U v m 0 .5 z w N O O O O O Q LUi U U Cl) � @ � c 2 0 U C/) D � @ m 04 o Cl) $w� 2w C/) LL 2LUw 0!= 2 2 u /x� w LL O w � � D w 2 U C/) L ( E ® ) t j � § § f \ c Ld t k ! ?\$/ 0 e LU \ | Cc U co EL U E LL LU 0 CN ca A \ .2 LO & cr \ Q / = g \ LU / \ Q % / � ca \ 2 z \ // A \ C) 2 _ 2 \ � » ] § » \ F-CD e / 0 °LU \ ƒ CO �_ ! % - j 7 C,3 7 / ] k / / © � k / / / 3 CO ° § k / 2 [ a a \ j + |\ CO \ | 7 * CD CD CD /CD CD CD CD CD 2 k 04 a CD CD LO CD 2 / 2 = Cl) r- r- a 2 a- ; « e �� ■ �7 k z z z z z z z @ � 2 I co $ $ $ $3 \ \ \ \ \ c 3 m\] a a E§ C,4 \ \ \ \ \ \ _ _ _ _ 7 « 2 \ k * * LL � 0 L ( E ® ) t j � § § f \ c Ld t k ! ?\$/ 0 e LU \ | Cc U co EL U E LL LU 0 22 CN ca A 00 LO & cr \ Q / = g \ LU / \ Q % / � ca f z \ // A \ C) 2 _ 2 \ � » ] § » \ CO \ 7 / 0 °LU \ ƒ CO �_ ! % - j 7 C,3 7 k ` � \ © ° k CO ° § k \ j k |\ CO \ | 7 22 $ $ � ƒ CN A 00 LO & 0 S g \ LU / \ \ f / � f $ $ � ƒ A & 0 S 0 - LU 0 0 \ / � f \ // A C) 2 0 2 \ � in ƒ ] § » CO \ 7 0 �_ j k / � 0 \ k § I C) � CO @ 0 04 0 g » E _0 » 2 % (D >N 7 ) » 3 0 E @ 0 f » 0- 4-- 0 0 .cu" E E ) 2 5 � County of Hawaii, State of Hawaii NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Fiscal Year Ended June 30, 2019 NOTE A - BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activities of the County of Hawaii and its discretely presented component unit, the Department of Water Supply, under programs of the federal government for the fiscal year ended June 30, 2019. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the County of Hawaii , it is not intended to, and does not present the financial position, changes in financial position, or cash flows of the County of Hawaii. NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the Schedule are reported on the cash basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in Office of Management and Budget Circular A-87, Cost Principles for State, Local and Indian Tribal Governments, or the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. NOTE C - INDIRECT COST RATE The County of Hawaii has elected not to use the 10 -percent de minimis indirect cost rate allowed under the Uniform Guidance. 23 PART III SCHEDULE OF FINDINGS AND QUESTIONED COSTS 24 County of Hawaii, State of Hawaii SCHEDULE OF FINDINGS AND QUESTIONED COSTS Fiscal Year Ended June 30, 2019 SECTION I - SUMMARY OF AUDITOR'S RESULTS Financial Statements Type of report the auditor issued on whether the financial statements audited were prepared in accordance with GAAP: Unmodified Internal control over financial reporting Material weakness(es) identified? _ yes ✓ no Significant deficiency(ies) identified? _ yes ✓ none reported Noncompliance material to financial statements Formula Grants for Rural Areas and Tribal Transit Program noted? _ yes ✓ no Federal Awards Internal control over major federal programs: Material weakness(es) identified? _ yes ✓ no Significant deficiency(ies) identified? _ yes ✓ none reported Type of auditor's report issued on compliance for major federal programs: Unmodified Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? _ yes ✓ no Identification of major federal programs: CFDA Number Name of Federal Program or Cluster 14.871/14.879 Housing Voucher Cluster 20.205 Highway Planning and Construction 20.509 Formula Grants for Rural Areas and Tribal Transit Program 97.036 Disaster Grants - Public Assistance (Presidentially Declared Disasters) Dollar threshold used to distinguish between Type A and Type B programs: $1,480,622 Auditee qualified as a low-risk auditee? ✓ yes _ no SECTION II - FINANCIAL STATEMENT FINDINGS No matters were reported. 25 County of Hawaii, State of Hawaii SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Fiscal Year Ended June 30, 2019 SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. 26 PART IV SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS (Provided by the County of Hawaii) 27 County of Hawaii, State of Hawaii STATUS REPORT Fiscal Year Ended June 30, 2019 No prior audit findings which apply under the current criteria of the Uniform Guidance were noted. 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