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Home My WebLink About2019-COH - Comprehensive Annual Financial ReportCOMPREHENSIVE ANNUAL FINANCIAL REPORT Fiscal Year Ended June 30, 2019 COUNTY OF HAWAII Hilo, Hawaii Harry Kim Mayor Wilfred Okabe Managing Director Prepared by The Department of Finance Deanna Sako Director of Finance COUNTY OF HAWAII Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2019 Table of Contents Page INTRODUCTORY SECTION Letter of Transmittal 1 GFGA Certificate of Achievement 8 Organization Chart 9 List of Elected Officials 10 List of Principal Officials l l FINANCIAL SECTION 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 Pave Combining and Individual Nonmajor 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 STATISTICAL SECTION 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, Governmental Funds 153 Table 5 - Real Property Assessed Values by Classification and Tax 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 151 Table 10 - Legal Debt Margin Information 162 Table I 1 - Demographic 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 Harry Kim b!a}nor December 30, 2019 County of Hawai `i Finance Department 25 Aupuni Street, Suite 2103 • Hilo, Hawaii 6720 (808)961.8239 • Fax(808)961-8569 The Honorable Mayor and Members of the Council County of Hawaii 25 Aupuni Street Hilo, Hawaii 95720 Deanna S. Sako Director Steven A. Hunt Deputy Do-ector We transmit herewith the Comprehensive Annual Financial Report for the County of Hawai `i, State of Hawaii (the County), for the fiscal year July 1, 2018 to June 30, 2419. 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 the 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 Hawaii 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 Hawai`i'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 Hawaii, including its component unit, the Department of Water Supply, established by the County Charter as a semi -autonomous body of the County government. This component unit is included in the County's reporting entity because of its financial relationship with the County. Hmvat'i Cozinty is an equal opportunity provide)- and employer. The County provides a full range of municipal services. These include police and fire protection; emergency medical care; public prosecutor; culture and recreation; sanitation; social services; water; planning and zoning; construction and maintenance of highways, streets and infrastructure; real property assessment and tax collection; and general administrative services. However, the County does not provide such other traditional services as public education, hospitals and courts. These services are provided by the State government. The County consists of the island of Hawaii, 4,428 square miles in size. It is twice as large as the combined area of all the other inhabited islands in the Hawaiian Archipelago. Since there is no other local or municipal government within the County, there are no overlapping taxes and no overlapping debt. The County has an elected mayor and a nine -member council. Economic Condition and Outlook The island of Hawaii, commonly known as the Big Island, is located 214 miles from Honolulu, the state capital; 2,200 miles from the west coast of the continental United States; and 4,000 miles from Japan. The city of Hilo on the east side of the island serves as the county seat as well as the transportation and financial center for the Big Island. Hilo's infrastructure includes Hilo Harbor, a deep -water port, and Hilo International Airport, which is capable of handling fully - loaded wide-bodied aircraft. Kailua-Kana and South Kohala, major tourist destination areas on the west side of the Big Island, are served by flights from the United States mainland, Canada and now Japan through the Kona International Airport. Scheduled freight services are available between the islands by air and sea transport. Communities on the island are linked by a network of State and County maintained streets and highways. The Big Island is the most diversified of the neighbor island economies. As a result it is buffered to some extent when any one industry lags. Although the 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. Tourism 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 the 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 Iava, 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. -2- 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 kiawe 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 For the Year Public Safety — With the volcanic eruption in the lower Puna region endangering both lives and property, the Hawai' i 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, Pohoiki, Kapoho, and `Opihikaa areas. The department also began its quest for reaccreditation through the Commission for Accreditation on Law Enforcement Agencies {Galea®} during this fiscal year, having undertaken a "mock" reaccreditation to prepare for a site visit expected at the onset of FY 20. The Fire Department has increased its efficiency as a result of acquiring necessary equipment and training through legislative measures and grant awards received that provided the department with critical funding. These legislative measures and grants provided direct benefit to our community with 1) alternative funded 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 system 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 Kawailanil`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. Culture and Recreation: — Parks and Recreation opened the Gilbert Kahele Recreation Area Cabins for lodging. There are seven cabins, each containing two rooms, a kitchenette, electric range, shower and lavatory. The Department also continued to provide emergency sheltering through the end of the lava event in Puna and completed multiple restoration and repair projects for damages sustained from both lava and hurricane events. -3- For the Future Public Safety — A high priority for the department to seek funding to implement a body worn camera system to assist our officers in the field was achieved as the budget for FY 24 approved in June 2019 authorized funding for the purchase of the cameras as well as for hiring personnel to oversee 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 main 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 co -located dispatch center site. Public Works - DPW is currently working on the following County and Statewide Transportation Improvement Program (STIP) projects: The Kalaniana`ole 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 (DDT) and includes multi -use accessibility and the enhancement of roadway capacity, operations and safety for motorists, bicyclists and pedestrians. The work involves the widening of Kalaniana`ole 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 Mamalahoa 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 2020. 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 Kuawa Street new fields which consists of hath a multipurpose and baseball field. -4- Other Financial Information Internal Control The management of the County is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the County are protected from loss, theft or misuse and to ensure that adequate accounting data are compiled to allow for preparation of financial statements in conformity with generally accepted accounting principles. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management. Budgetary Control The County maintains budgetary controls to ensure that legal provisions of the annual budget are complied with and that 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 funds, and the capital projects fund. Budgetary control for the debt service fund is achieved through general obligation bond indenture provisions. The basis of accounting used for the budgets of the general and special revenue funds differs from generally accepted accounting principles. Intergovernmental revenues are recognized when 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. SignVIcantAccounting 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. 39) and Statement No, 61, The Financial Reporting Entity: Omnibus an amendment of GASB Statements 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. -5- Financial Highlights Total revenues increased by $39.7 million from the prior year, which was mostly due to property taxes increasing by approximately $11.7 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 9.0 percent from the prior year, and $466.1 million in the residential class. Second, there was an $18.5 million increase in Other Taxes 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). The County's net investment in capital assets increased by $27.0 trillion 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. Other Information IndependentAudit 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 of Achievement The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the County of Hawaii for its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2418. 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 believe our current Comprehensive Annual Financial Report continues to meet the Certificate of Achievement Program's requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate. Acknowledgments The preparation of 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. Deanna Sako Director of Finance IRA �J Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to County of Hawaii Hawaii For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2015 Executive Director/CEO -8- County of Hawaii Organization Chart County Council County Legislative Clerk Auditor Departments under direct supervision of the Managing Director: County Electorate Mayor ' Prosecuting Attorney Office of Management: Managing Director Agencies under Departments under direct supervision of the commissions and Managing Director: administrative supervision of the Mayor: Corporation Counsel Civil Defense Human Resources Finance Office of Aging Police Planning Mass Transit Liquor Control Environmental Management Office of Housing & Fire Research & Development Community Development Water Supply Public Works (semi -o utonomous) Parks & Recreation Information Technology County of Hawaii Elected Officials ,Pune 30, 2019 Administrative Officers (Term: 2016-2020) Harry Kim Mayor Mitchell Rath Prosecuting Attorney County Council (Term: 2015-2020) Aaron S.Y. Chung Chair Karen Eoff Vice Chair Maile "Medeiros" David Member Matt Kaneali`i-Kleinfelder Member Ashley L. Kierkiewicz Member Susan L. K. Leeloy Member Valerie T. Poindexter Member Herbert M. "Tim" Richards, III Member Rebecca Villegas Member -10- Principal Officials June 30, 2019 County Clerk Jon Henricks Legislative Auditor Bonnie Nims Managing Director Wilfred Okabe Deputy Managing Director Barbara Kossow Corporation Counsel Joseph Kamelamela Director of Finance Deanna Sako Planning Director Michael Yee Director of Personnel William Brilhante Jr. Director of Research and Development Diane Ley Chief of Police Paul Ferreira Fire Chief Darren Rosario Director of Public Works David Yamamoto Director of Environmental Management William Kucharski Parks and Recreation Director Roxcie Waltjen Manager -Chief Engineer, Department of Water Supply Keith Okamoto Civil Defense Administrator Talmadge Magno 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. -12- FINANCIAL SECTION PF PF 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 MANAGEMENT'S DISCUSSION AND ANALYSIS 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, 2019. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal. III Ia MI) F.M. llIM:l_111"r iti&I • The assets of the County exceeded its liabilities at the end of the fiscal year by $130.0 million (net position). This amount includes a negative valance 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 amounts also includes $213.0 million and $17.0 million in deferred outflows and inflows of resources, respectively. • As of the close of the current fiscal year, the County'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 spend ijig at the County's discretion (unrestricted fund balance). • At the end of the current fiscal year, unrestricted fund balance for the general fund was $42.4 million, or 13 percent of total general fund expenditures. CfiPJ71:�■I i .�1i71It�: i a� y 1►►�►[� M I&I"M 11u 133 P This discussion and analysis is intended to serve as an introduction to the County's basic financial statements. The County's basic financial statements comprise three components: (1) Government -wide financial statements, (2) Fund financial statements, and (3) Notes to the basic financial statements. This report also contains both required and other supplementary information in addition to the basic financial statements themselves. Government -wide Financial Statements The 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. The 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 County is improving or deteriorating. 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 the timing 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 unused vacation and sick leave. Both of the government -wide financial statements distinguish functions of the County that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through ii ser fees and charges (business -type activities). The governmental activities of the County 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 famiIies. -16- 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 The 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 Cotnnty, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. 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 the same functions reported as governmental activities in the government -wide financial statements - i.e., most of the County's basic services are reported in governmental funds. These statements, however, focus on (I) 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 the County's programs. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental funds balance sheet and the governmental funds statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The County maintains several individual governmental funds organized according to their type (general, special revenue, debt service, and capital projects). Information is presented separately in the governmental 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 funds. 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 nonmajor 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 funds to account for the operations of the Kulaimano Elderly Housing Project and the Guli Ekahi Affordable Housing Project. - 17- Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the County. The private -purpose trusts and the agency funds are reported under the fiduciary funds. Since the resources of these funds are not available to support the County's own programs, 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 statements provide additional information that is essential to a full understanding of the data provided in the government -wide and fiord financial statements. Other Supplementary Information In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information, which is presented immediately following the notes to the basic financial statements. The combining statements referred to earlier in connection with non major governmental funds and budgetary comparison schedules for the non major special revenue funds are presented immediately following the required supplementary information, Condensed Statement of Net Position ,lune 30, 2019 and 2018 Governmental Activities zM 211 Primary Government _ Business -type Activities _ x¢19 2018 Toral 2019 2" Assets: Current and other assets 5 351,300,809 $ 298,905,875 $ 1,300,216 $ 1,182,749 $ 352,601,025 $ 300,088,624 Capital assets, net 1,328,138,639 1,313,094,090 1,365,554 1,402,543 1,329,504,193 13 14,496.633 Total assets 1,679,439,448 1,611,999,965 2,665,770 2,585,292 1,682,105,218 1.6f4,585,257 Deferred Outflows of Resources: 213,039,853• 225,708,726* - - 213,039,853 225,708,726 Total Assets and Deferred outllo►vs of Resources 1,892,479,301 1,837,708,691 2,665,770 2,585,292 1,895,145,071 1,840,293,983 Liabilities: Long-term liabilities outstanding 1,677,521,661• 1,621,452,640* 697,777 807,005 1,678,219.438 1,622,259,645 Other liabilities 69,882,208 58,373,270 83,015 64,257 69365,223 58,437,527 Total liabilities 1,747,403,869 1,679325,910 784,792 871,262 1,748,184,661 1,680,697,172 Deferred Inflows Of Resources: 16,970,935 17,863,765 - -- 16,970,935 17,863,765 Total Liabilities and Deferred Inflows Of Resources 1,764,374,804 1,697,689,675 780,192 871,262 1,765,155,596 1,698,560.937 Net position: Net investment in capital assets 866,986,564 844,099,433 667,777 595,538 867,654,341 840,694,971 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) (790,424,384) Total net position $ 128,104,497 $ 140,019,016 $ 1,884,978 $ 1,714,034 $129,989,475 $141,733,046 *See explanation on page 2U. ME Analysis of Net Position As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the Cousity, assets exceeded liabilities by $134.6 million at the close of the most recent fiscal year. By far the 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 the current fiscal year, the County is able to report positive balances ill 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 brisiness-type activities. The County's net position decreased by $11.7 million from 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 $274.4 million in the prior year, which was the result of the County's implementation of GASB Statement 75, Accoun ing and Financial Reporlingfw• Postewplayment Benefits Other Than Pensions. Under this new accounting standard the County's financials at the government -wide level now reflect their net liability, expense, deferred 'inflows and outflows relating to Other Postemployment benefits. The County's net capital assets increased by $15.4 million (1 percent) due to the large amount 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 $56.1 million (3 percent) due priinariIy to the issuance of $7.4 million State Revolving Fund (SRF) loans and $34.4 million in bond anticipation notes, which were offset by $28.4 in retirements of bonds and SRF loans; a $13.3 million increase in the 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 postemployment benefits other than pensions; and a $25.8 million increase in the County's net pension liability. See further discussion of the 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 $1 l .9 million, which represented all of the total decrease in net position of the County. The primary reasons for the $39.7 million (8 percent) iticrease in total revenues was due to property taxes increasing by approximately $11.7 million, which was due to increases in the value of net taxable real property, of which the most notable was a $634.9 million increase in the homeowners class that represented an 9 percent increase from the prior year, and then followed by a $466,1 trillion increase in the residential class (5 percent increase). Other taxes in General Revenues increased by approximately $18.5 million, which related the newly assessed general excise tax surcharge that was restricted to uses relating to the highways and streets projects. Total expenses increased by $31.2 million, which represented a 6 percent change from 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. -20- Condensed Statements of Activities For the Fiscal Years Ended June 30, 2419 and 2018 Primary Government Governmental Activities Business -type Activilies Total Q 2019 2019 22018 2019_ 2018 Revenues: Program revenues: Charges for services $ 55,359,674 $ 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 57,600.066 Capital grants and contributions 28,375,566 31,530,719 - - 28,375,566 31,530,7!9 General revenues: Property taxes 315,969,118 364,294,883 - 315,959,118 304,294,883 Other taxes 47,796,847 29,285,662 47,796,847 29,285,662 Grants and contributions, unrestricted 19,748,211 19,678,289 - - 19,748,211 19,678,289 Investment carvings 3,420,693 1,841,356 8,234 5,561 3,428,927 1,846,917 Other 1,848,245 2,339,248 - - 1,848,245 2339,248 Total revenues 536,804,196 497,146,946 780,435 734,079 537,584,630 497,881,025 Expenses: General government 88,668088 75,740,262 - - 88,660,088 75,740,262 Public safety 248, t 11,465 245,139, I68 248,1 l I,465 245,139,168 Highways and streets 62,066,700 54,728,332 - - 62,066,700 54,728,332 Health, education and welfare 37,919,675 35,597,718 609,486 566,864 38,529,161 36,164,582 Cuiture and recreation 35,908,061 35,834,512 - - 35,908,061 35,834,512 Sanitation 62,775,074 55,025,011 - 62,775,674 55,425,011 Interest on long-term debt 13,277,652 15,493,678 - 13,277,652 15,493,678 Total expenses 548,718,715 517,558,681 609,487 566,864 549,328,201 518,125,543 Increase (Decrease) in net position (11,914.519) (20,41 1,735) 170,948 167,215 (t 1,743,571) (20,244,520) Net position at beginning of year 140,019,016 434,457,254 1,714,030 1,546,815 141,733,046 436,004,069 Prior period adjustment (274,026,503) - - -- (274,426,503) Net position al beginning orycar, as restated 140,019,016 160,430,751 1,714,030 1,546,815 14I,733,046 161,977,566 Net position at end of year $ 128,104.497 $ 140,019,016 $ 1,884,978 $ 1,714,030 $ 129,989,475 $ 141,733,046 *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 2018 is $160,430,751 for governmental activities. See Note 1 for details. Analysis of Changes in Net Position Governmental activities. Governmental activities decreased the County's net position by $1 l .9 million, which represented all of the total decrease in net position of the County. The primary reasons for the $39.7 million (8 percent) iticrease in total revenues was due to property taxes increasing by approximately $11.7 million, which was due to increases in the value of net taxable real property, of which the most notable was a $634.9 million increase in the homeowners class that represented an 9 percent increase from the prior year, and then followed by a $466,1 trillion increase in the residential class (5 percent increase). Other taxes in General Revenues increased by approximately $18.5 million, which related the newly assessed general excise tax surcharge that was restricted to uses relating to the highways and streets projects. Total expenses increased by $31.2 million, which represented a 6 percent change from 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. -20- The charts below illustrate the County's governmental expenses and revenues by function, and its revenues by source. As shown, public safety is the largest function in expense (45 percent), followed by general government (1 G percent) and sanitation (i 1 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: 30, 2019 $300,000,000 $250,aoa,oan Expenses ■ Program revenue $200,000,000 —. $150,000,000 — $100,000,000 — — $50,000,(100— $o ■.._. ��, ■_T� ems` kec� cg`s tiaS� ti�ec ti.� ac` l�� b')`� q,°a V11 sao a bcc 4 4 c�a r�a� Revenue by Source — Governmental Activities Year Ended June 30, 2019 Investment $3,42[ Grants and contributions not restricted to speeific programs, $19,748,211 Other taxes, $47,746,847 Property taxe $315,964,111 -21 - ervices, 674 Operating grants and Contributions, $64.285,842 -Capital grants and contributions, S28,375,566 Business -type activities. Business -type activities increased the County's net position by $170,448 versus an increase of $167,215 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 $8,234, which were comparable to the prior year. Operating grants and contributions increased by $36,927 (16 percent) to $261,848 as a result of the County increasing the minimum rent which thereby increased the rent subsidies from the US Department of Housing 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. Governmental funds. 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 the 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) $50.4 million in committed fund balance, (2) $25.7 million in assigned fund balance, and (3) $3.1 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 ($46.5 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 2014. The general fund is the 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 amount. 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 the prior year. Key factors in this increase ($1.8 million) over last year's increase are as follows: • A positive increase of $11.9 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. -22- The positive impact of the increase in revenues was offset by increases of $15.8 million (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 $11.5 million in associated employee and retiree benefits. The County also faced (lie continuation of the natural disaster relating to the lava eruption and incurred expenditures for emergency protective measures and recovery related to a hurricane. The fund balance of the County's capital projects fund decreased by $19.1 million (25 percent) during the current fiscal year. The decrease is primarily due to the recognition of $30.0 million in bond anticipation notes (BANS) that were issued in the current year to fiend expenditures incurred during the fiscal year as a current liability instead of another financing source because the 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. This was partially offset by the issuance of $7.4 million in SRF loans and $4.1 million in transfers from the newly created General Excise Tax Fund. The debt service funds consist of the 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 l% change from the prior year. Proprietary funds. The County's proprietary funds provide the same type of information found in the government -wide financial statements, but in more detail. Unrestricted net position of the Kulaimano Elderly Housing Project (Kulaimano) at the end of the year amounted to $638,675, and $578,526 for the Ouli Ekahi Affordable Housing Project (OU Ii Ekahi), The total net position for Kulaimano increased by $82,117 and the net position for Ouli Ekahi increased by $88,831. Other factors concerning the finances of these two funds have already been addressed in the discussion of the County's business -type activities. GENERAL FUND BUDGETARY HIGHLIGHTS Differences between the 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 the grant appropriations from the 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: ■ The 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 the lava recovery efforts and was instead recognized in tine 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. The variance is due primarily to unfilled vacancies and continued efforts by each department to control payroll costs during the budget year due to the tough economic conditions facing the County. Tile following functions are responsible for the majority of the variance: public safety ($3.3 million) and general government ($2.6 million). -23 - • $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. $ l.3 million is due to the fact that the increase in health premiums for employees were lower than originally anticipated. �•r:►UIk". WI .RI 31 wall (111131:-]W.11)u110&111MAN111010 Capital assets. The County's investment in capital assets for its governmental and business -type activities as of June 30, 2419 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 1 percent. Major capital asset events during the current fiscal year included the following: ■ 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 Mamalahoa Highway Widening; constrtEction it] progress as of the end of tile current fiscal year had reached $8.0 iniIIion with $6.5 million coming from the current fiscal year. • Construction continued oil 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 coming from the current fiscal year. • Construction continued on the Hawaii County Radio System Upgrade project; construction in progress as of the current fiscal year had reached $12.1 million with $1.4 million coming from the current fiscal year. ■ Construction continued on the Kawailani Street Improvements (`Iwalani to Pohakulani); 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 Wastewater Treatment Plant R-1 Upgrade project; construction in progress as of the end of the 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. -24- Capital Assets (net of depreciation) June 30, 2019 and 2018 Additional information on the County's capital assets can be found in note 6 to the basic financial statements. Long-term debt. Long-term debt is primarily comprised of bonds of $382.4 million, State Revolving Fund loans of $39.7 million and Bond Anticipation Notes of $34.0. At the end of the current fiscal year, the County had total bonded debt outstanding of $382.4 million. This entire amount was comprised of general obligation bonds which are backed by the full faith and credit of the County. The County's total bonded debt 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, the County held an "AA+" rating from Fitch and an "Aa2" rating from Moody's for general obligations debt. State statutes limit the amount of general obligation debt the County may issue up to 15 percent of the total assessed value of all county real property as established for tax purposes oil the last tax assessment rolls. The current debt limitation for the County is $4.8 biIIion, which is in excess of the County's outstanding general obligation debt, Currently the County's outstanding debt represents 9 percent of our debt limitation. Additional information oil the County's long-term debt can be found in note 10 to the basic financial statements. ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES ■ The unemployment rate for the County for the current fiscal year is at approximately 3.7 percent, which is 0.7 percent higher than at the end of the prior fiscal year. Th'ls is the first increase in unemployment since 2009, when the rate was 1 l.5 percent. The number of domestic and international visitors to the County for the current fiscal year was approximately 1.67 million, with an approximately 35 percent decrease from the previous year's count of 2.60 million. These factors were considered in preparing the County's budget for the 2020 fiscal year. I WIRE Primary Government Governmental Activities Business -type Activities Total 2019 2018 2019 2018LII2 2018 Land and improvements S 263,470,318 $ 256,390,951 $ 753,877 3 753,877 $ 264,224,195 5 257,144,828 Wrastructure assets 312,878,757 309,295,827 - - 312,878,757 309,295,827 Ground and site improvements - - 49,199 53,546 49,199 53,546 Buildings and improvements 627,746,572 631,727,813 538,410 574,454 628,284,982 632,302,267 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 - - 58,855,811 35,591,695 Total $1,328,138,639 $1,3I3,094,090 $ I.365,554 5 1,402,543 $1,329,504,193 $1,314,496,633 Additional information on the County's capital assets can be found in note 6 to the basic financial statements. Long-term debt. Long-term debt is primarily comprised of bonds of $382.4 million, State Revolving Fund loans of $39.7 million and Bond Anticipation Notes of $34.0. At the end of the current fiscal year, the County had total bonded debt outstanding of $382.4 million. This entire amount was comprised of general obligation bonds which are backed by the full faith and credit of the County. The County's total bonded debt 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, the County held an "AA+" rating from Fitch and an "Aa2" rating from Moody's for general obligations debt. State statutes limit the amount of general obligation debt the County may issue up to 15 percent of the total assessed value of all county real property as established for tax purposes oil the last tax assessment rolls. The current debt limitation for the County is $4.8 biIIion, which is in excess of the County's outstanding general obligation debt, Currently the County's outstanding debt represents 9 percent of our debt limitation. Additional information oil the County's long-term debt can be found in note 10 to the basic financial statements. ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES ■ The unemployment rate for the County for the current fiscal year is at approximately 3.7 percent, which is 0.7 percent higher than at the end of the prior fiscal year. Th'ls is the first increase in unemployment since 2009, when the rate was 1 l.5 percent. The number of domestic and international visitors to the County for the current fiscal year was approximately 1.67 million, with an approximately 35 percent decrease from the previous year's count of 2.60 million. These factors were considered in preparing the County's budget for the 2020 fiscal year. I WIRE At the end of the current fiscal year, unrestricted fund balance in the general fund was $42.4 million. The County has appropriated $21.8 million of this amount for spending in the 2924 fiscal year budget and the majority is included in the assigned portion of the fund balance. REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of the County's 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 Hawaii, 25 AUPL111i Street, Suite 2193, Hilo, Hawaii 96720. BASIC FINANCIAL STATEMENTS _27_ COUNTY OF HAWAII Statement of Net Position June 30, 2019 Primary Government Governmental Business -type Component Activities Activities Total Unit Assets Current assets: Cash and cash equivalents (notes 3 and 14) $ 95,429,774 $ 1,180,315 $ 96,610,089 $ 20,115,848 Restricted cash and cash equivatents (note 3) 105,817,735 42,514 105,860,249 - Investments (note 3) 3,227,607 - 3,227,607 13,000,000 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 Internal balances (note 5) 3,500 (3,500) - Inventories 7,297,830 7,297,830 1,531,481 Prepaid expenses 80,420 2,059 82,479 55,968 Other 1,806,244 - 1,806,244 - Total current assets 319,802,198 1,227,542 321,029,740 45,542,289 Investments (note 3) 13,877,211 - 13,877,211 17,000,000 Restricted investments (nate 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): Utility plant in service, net - - 245,904,985 Infrastructure assets, not 312,878,757 312,878,757 - Ground and site improvements, net - 49,199 49,199 Buildings 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 6,250,078 - Preliminary survey and investigation charges - - 6,140,398 Land and improvements 263,470,318 753,877 264,224,195 5,204,598 Construction work in progress 58,455,811 - 58,455,811 39.306,088 Total capital assets, net 1,328.138,639 1,365,554 1,329,504,193 296,556,069 Total noncurrent assets 1,359,637,250 1,438,228 1,361,075,478 314,444,294 Total assets 1,679,439,448 2,665,770 1,682,105,218 359,986,583 Deferred Outflows of Resources Deferred loss on refunding 5,997,547 - 5,997,547 - Deferred outflow related to pensions and other post employment benefits (notes 13 and 14) 207,042,306 - 207,042,306 12,278,889 Total deferred outflows of resources 213,039,853 - 213,039,853 12,278,889 Total Assets and Deferred Outflows of Resources 1,892,479,301 2,665,770 1,895,145,971 372,265,472 (Continued) -28- COUNTY OF IIAWAiI Statement of Net Position June 30, 2019 (Concluded) See accompanying notes to the basic financial statements lf412 Primary Government Governmental Business -type Component Activities Activities Total Unit Liabilities Current liabilities: Accounts payable and accrued liabilities $ 21,126,698 $ 72,921 E 21,199,619 $ 3,099,214 Accrued payroll 10,773,598 - 10,773,598 1,582,476 Advance collections - intergovernmental 26,514,194 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 14) 60,998,287 102,520 61,140,807 5,613,168 Compensated absences, current portion (note 10) 10,626,781 - 10,626,781 561533 Clairns and judgments, current portion (notes 10, 12 and 14) 4,495,902 4,495,902 174,262 Capita] leases, current portion (notes 8 and 10) 3,359,810 3,359,810 - Landfill costs payable, current portion (notes 9 and 10) 359,009 - 359,009 - Customers' deposits - - - 200,460 Other 9,305,885 - 9,305,885 - Total current liabilities 153,671.235 185,535 153,856,770 11,838,190 Noncurrent liabilities' Bonds and loans payable, net (notes 10 and 14) 449,134,834 595,257 449,730,091 65,009,512 Cc mpen sated absences (note 10) 31,785,932 - 31,785,932 1,144,142 Claims and judgments (notes 10, 12 and 14) 26,988,581 - 26,988,581 604,738 Capital leases (notes 8 and 10) 8,219,522 - 8,219,522 - Land rill costs payable (notes 9 and 10) 30,655,991 - 30,655,991 - Unearned revenue, noncurrent - - - 1,583,953 Customers' deposits - - 15,686,1076 Net pension liability (notes 13 and 14) 636,645,242 - 636,645,242 33,522,053 Net OPER liability (notes 13 and 14) 400,834,810 - 400,834,810 16,431,746 Other 9,467,722 - 9,467,722 - Total noncurrent liabilities 1,593,732,634 595,257 1,594,327,891 133,982,220 Total liabilities 1,747,4103,869 780,792 1,748,184,661 145,820,410 Deferred Inflows of Resources Deferred inflows related to pensions and other post employment henefits (notes 13 and 14) 15,043,306 - 15,043,306 2,446,102 Deferred inflows - other 1,927,629 - 1,927,629 69,643 Total Deferred Inflows of Resources 16,970,935 - 16,974,935 2,515.745 Total Liabilities and Deferred Inflows of Resources I,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) 33,21 1,359 - 33,211,359 - Highways, streets and abandoned vehicles 22,013,295 - 22,013,295 Public access open space 25,642,884 - 25,642,884 - Other 2,362,529 - 2,362,529 Unrestricted M2,112,13 1,217,201 (820,894,933} (2,892,297] Total net position $ 128,104,497 S 1,884,978 $ 129,989,475 $ 223,929,317 See accompanying notes to the basic financial statements lf412 COUNTY OF HAWAII Statement of Activities For the Fiscal Year Ended June 30, 2019 General revenues: Taxes: Property taxes, levied For general purposes Public service company taxes Francaise taxes Fuel taxes General excise tax surcharge Grants and cnntributions not restricted to specific programs Investment earnings (expense) Miscellaneous Total general revenues Change in net position Net position, beginning of year, as previously stated Prior period adjustment Net position, beginning oryear, as restated Net position, end oryear See accompanying notes to the basic financial statcments. -30- Program Revenues Operating Capital Chargees for Grants and Grants and Functions/_Proarams Expenses Services Contributions Contributions Primary government: Governmental activities: General government S 88,660,088 $ 2,149,353 $ 2,778,017 S 3,020,117 Public safety 248,1 i 1,465 6,220,940 31,223,536 - Highways and streets 62,066,700 17,870,107 3,542,629 24,433,469 Health, education and welfare 37,919,675 1,320,363 25,761,236 103,488 Culture and recreation 35,908,061 1,940,302 68,355 100,400 Sanitation 62,775,074 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 28,375,566 Business -type activities: Health, education and welfare 609,486 510,352 261,848 - Total primary government S 549,328,201 S 55,870,026 S 64,547,690 $ 28,375,566 Component unit: Water (note 14) $ 61,231,713 S 49,871,792 S - $ 5,031,723 General revenues: Taxes: Property taxes, levied For general purposes Public service company taxes Francaise taxes Fuel taxes General excise tax surcharge Grants and cnntributions not restricted to specific programs Investment earnings (expense) Miscellaneous Total general revenues Change in net position Net position, beginning of year, as previously stated Prior period adjustment Net position, beginning oryear, as restated Net position, end oryear See accompanying notes to the basic financial statcments. -30- Net (Expense) Revenue and Changes in Net Position Primary Government Governmental Business-type Component [iv' ic AmNifles IDW S (80,7 12,60 1) $ - S (80,712,601) S - (210,666,989) - (210,666,989) - (16,220,495) - (16,220,495) - (10,734,588) - (10,734,588) - (33,799,404) - (33,799,404) - (35,285,904) - (35,285,904) - (13,277,652} - (13,277,652; - (400,697,633) - (400,697,633) 162,714 162,714 - (400,697,633) 162,714 (400,534,919} (6,328,198} 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 - 12,518,126 - 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 8,234 388,791,348 824,715 (11,914,519) 170,948 (11,743,571) (5,503,483) 140,019,016 1,714,030 (41,733,046 227,791,263 - - - 1,641,537 140,019,016 1,714,030 141,733,046 229,432,800 $ 128,104,497 S 1,884,978 $129,989,475 S 223,929,317 MIE COUNTY OF HAWAII Governmental Funds Balance Sheet June 30, 2019 Total liabilities, deferred inflows, and fund balances See accompanying notes to the basic financial statements. 32 Other Total Capital Governmental Governmental General Projects Funds Funds Assets Cash and cash equivalents (note 3) S 57,325,947 $ 75,150,316 $ 68,771,246 $ 201,247,509 Investments (note 3) 27,688,091 16,731,545 2I,316,753 65,736,389 Receivables, net (note 4) 25,930,167 - 3,184,086 29,114,253 Due from other governmental funds (note 5) 2,626,633 2,710,225 655,795 5,992,653 Due from other nongovernmental funds (note 5) - - 3,500 3,500 Receivables from other governments (note 4) 22,463,558 7,913,199 13,643,040 44,019,797 Inventories 7,297,830 - - 7,297,830 Other 933,307 842,666 110,691 1,886,664 Total assets $ 144,,265.533 $103.347.951 $,j,QZ_685.1 11 Liabilities, Deferred Inflows and Fund Balances Liabilities: Accounts payable $ 6,517,652 $ 10,331,741 $ 4,277,305 $ 21,126,698 Accrued payroll 9,342,094 - 1,431,504 10,773,598 Due to other governmental funds (note 5) 567,900 444,296 4,980,457 5,992,653 Advance collections -intergovernmental 19,729,975 6,772,223 11,998 26,514,196 Bond anticipation note payable (note 10) - 30,000,000 - 30,000,000 Other 4,061,374 657,368 637,905 5,356,647 Total liabilities 40 218 995 48,205,628 11,339,169 99,763-792 Deferred Inflows of Resources: Unavailable revenue (note 7) 27.857,796 3.240.596 31,098,392 Fund balances: Nonspendable: Inventory 7,297,830 - - 7,297,830 Restricted for; Debt service (note 10) - - 33,211,359 33,211,359 Highways, streets and abandoned vehicles - 24,543,005 22,013,295 46,556,300 Public access open space 25,642,884 - - 25,642,884 Other 799,769 20,2I6,296 1,562,760 22,578,825 Committed to: Budget stabilization 6,887,961 - - 6,887,961 Disaster and emergencies 6,393,483 - - 6,393,483 Lower Puna area - - 4,274,235 4,274,235 Rental assistance and subsidy - 1,253,946 1,253,946 Sanitation - - 19,902,764 19,902,764 Self insurance 2,348,835 - - 2,348,835 Highways, streets and abandoned vehicles - 1,111,518 10,665,824 11,777,342 Parks and recreational projects - 1,993,896 91,351 2,085,247 Zoning change impact mitigation (fair share) - 3,187,594 - 3,187,594 Other 580,872 1,534,197 152,409 2,267,478 Assigned to: Subsequent year's budget 21,819,518 - - 21,819,518 Other 1,297,811 2,555,817 - 3,853,628 Unassigned 3,119,779 - (22,597) 3,097,182 Total Fund balances 76,188,742 55,18 93.105.345 224.436.411 Total liabilities, deferred inflows, and fund balances See accompanying notes to the basic financial statements. 32 COUNTY OF HAWAII 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 assets consist of: Land and improvements 263,470,318 Infrastructure assets, net 312,878,757 Buildings and improvements, net 627,746,572 Equipment, net 59,337,103 Easements, net 6,250,078 Construction work in progress 58,455,811 Total capital assets, net (12,440,733) Deferred amounts on refunding and pension are reported as deferred ouL0o%vs of resources in the government -wide financial statements but are not are not reported in the governmental fund statements Some of the County's revenues will be collected after year-end b u L are not available soon enough to pay for the Curren( period's expenditures and therefore are deferred (unearned) in the funds. (note 7) Some liabilities are not due and payable in the current period and therefore are not reported in the funds. Those liabilities consist of: Bonds and loans payable, net of receivable from improvement district (478,138,254) Interest due on Ion g -term. debt (6.1 11,069) Capital leases (11,579,332) Compensated absences (42,412,713) Claims and judgments (31,484,483) Landfill costs payable (31,015,000) Pollution remediation (12,440,733) Other Postemployment Benefit Obligation (OPER) (400,834,810) Net pension obligation 6345,242) Total long-term liabilities Unamortized gain on refunding Deferred amounts related to pension are reported as deferred inflows of resources in the government -wide financial statements but are not are not reported in the governmental fund statements Net position of governmental activities See accompanying notes to the basic financial statcments. -33- 1,328,138,639 213,039,853 29,170,763 (1,650,661,636) (976,227) 1� 5.043,306y S 128,104,497 COUNTY OF HAWAII Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances For the Fiscal Year Ended June 30, 2019 Expenditures Current: General govemment 41,689,635 - Other Total Public safety 136,790,449 Capital Governmental Governmental Highways and streets General Projects Funds Funds Revenues 9,050,340 - 22,058,457 31,108,797 Property taxes $ 313,631,189 $ - $ - $ 313,631,189 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 9,441,986 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 25,487,990 101,626,813 Charges for services 3,913,656 - 23,602,635 27,516,291 Investment earnings 3,746,161 336,984 64,351 4,147,496 Other 2,506,791 310,798 1,825,038 4,642,627 Total revenues 401,436,136 16,330.796 105,747,636 524,014.568 Expenditures Current: General govemment 41,689,635 - 110,097 41,799,732 Public safety 136,790,449 - 8,703,956 145,094,405 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 1,151,340 - 42,663,206 43,814,546 Pension and retirement contributions (note 13) 46,874,702 - 6,262,215 53,136,917 Employees' health insurance 14,762,682 - 2,759,188 17,521,870 Other postemployment benefits 39,636,911 - - 39,636,911 Other 2,896,079 - 1,417,756 4,313,835 Debt service: Principal 1,431,798 - 29,145,553 30,577,351 Interest 85,555 278,868 18,858,175 19,222,598 Capital outlay 2,633,012 49,264,384 - 5I,897,396 Total expenditures 320,182,704 49,543.252 157,868,589 527,594,545 Excess (def is iency) or revenues over (under) expenditures 81,753.432 (33,212,456) (52,120,953} (3,579,977) {Continued} -34- COUNTY OF HAWAII Governmental Funds Statement of revenues, Expenditures, and Changes in Fund Balances For the Fiscal Year Ended June 30, 2019 Other Financing Sources (Uses) Sale of assets Increase in capital leases (notes 8 and 10) State Revolving Fund loans (note 10) Transfers in (note 5) Transfers out (note 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 of year (Concluded) Other Total Capital Governmental Governmental General Projects cts 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 77,244,441 (69,617,396) - (7,623,045] (77,240,441} (67,187,773} 15,064,341 66,386,076 14,262,644 14,565,659 (18,148,1I5) 14,265,123 10,682,667 61,040,124 73,290,438 78,840,223 213,170,785 582,959 - - 582,959 $ 76,188,742 $ 55,142,323 $93,105,34b $ 224,436,411 Sec accompanying notes to the basic financial statements. - 35 - COUNTY OF HAWAII Reconciliation of the Change in Fund Balances of Governmental Funds to the Statement of Activities For the Fiscal Year Ended .lune 30, 2019 Net change in fund balances - total governmental funds Amounts reported for governmental activities in the statement of activities are different because: Capital outlays are reported as expenditures in governmental funds. However, in the statement oractivitics, the cost orcapital 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 (47,617,365} Excess of capital outlay over depreciation expense 15,044,548 Borrowings provide current financial resources to governmental funds; however, issuing debt increases long-term liabilities in the statement of net position. In the current period, assets Financed through: State Revolving Fund loans (7,439,296) Capital leases ( 6,776,636) Total debt proceeds (14,215.932) Repayment of long-term debt is reported as an expenditure in governmental funds, but the repayment reduces long-term liabilities in the statement of net position. In the current year, these amounts consist of: Bond principal retirement 24,900,698 State Revolving Fund loan repayments/forgiveness 3,393,572 Capital lease payments 3,309,881 Total long-term debt repayment 31,604,151 Because some revenues will not be collected for several months after the County's fiscal year end, they are not considered "available" revenues and are "deterred" in the governmental funds. Unearned revenues increased by this amount this year. 789,431 (Continued) -36- COUNTY OF HAWAII Reconciliation of the Change in Fuad Balances of Governmental Funds to the Statement of Activities For the Fiscal Year Ended June 30, 2019 (Concluded) Some items reported in the statement or activities do not involve current financial resources and therefore are not reported as expenditures in governmental funds. These activities are: Increase in inventories $ 582,959 Increase in compensated absences (1,275,734) Increase in claims and judgments (13,349,074) Increase in landfill closurelpostciosure care costs (1,008,000) Decrease in pollution remediation costs 703,526 Amortization of premium from bond issuance 6,299,484 Amortization of deferred loss on refunding (794,937) Amortization of gain on refunding 102,761 Net decrease in accrued interest 337,638 Net decrease to expenses related to Other Postemployment Benefit Obligation 1,050,927 Net increase to expenses related to pension and salaries and wages (48,468,934) Net additional expenses (55,819.384) Change in net position of governmental activities $ (11,914,519) See accompanying notes to the basic financial statements. -37- COUNTY OF HAWAII General Fund Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended lune 30, 2419 Revenues: Taxes and assessments: Property taxes Public service company taxes Total taxes and assessments Licenses and permits: Nonbusiness licenses and permits Business licenses Street use Total licenses and permits Intergovernmental: Federal: Programs for the aged Community development block grants Lav enforcement Other Total federal State: State General Fund -Act 185, SLH 1990 Emergency medical services Other Total State Total intergovernmental revenue Charges for services: General government Culture and recreation Highways and streets Public safety Total charges for services Fines and forfeitures Rents 4,252,620 2,067,101 3,042,000 9,361,721 4,252,620 2,067,101 3,042.000 9,361,721 4,135,116 1,841,249 3,212,756 9,189,121 2,499,718 2,507,883 Actual Original Final (Budgetary Budget Budget Basis) $ 317,000,000 $ 313,100,000 $ 313,631,189 8,840,000 8,840,000 8,493,409 325,840,000 321,940,000 322,124,598 4,252,620 2,067,101 3,042,000 9,361,721 4,252,620 2,067,101 3,042.000 9,361,721 4,135,116 1,841,249 3,212,756 9,189,121 2,499,718 2,507,883 1,570,260 - 2,766,347 2,766,347 3,446,808 4,405,901 3,079,344 3,465,047 6,728,844 7,005,613 9,411,573 16,408,975 14,421.564 19,158,000 19,158,000 19,158,000 16,830,274 19,509,182 19, 509,182 6,934,908 54,458,681 50,927,082 42,919,182 93,125,863 89,594,264 52,330, 755 109,534,838 104,015.828 4,660,883 1,830,900 1,212,000 111,768 7,815,551 2,310,300 208,500 -38- 4,660,883 1,830,900 1,212,000 111,768 �a•ac�tia■ 2,3 1 U,3im 208,500 4,586,432 1,298,306 957,931 115,337 6,958,006 1,203,014 208,812 Variance Positive (Negative) $ 531,189 (346,591] 184,598 (117,504) (225,852) 170,756 (172.600] (937,623) (1,326,557) '1^rc -rrn (1,987,4I1) (3,531.599) (3,531,599) (5,519,010) (74,451) (532,594) (254,069) 3,569 (857,545) (1,107,286) T11 (Continued) CK+1lh1116welago WI F&W I General Fund Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 2019 (Continued) -39- Actual Variance Original Final (Budgetary Positive Budget Budget Basis) (Negative) Revenues (continued): Interest and penalties $ 1,000,400 $ 1,000,000 $ 3,149,645 $ 2,149,645 Miscellaneous 4,858,196 5,360,418 5,417,664 (342,754} Total revenues 403,725,023 457,533,328 451,866,688 (5,664,640) Expenditures: Current: General government- Finance 13,266,249 13,268,008 11,065,1 18 2,202,890 General government building 5,430,344 5,710,344 5,309,814 400,530 Legislative 3,979,893 3,711,659 3,400,145 311,514 Automotive equipment 4,812,108 4,820,108 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 1,753,712 7,499,914 7,353,582 146,332 Engineering 1,807,685 1,496,685 1,296,585 200,100 Information technology 2,897,640 2,987,535 2,762,331 225,204 Human resources 2,1 19,860 2,119,940 1,920,550 199,390 Public works administration 2,118,316 2,261,316 2,122,635 138,681 Elections 1,121,204 1,121,204 1,022,663 98,541 Legislative auditor 786,540 786,540 577,835 208,705 Total general government 50,187,065 57,000,513 50,948,805 6,051,708 Public safety: Police department 67,294,563 67,985,533 64,978,267 3,007,266 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 1,020,449 Protective inspection 3,613,314 3,613,314 3,115,134 498,180 Liquor control 2,052,601 2,115,927 1,840,998 274,929 Flood control 330,000 330,000 330,000 - Civil defense agency 2,212,631 2,447,381 1,608,366 839,015 Animal control 2,185,706 2,185,706 2,081,625 104,081 Total pub Iic safety 136,405,834 140,415,289 133,516,502 6,898,787 Highways and streets: Mass transit 6,474,785 2,712,640 1,925,834 786,806 (Continued) -39- COUNTY OF HAWAII General Fund Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 2019 Expenditures (continued): Current (continued): Health, education and welfare: Elderly activities Office of aging Education Social programs Cemeteries Physical examination Total health, education and welfare Culture and recreation: Community music Organized recreation: Maintenance Recreation Aquatics Hoolulu park complex Administration Children's zoo Summerll ntersession Culture and arts Elderly activities administration Total culture and recreation Sanitation: Environmental management Pension and retirement contributions Employees' health insurance Other postemployment benefits Other Total current Actual Variance Original Final (Budgetary Positive Budget Budget Basis) (Negative) $ 4,306,190 $ 5,069,658 3,974,588 3,979,588 58,500 58,500 1,500,002 1,500,002 422,542 433,122 133,826 133,826 10,391,648 11,174,696 $ 4,398,743 $ 670,915 2,328,226 1,651,362 51,876 6,624 1,464,296 35,706 394,113 39,009 133,825 1 8,771,479 2,403,617 291,629 292,629 221,784 70,845 10,386,359 10,395,926 9,841,719 554,207 3,217,707 3,259,957 3,188,105 71,852 2,544,791 2,517,391 2,249,402 267,989 1,036,098 1,037,914 1,022,404 15,510 2,008, 737 1,849, 877 1,695,635 154,242 829,333 829,333 780,861 48,472 505,018 511,768 433,039 78,729 299,354 301,854 234,283 67,571 710,474 722,024 622,572 99,452 21,829,500 21,718,673 24,289,804 1,428,869 1,212,065 1,212,065 1,150,320 61,745 49,981,132 50,302,288 47,318,710 2,983,578 16, 000, 000 16,000, 000 14,704,495 1,295,505 39,806,000 39,806,000 39,654,111 155,889 5,160,500 46,268,100 42,212,481 4,055,619 337,448,529 386,610,264 360,488,141 26,122,123 -40- {Continued} COUNTY OF HAWAII General Fund Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 2019 Expenditures (continued): Capital Outlay: Community Development Block grants (HUD) HOME Program Other Total capital outlay Total expenditures Excess of revenues over expenditures Other financing sources (uses): Transfers out: Housing Fund Solid Waste Fund Sever Fund Golf Course Fund Capital Project Fund Self Insurance Fund Disaster/Emergency Fund Public Access, Open Space, and Natural Resources Preservation Fund Public Access, Open Space, and Natural Resources Preservation Maintenance Fund Budget Stabilization Fund Debt Service Fund Total transfers out Total other financing uses Excess (deficiency) of revenues and other sources over (under) expenditures and other uses Fund balance at beginning of year Fund balance at end of year See accompanying notes to the basic fin anciai statements. (Concluded) Actual Variance Original Final (Budgetary Positive Budget Budget Basis) (Negative) $ 150,000 $ 3,016,347 $ 2,820,994 $ 195,353 50,000 532,731 454,571 78,160 - 1,425,000 - 1,425,000 200,000 4,974,078 3,275,565 1,698,513 337,648,529 391,584,342 363,763,706 27,820,636 66,076,494 65,946,986 88,102,982 22,155,996 (2,012,389) (1,978,639) (1,256,200) 722,439 (19,281,770) (19,281,770) (19,281,770) - (2,987,914) (2,987,914) (2,987,914) - (580,368) (760,368) (760,368) - (2,000) (2,000) - - (1,000,000) (1,000,000) - (250,000) (250,000) (250,000) - (6,340,000) (6,292,000) (6,272,624) 19,376 (792,500) (786,540) (707,135) 79,365 (250,000) (250,000) (254,000) - (49,003,708} (49,205,130} (49105,13 - (81,498,649) (82,794,321) (81,973,141) 821,180 (81,498,649} (82,794,321) (91,973,141) 821,180 (15,422,155) (16,847,335) 6,129,841 22,977,176 61,0640,124 61,040,124 61,040,124 - $ 45,617,969 $ 44,192,789 $ 67,169,965 $22,977,176 Mlle 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 assess 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, current portion (note 10) Total current liabilities Noncurrent liabilities: Notes payable (note 10) Total liabilities Net Position Net investment in capital assets Unrestricted Total net position See accompanying notes to the basic financial statements. -42- Business -type Activities - Enterprise Funds Kulaimano Duli Ekahi Elderly Affordable Housing Housing Project Project Total $ 665,123 $ 515,042 $ 1,180,165 13,015 29,499 42,514 50 100 150 360 5,794 6,154 2,059 - 2,059 680,607 550,435 1,231,042 72,674 72,674 51I,000 515,727 1,026,727 1,224,273 488,823 1,713,096 (1,266,753) (107,516} (1,374,269) 468,520 897,034 1,365,554 468,520 969,708 1,438,228 1,149,127 1,520,143 2,669,270 16,219 15,637 31,856 3,500 - 3,500 13,015 28,050 4I,065 383 896 1,279 8,815 - 8,815 66,186 36,334 102,520 108,118 80,917 189,035 463,688 131,569 595,257 571,806 212,486 784,292 (61,354) 729,131 667,777 638,675 578,526 1,217,201 $ 577,321 $ 1,307,657 $ 1,884,978 COUNTY OF HAWAII Proprietary Funds Statement of Revenues, Expenses, and Changes in fund Net Position For the Fiscal Year Ended June 30, 2019 Operating revenues: Rental receipts from tenants Rental subsidy From federal government - HUD Laundry receipts Other Totai operating revenues Operating expenses: Utilities General and administration Maintenance and repairs Depreciation (note 6) Total operating expenses Operating income Nonoperating revenues (expenses): Investment income Interest expense (Loss) on disposal of assets Total nonoperating revenues (expenses) Change in net position Net position, beginning of year Net position, end of year See accompanying notes to the basic financial statements -43- Business -type Activities - Enterprise Funds Kulaimano Ouh Ekahi Elderly Affordable Housing Housing Project Project Total S 139,374 S 333,709 S 473,083 261,848 - 261,848 3,070 - 3,070 266 33,933 34,199 404,558 367,642 772,200 36,670 58,086 94,756 159,979 104,593 264,572 67,409 100,514 167,923 34,397 15,639 50,036 298,455 278,832 577,287 106.103 88,810 194,913 8,213 21 8,234 (28,345) - (28,345) (3.854) - [3.854) {23,986) 21 (23,965) 82,117 88,831 170,948 495,204 1,218,826 1,714,030 S 577,321 $ 1,307,657 S 1,884,978 COUNTY OF HAWAII Proprietary Funds Statement orCash Flows For the Fiscal Year Ended June 30, 2019 See accompanying notes to the basic finaticial statements -44- Business -type Activities - Enterprise Funds Kulaimano Ouli Ekahi EldcrIy Affordable Housing Housing Project _ Project Total Cash Flows from Operating Activities Receipts from tenants $ 138,702 $ 364,751 $ 503,453 Receipts from federal government - HUD 261,848 - 26I,848 Payments to suppliers for goods and services (248,484) 2� 52,082] 5- ( 00,566] Net cash provided by operating activities 152,066 112,669 264,735 Cash Flows from Capital and Related Financing Activities Principal paid on notes payable (62,622) (46,606) (109,228) Interest paid on notes payable (29,533) - (29,533) Purchase of capital assets (16,202) (70 0) (I6,902} Net cash used in capital and related rtnancing activities 108,35 (47,306] (155,663) Cash Flows from Investing Activities Proceeds from maturities of investments 1,600,000 - 1,600,000 Purchase of investments (1,600,000) - (1,600,000) Interest on investments 8,131 21 8,152 Net cash provided by investing activities 8,131 21 8,152 Net increase (decrease) in cash and cash equivalents 51,840 65,384 117,224 Cash and cash equivalents al beginning of year (including restricted cash and cash equivalents) 626,348 551,931 1,178,279 Cash and cash equivalents at end of year (including restricted cash and cash equivalents) $ 678,188 $ 617,315 $ 1,295,503 Reconciliation of Operating Income to Net Cash Provided by Operating Activities Operating income $ 106,103 $ 88,810 $ 194,913 Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation expense 34,397 15,639 50.036 Change in assets and liabilities: Receivables, net (13) (756) {769) Prepaid expenses (191) - (191) Accounts and other payables 11,686 9,198 20,884 Deferred revenue 84 (222) �(138� Net cash provided by operating activities $ 152,066 $ 112,669 $ 264,735 See accompanying notes to the basic finaticial statements -44- COUNTY OF HAWAII Fiduciary Funds Statement of Fiduciary Net Position June 30, 2019 Liabilities Vouchers payable Private - Due to other agency funds - 7,242 Purpose Agency Advances payable Trusts Funds Assets Total liabilities - $ 5,023,263 Cash and cash equivalents (note 3) $ 1,009,484 $ 4,318,542 Investments (note 3) 3,625,610 645,009 Receivables: Due from other agency funds 7,242 Other receivables 5,845 52,470 Total receivables 5,845 59,712 Total assets 4,640,939 $ 5,023,263 Liabilities Vouchers payable - 76,315 Due to other agency funds - 7,242 Accrued liabilities - 3,116,482 Advances payable - 353,956 Assets held for the benefit of improvement districts - 1,469,268 Total liabilities - $ 5,023,263 Net Position Held in trust for other parties 4,640,939 Total net position $ 4,640,939 See accompanying notes to the basic financial statements. -45- COUNTY OF HAWAII Fiduciary Funds Statement of Changes in Fiduciary Net Position For the Fiscal Year Ended June 30, 2019 See accompanying notes to the basic financial statements E%i Private - Purpose Trusts Additions Contributions: Puna Geothermal Venture S 50,040 Investment earnings: Net increase in fair value of investments 105,684 Dividends and interest 71,056 Total additions 226,740 Deductions Claims Consultant 293,760 Grant payments 94,418 Investment Fees 13,495 Total deductions 401,573 Change in net position (174,933) Net position, beginning of year 4,815,872 Net position, end of year $ 4,540,939 See accompanying notes to the basic financial statements E%i AWIN 1Wdcalm a: F.VN.. i Nates to the Basic Financial Statements June 30, 2019 The accounting policies of the County of Hawai` i (the County) conform to U.S. generally accepted accounting principles (GAAP) as applicable to local governmental units. The following notes to the basic financial statements are an integral part of the County's Comprehensive Annual Financial Report (CAFR). SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Financial Reporting Entity The County has implemented Governmental Accounting Standards Board Statement No. 14, The Financial Reporting Entity (GASB Statement No. 14), Statement No. 39, Determining Whether Certain a-ganizations Are Component Units (GASB Statement No. 39) and Statement No. 61, The Financial ReportingEntiry: Oi nribus an a►nendnrent of GASB Statements 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. Prinrary Government The County operates under the Mayor -Council form of government under a charter that became effective on January 2, 1969, and was amended in 1979, 1982, 1990 and 2000. The County's operations are organized by the following functions: general government; public safety; highways and streets; sanitation; health, education and welfare; culture and recreation; pension and retirement contributions; health fund; miscellaneous; capital outlay; and debt service. The State of Hawaii (the State) assumes full responsibility for several major functions usually performed by local governments, including education, welfare, health and judicial functions. There are no separate city, county or township governments nor any school districts, special districts, authorities or public corporations with overlapping authority. GASB Statement No. 14, as amended, defines component units as legally separate organizations for which the elected officials of the primary government are financially accountable or for which the primary government may determine, through exercise of management's professional judgment, that the inclusion of an organization that does not meet the financial accountability criteria is necessary in order to prevent the reporting entity's financial statements from being misleading. "Financial accountability" is the level of accountability that exists if a primary government appoints a voting majority of an organization's governing board or if the organization is fiscally dependent on the primary government and is either able to impose its will on that organization or there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the primary government. A primary government has the ability to impose its will on an organization if it tali significantly influence the programs, projects, activities or level of services performed or provided by the organization. An organization has a financial benefit or burden relationship with the primary government if any one of three conditions exist: (1) The primary government is legally entitled to or can otherwise access the organization's resources; (2) The primary government is legally obligated or has otherwise assumed the obligation to -47- COUNTY OF HAWAPT Notes to the Basic Financial Statements June 34, 2019 finance the deficits of, or provide financial support to, the organization; or (3) The primary government is obligated in some manner for the debt of the organization. As required by GAAP as set forth in GASB Statement No. 14, No. 39 and No. 61, these basic financial statements present the County of Hawaii (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. Discretely Presenter! Component Unit The component unit column in the basic financial statements includes the financial data of the Department, a legally independent agency of the County that is accounted for as an enterprise fund. It is reported in a separate column to emphasize that it is legally separate from the County. The members of the Water 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 the County Charter. Although the County does not have the authority to approve or modify the Department's operational and capital budgets, the County has issued bonds on the Department's behalf that are general obligations of the County. Because the County is obligated to repay these bonds in the event of default by the Department, the County is financially accountable for the debts of the Department. See Note 14 for component unit disclosures for the Department. Complete financial statements of the Department can be obtained from the Department of Water Supply, 345 Kekuana6`a Street, Suite 20, Hilo, Hawaii 96720. Basic Financial Statements The basic financial statements include both government -wide (based on 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-term 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. The operating grants include operating -specific and discretionary (either operating or capital) grants while the capital grants column reflects capital -specific grants. The net cost (by function or business -type activity) is normally covered by general revenues. K11-11 COUNTY OF HAWAII Notes to the Basic Financials Statements June 30, 2014 The government -wide focus is more on the sustainability of the County as an entity and the change in aggregate financial position resulting from the activities of the fiscal period. The fund financial statements' emphasis is on the major funds in either the governmental or business -type categories. Nonmajor funds (by category) are summarized into a single column. The governmental funds in the fund financial statements are presented using the current financial resource focus and modified accrual basis of accounting. This is the manner in wh ich 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. The 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 government -wide statements. Government -wide anal frrnd financial slalements -- The government -wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component unit. The effect of interfund activity has been removed from these statements during the process of incorporating fund data but interfund services provided and used have not been eliminated in the process of consol idation. 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, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the 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 segment. 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 HAWAV I Nates to the Basic Financial Statements June 30, 2019 Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government -wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. Activities in funds — The financial transactions of the 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 expend itureslexpenses. The various funds are reported by generic classification within the financial statements. GASB Statement No. 34, Basic Financial Statements - and Manage►new's Discussion and Analysis -- floe Stare and Local Governinents, sets forth minimum criteria (percentage of the assets, deferred outflows of resources, liabilities, deferred inflows of resources, revenues or expend itureslexpenses of either fund category or the governmental and enterprise combined) for the determination of major funds. The nonmajor funds are combined in a column in the fund financial statements and detailed in the combining section. The County reports the following major governmental funds: General Favid — 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. Capital Projects Fund — Used to account for the costs of constructing County capita 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 project centers are needed to control costs. The County reports the following major proprietary funds: Kula`inrano Elderly Housing Project — Used to account for the operation of a rental housing project for low-income senior citizens located north of Hilo. Guli Ekahi Affordable Housing Project — Used to account for the operation of a 33 -unit single-family affordable rental housing project located in Waimea. -54- COUNTY OF HAWAII Notes to the Basic Financial Statements June 30, 2019 The County reports the following fiduciary funds: Private -Purpose Trust Funds — Used to account for funds received from geothennal 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'':. Agency Funds — 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 measurement of results of operations. The County has the following agency funds: • State Weight Tax Fund • Improvement District No. 18 Fund • Improvement 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 l-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 timing 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. Modified Accrual Basis - Revenues are recorded when susceptible to accrual (that is, both measurable and available). "Measurable" means the amounts are determinable. "Available" means the amounts are collectible within the current period or soon enough thereafter (one year for intergovernmental revenues) to be used to pay liabilities of the current period. -5i- COUNTY OF HAWAVI Notes to the Basic Financial Statements June 30, 2019 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 requirements of the numerous individual programs are used as guidance. There are essentially two types of these revenues. In one, monies must be expended on the specific purpose or project before any amounts will be paid to the County; therefore, revenues are recognized based upon the expenditures recorded. Most construction grants and many operating grants fall into this category. in the other, 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 time of receipt or earlier if the 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 bots} the "measurable" and "available" criteria for recognition in the 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 judgments 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 remediation . The County applies all applicable GASB pronouncements, including the adoption of GASB Statement No. 62, Codificalion of Accoun ing and Financial Reporting Guidance Contained in Pre -November 30, 1989 FASB (Financial Accounting Slandards Board) acrd AICPA (American Inslilute of Cerlifred Public Accounlanis) Pronouncements. Encumbrances 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 the 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. -52- COUNTY OF HAWAII Notes to the Basic Financial Statements .tune 30, 2419 Cash and Investments Cash and cash equivalents include cash on hand, amounts in demand deposits and savings accounts, and short-term investments with a maturity date of three months or fess from the date acquired by the 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 investment contracts (time certificates of deposit and repurchase agreements). Both categories 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 Home Loan Mortgage Corporation (Freddie Mac) are based on quoted market rates. Investments also consist of equity securities in the fiduciary fund financial statements. These 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. The taxes become a lien on the property assessed as of the levy date. Taxes are due and payable in two equal annual installments on August 20 and February 20. Accordingly, real property taxes receivable as of lune 30 are delinquent. Each delinquent installment bears interest at 1 % per month and penalties of up to 10% of the amount due. Assessments are based on 100% of estimated fair market values prior to the application of exemptions or preferential assessments. The County 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 19-89.3 of the 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. The 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 Exemption — Section 19-89.1 of the Hawaii County Code and Rule 36 of the Rules and Regulations of the Director of Finance provides an exemption to encourage the preservation of residential structures that have been placed on 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 the continued existence of the historic status. This dedication is for a minimum period of ten years, Mr1910 LL�1�Ji�'i*�Di►J:�iil Notes to the Basic Financial Statements June 30, 2019 automatically renewable indefinitely. Cancellation of the 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 of the 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 l 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(e) 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 and Moderate -Income Housing Exemption — Section 19-87 of the Hawaii County Code and Rule 37 of the Rules and Regulations of the Director of Finance provides an exemption for a housing project which is owned and operated by a nonprofit or limited distribution mortgagor or by a qualified entity from taxation. Must participate in long-term housing project that have regulatory agreements mandating rent levels, occupancy of the project is limited to the elderly, handicapped, low or moderate income families. Applicants must submit an application form along with a copy of the recorded regulatory agreement. The exemption is equal to 100% of the assessed value for the portion of the real property that is dedicated as low- and moderate -income 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(e) of the HawaVi County Code. Tile exemption shall continue so long as the rental housing project is owned and operated by a nonprofit or limited mortgagor. If the rental units do not comply with the regulatory conditions, the property would be subject to roll back taxes, including penalty and interest. Non Dedicated Agricultural Use Assessment — Section 19-57 of the Hawaii 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. 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 review and approval, the application is effective as of January l for the following tax year. Renewal of the application shall be in such form and at such time as requested by the director. Valuation consideration is given to the type of agricultural activity. Any breach to the terms of would result in an immediate rollback calculation of current plus two yeas taxes plus penalties and interest. Commercial Agricriltural Use Dedication — Section 19-60 of the Hawaii County Code and Rule 31 of the Rules and Regulations of the 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 -54- ��I�11tJ��i3�:►ii.7:lfij Notes to the Basic Financial Statements .lune 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 automatically renew. Valuation consideration is given to the type of agricultural activity. Any breach to the terms 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 Heater Credit- Section 19-104 of the Hawaii County Code provides a one time tax credit per tax map 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, 2008. This program was created with the purpose of 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 Abatement Program Enterprise Zone Historic Residential Dedication Low and Moderate Income Housing Agricultural Use Programs Solar Water Heater Credit Inventories Amount of Taxes Abated - as defined by GASB 77 $1,240.75 $219,565.30 $698,031.$6 $34,370,074.48 $25,121.77 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 Hawaii Revised Statutes requires that liquor license revenues collected be used only for costs and expenses directly relating to operational and administrative costs actually incurred by the liquor commission collecting such fees. The unexpended fees at .Tune 30, 2019 of $799,769 are reflected as a restriction of general fund balance. -55- COUNTY OF HAWAII Notes to the Basic Financial Statements June 30, 2019 Capital Assets 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 the applicable governmental or business -type activities columns in the government -wide financial statements. Capital assets are defined by the County as assets with an initial, individual cost of more than $1,000 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 the asset or materially extend the life of the asset are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business -type activities is included as part of the capitalized value of the assets constructed. Capital assets of the primary government and enterprise fund are depreciated using the straight-line method over the following estimated useful lives of the assets: Assets Infrastructure Buildings and improvements Ground and site improvements Equipment Easements Years 20 to 100 years 50 to 100 years 20 to 50 years 5 to 40 years Dependent on terms of easement 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 items that qualifies for reporting in this category. The County reports the deferred foss on refunding and deferred outflow related to both pensions and other postemployment benefits (OPEB) 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, fees and other non-exchange transactions received in the current fiscal year for the ensuing fiscal year are reported as deferred inflows of resources. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. The County also reports deferred inflows of resources related to both pensions and other postemployment benefits (OPER). -56- COUNTY OF HAWAII Notes to the Basic Financial Statements June 30, 2019 Long-term Obligations The County reports long-term 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 of net position. Long-term debt and other obligations 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 can be accumulated per employee. In addition, employees who work overtime can elect to take compensatory time off instead of overtime pay. The time off is earned at the rate of one -and -a -half hours for each hour of overtime worked. There is no statutory limit to the amount of compensatory time off an employee can accumulate. Both compensatory time off and vacation credits are converted to pay upon termination of employment. 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 amounts. 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 Leases transferring substantially all of the risks and benefits of ownership are recorded as capital leases; other leases are operating leases (see Mote 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 minimum lease obligations is recorded as long-term debt. Operating lease expenditures and expenses are recognized when the lease obligation is paid. Pensions For purposes of sneasuring the net pension IiabiIity, 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 Hawaii (ERS) and 57- COUNTY OF HAWAVI Notes to the Basic Financial Statements .tune 30, 2019 additions to and deductions from FRS's fiduciary net position have been determined on 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 of resources related to OPER, and OPEB expense, information about the fiduciary net position of the Hawaii Employer -Union Health Benefits Trust Fund ("EUTF"} and additions to/deductions from EUTF's fiduciary net position have been determined on the same basis as they are reported for EUTF. For this purpose, EUTF recognizes benefit payments when due and payable in accordance with the benefit terms. investments are reported at fair value, except for investments in commingled and money market funds, which are reported at net asset value (NAV). The 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 nonoperating items for tate 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 and rental subsidies received from 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 tate 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 -58- COUNTY OF HAWAII Notes to the Basic Financial Statements June 34, 2019 unassigned amounts when expenditures are incurred for purposes for which amounts 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 nonspendable 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 Hawaii Revised Statutes or County of Hawaii 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 same manner. The committed fund balance of the General Fund includes the portion of fund balance committed to budget stabilization. The budget stabilization portion is authorized under County Code §2-219 to §2-223 and additions are made via the County budget or subsequent budget amendments. The fund balance may 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 are 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 year's annual budget ordinance. Unassigned Fuad Balance — This is the residual classification of the General Fund. The General Fund is the only fund that could potentially report a positive unassigned fund balance. The category of Other for the Restricted, Committed and Assigned fund balances on 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 programs. -59- COUNTY OF HAWAVI Nates to the Basic Financial Statements June 30, 2019 Net Position 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 Pronouncements In November 2016, GASB issued Statement No. 83, Certain Asset Retirement Obligations. This Statement addresses accounting and financial reporting for certain asset retirement obligations ("AROs" ). An ARD is a legally enforceable liability associated with the retirement of a tangible capital asset. A government that has legal obligations to perform 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 2017, GASB issued Statement No. 84, Fiduciary Activities. The principal objective of this Statement 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 determined the effect this Statement will have on its financial statements. In June 2017, GASB 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 March 2018, GASB issued Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements. The 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. The County implemented these requirements for the fiscal year ended June 30, 2019. 1n June 2018, GASB issued Statement No. 89, Accountingfor Interest Cost Incurred Before the End of a Constriietiorr Period. The objectives 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 December 15, 2019. The County has not yet determined the effect this Statement will have on its financial statements. 1113111M COUNTY OF HAWAPI Notes to the Basic Financial Statements June 30, 2019 In August 2018, GASB issued Statement No. 90, Majority Equity Interests -An Amendment of GASB Statements 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. The requirements of this Statement are effective for reporting periods beginning after December 15, 2018. The County has not yet determined the effect this Statement will have on its financial statements. In May 2019, GASB issued Statement No. 91, Conduit Debt Obligations. The objectives of this Statement are to provide a single method of reporting conduit debt obligations by issuers. The requirements 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 on its financial statements. 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY Annual Budget The County follows these procedures in establishing its operating and capital budgets: ■ On or before March 1, the Mayor submits to the County Council proposed operating and capital projects budgets for the fiscal year commencing the following July 1. The operating budget includes proposed expenditures for the general fund and special revenue funds, and the means of financing them. A project -length budget is submitted to the County Council for the capital projects fund. • The Mayor submits to the County Council amendments to the proposed operating and capital budgets within ten working days after the close of the state legislature, but not later than May 5. • The County Council conducts public hearings on the proposed operating and capital budgets after March 1 but prior to the first reading on the budget bills, which must be after May 5. ■ On or before June 30, the County Council adopts the budgets. The legal level of budgetary control is the department level because the Mayor can transfer funds from any unencumbered appropriation to another within a department or agency without 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 from sources not anticipated at the time of the original budget and to establish the authorization for such funds to be expended. Such supplemental appropriations totaled $7.7 million in the general fund and $3.3 million in the special revenue funds. Legally adopted budgets include the General Fund, K4' E COUNTY OF HAWAII Dotes to the Basic Financial Statements June 30, 2019 Highway Fund, Sewer Fund, Solid Waste Fund, Cemetery Fund, Parking Meter Fuad, Vehicle Disposal Fund, Bikeway Fund, Workforce Investment Act Fund, Golf Course Fund, Geothermal Relocation and Community Benefits Fund, Beautification Fund, Hawaii County Housing Agency Fund, Park Dedication Fund, General Excise Tax Fund, and Short -Term 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 made. Formal budgetary integration is employed as a management control device during the year for the General Fund, special revenue funds, and Capital Projects Fund. Formai 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 the legally adopted budget with actual data on a budgetary basis. Accounting principles applied for purposes of developing data on a budgetary basis differ significantly from those used to present financial statements in conformity with GAAP. On the budgetary basis, intergovernmental revenues are recognized when awarded by the granting agency, encumbrances and unexpended allotments are treated as expenditures, accounts payable are not accrued, and all leases are treated as operating leases. In preparing the financial statements on a GAAP basis, accounts payable are accrued and treated as a reduction of encumbrances for balance sheet presentation. Budget to GAAP Reconciliation The following is a summary of the adjustments necessary to convert fund balances of the County's General Fund from 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 (1,156,034) Other adjustments {9,788 602 Ending fund balance — ]Von -GAAP budgetary basis $67,169,965 IN pill CiTA aRtll,301N 161 The Director of Finance is responsible for the safekeeping of all monies paid to the County. The Director of Finance invests any monies of the County which in the Director's judgment are in excess of the amounts necessary for meeting the day-to-day operating needs of the Mom COUNTY OF HAWAII Nates to the Basic Financial Statements June 30, 2419 County. Under Section 46-50 of the Hawaii Devised Statutes, legally authorized investments include obligations of or guaranteed by the U.S. government, obligations of the State, federally insured savings and checking accounts, time certificates of deposit, and repurchase agreements with federally insured financial institutions. Cash The County maintains a number of checking and savings accounts for various funds and with various financial institutions. Bank deposits are under the 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 maturities of three months or less. The carrying amount of the County's deposits (cash, time certificates of deposit, and money market accounts) as of .lune 30, 2014 was $243,317,332 for the primary government and $5,843,086 for the fiduciary funds. Information relating to bank balance, insurance and collateral of cash deposits is detenn'ined 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 uncollateralized. Accordingly, these deposits were exposed to custodial credit risk. Custodial credit risk is the risk that in the event of a bank failure, the County's deposits may not be returned to it. For checking and savings accounts, time certificates of deposit, and repurchase agreements, the County requires, in accordance with State statutes, that the depository banks pledge collateral based on the available bank balances for the protection of the 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. Investments The County holds investments both for its own benefit and on behalf of some of the fiduciary funds. The County's investments of funds not required for immediate payments are predominately comprised of government sponsored securities (equivalent to the rating in U.S. Treasuries), repurchase agreements and certificates of deposit, while the fiduciary funds also hold equity securities. -63- COUNTY OF HAWAII Notes to the Basic Financial Statements June 34, 2019 The framework for measuring fair value provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1) and the lowest priority to unobservable inputs (level 3). The three levels of the fair value hierarchy are described as follows: Level I — Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that a government can access at the measurement date. An 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 1 that are observable for an asset or liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a level 2 input must be observable for most of the full 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 in markets that are not active, • inputs other than quoted prices that are observable for the asset or liability, • Inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 — Inputs are unobservable for an asset or liability. Following is a description of the valuation techniques used by the County to measure fair value: Government sponsored securities of $27,002,280 and certificates of deposits of $41,296,655: Valued using quoted prices for identical or similar assets in markets that are not active (Level 2). Equity securities of $1,708,073: Valued using quoted prices in active markets for identical assets or liabilities that a government can access at the measurement date (Level 1). -64- COUNTY OF HAWAII Notes to the Basic Financial Statements June 30, 2019 The County's investments and maturities at .lune 30, 2019 are as follows: Investments - Primary Government: Certificates of deposit Government sponsored securities Investments - Private -Purpose Trusts: Government sponsored securities Equity securities Investments - Agency Funds: Certificates of deposit Government sponsored securities Maturi!y (in years] Fair Value Less than 1 1 - 5 $ 40,821,595 $ 33,137,273 $ 7,684,322 24,914,794 2.987,d20 21,927,174 $ 65,7343389 $ 34,124,$93 $.29.611,4.94 $ 1,917,537 $ -- $ 1,917,537 1,708,073 1,708,073 -- $__3,02%614 $ l 70$,073 $ 13917,537 $ 475,060 $ 225,000 $ 250,060 159.949 -- 159,949 $ 645,449 $ 225AO $ 420,009 In forest Rate Risk: The County minimizes its exposure to interest rate risk by limiting the maturities of investments to five years or less in compliance with state statute. The County's policy is to hold investments until maturity and does not engage in trading for capital gains. Credit 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 equivalent to U.S. Treasuries. Custodial Risk: Custodia] risk is the risk of loss from the failure of the counterparty, which is defined as any entity that obtained an investment on behalf of the County. All of the County's deposits including repurchase agreements are secured by collateral which is kept by a third party custodian. Broker-dealers utilized by the County are members of the Securities Investor Protection Corporation, and all investment securities are held in the County's name. Concenwation of 0 -edit 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 different types of investments and by purchasing investments at different maturities. The County also purchases its investments from a number of banks and broker-dealers both located locally and on the mainland. As of June 30, 2019, investments were distributed as follows: FTN Financial, 3.2%; Multi Bank Securities, 1 1.3%/ First Hawaiian Bank, 17.9°/x; Raymond lames, 3.2%; Stifel Nicolaus & Company, 3.5%; Bank of Hawaii, 20.7°/x; Territorial Savings 17.4%; US Bank, 6.3% and Central Pacific Bank, 15.5%. -65- COUNTY OF HAWAPI Nates to the Basic Financia! Statements June 30, 2019 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 improvement 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 $14,227,015. 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 amounted to $1,833,974. The restricted cash and investments in the General Fund was comprised of cash restricted to costs incurred to administer the liquor commission and cash restricted to the acquisition and maintenance of farads or property entitlements for public outdoor recreation and education. Such amounts totaled $799,769 and $25,831,368, respectively. Tenant security deposits received by the County for the Kula`imano Elderly Housing Project and the Duli Ekahi Affordable Housing Project are recorded as restricted assets. Such funds amounted to $13,015 and $29,499, respectively, at .lune 30, 2019. An operating reserve fund was established by the GuIi Ekahi Affordable Housing Project pursuant to an agreement with the Hawaii Housing Finance and Development Corporation, who are the holders of the project's note. This restricted reserve amounted to $72,674 at June 30, 2419. COUNTY OF HAWAII Notes to the Basic Financial Statements June 30, 2419 4. RECEIVABLES 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 Less: allowance for uncollectibles Net total receivables Capital General Projects Fund Fund $30,604,707 $ -- 22.463.558 7,913, 199 53,068,265 7,913,199 {4,674,540 -- �q�� Other Governmental Funds Total $ -- $30,604,707 2,307,228 2,307,228 1,632,145 1,632,145 13,643,040 44,019,797 17,582,413 78,563,877 7_f 55,287) (5,429,827) $ t 6$27.126 MdaA�= During fiscal year 2005, the 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 refund the outstanding principal balance of $1,345,945 for the Improvement 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 June 30, 2019, the outstanding balance for bath Improvement Districts of $1,994,867 is reflected in the government -wide statement of net position as a receivable (see Note 10). Business -type activities: -67- Enterprise Funds Accounts receivable: Rent $19,332 Other 1,059 Gross receivables 20,391 Less: allowance for uncollectibles (14,237) Net total receivables $. 6t15-4 -67- COUNTY OF HAWAII Notes to the Basic Financial Statements .lune 30, 2019 5. INTERFUND RECEIVABLES AND PAYABLES Interfund receivables and payables consist of the following at June 34, 2019: Receivable Fund Payable Fund General fund Capital projects fund Other governmental funds Capital projects fund Other governmental funds Total Other governmental funds General fund Other governmental funds General fund Other governmental funds Enterprise funds r�w�wwn $ 444,296 2,182,337 2,626,633 50,622 2.659.603 2,710,225 517,278 138.517 655.795 13,504 The above interfund balances result from the time lag 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 .lune 30, 2019 consisted of the following: Transfers out: Capital General Projects Fund Fund Transfers in: Capital Projects Fund $ 2,000 Other governmental funds _69,615,396 $6-9fi17,396 A_ -- Other Governmental Funds Total $7,623,045 $ 7,625,045 -- 69,615 396 $7,621,045- $7714—N 411 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. -68- COUNTY OF HAWAII Notes to the Basic Financial Statements 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, 2018 Additions Transfers 2019 Governmental activities: Capital assets not being depreciated: Land and improvements $ 256,390,951 Easements 6,151,809 Construction work in 58,455,811 progress 50,591,695 Total capital assets not being depreciated 313,134 455 Capital assets being depreciated: Buildings and improvements 759,868,720 Equipment 159,929,306 Easements 456,497 Infrastructure 624,904261 Total capital assets being depreciated 1,545,158,784 Less accumulated depreciation for: Buildings and improvements (128,144,907) Equipment (101,410,508) Easements (439,300) Infrastructure (315,608,434) Total accumulated depreciation (545,199,149) Total capital assets being depreciated, net _ 999,959,635 $ 7,079,367 S -- S 263,470,318 81,072 -- 6,232,881 37,263,612 (29,399,496) 58,455,811 44,424,051 (29,399,496) 328,159,010 8,940,248 (10,000) 768,798,968 10,255,404 (5,609,572) 164,575,138 -- -- 456,497 28.441.706 -- 653.345,967 47,637,358 (5,619,572) 1,587,176,574 (12,917,110) 5,621 (141,052,396) (9,210,180) 4,982,653 (105,238,035) -- -- (439,300) (24,858,776) -- (340,46.7,210) (46,986,066) 4,988,274 (587,196,941) 651,292 (631,298) 999,979,628 Governmental activities capital assets, net SM13,094,Q90 5 45,475, 43 _($3UN,794) x,328,138.639 MIRE COUNTY OF HAWAII Notes to the Basic Financial Statements June 30, 2019 Balance Retirements/ June 30, Additions Transfers 2019 753,877 -- 1,593,187 -- -- 272,850 16,902 (33,870) 119.909 16,902 (33,870 1,985,946 (36,044) Balance (4,347) July I, (9.645) 2018 Business -type activities: 30,015 (1,374,269) Capital assets not being depreciated: Land $$ 7877 Capital assets being depreciated: Buildings and improvements 1,593,187 Ground and site improvements 272,850 Equipment 136,877 Total capital assets being depreciated 2,002,914 Less accumulated depreciation for: Buildings and improvements (1,018,733) Ground and site improvements (219,304) Equipment (116,211 ] Total accumulated Depreciation (1,354,248] Total capital assets being depreciated, net 548,666 Business -type activities capital assets, net $ I }4(,2.543 Balance Retirements/ June 30, Additions Transfers 2019 753,877 -- 1,593,187 -- -- 272,850 16,902 (33,870) 119.909 16,902 (33,870 1,985,946 (36,044) -- (1,454,777) (4,347) -- (223,551) (9.645) 30,415 (95,841 } (50,036) 30,015 (1,374,269) (33,134) (3,855} 611,677 5(33,13Q $ (3,855] $i,30,554 IKIZ COUNTY OF HAWAII Notes to the Basic Financial Statements June 30, 2419 Depreciation expense was charged to functions/programs 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 Health, education and welfare 2,216,007 Culture and recreation 3,518,739 Total depreciation expense - governmental activities $46,984,.066 Business -type activities: 56,510 Kula`imano Elderly Housing Project $34,397 Ouli Ekahi Affordable Housing Project 15,639 Total depreciation expense - business -type activities X59,06 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 Funds Funds $ 27,663,902 $ -- $ -- $ -- $ 27,663,902 193,894 -- -- -- 193,894 -- -- -- 1,626,672 1,626,722 -- -- -- 56,514 56,510 -- -- -- 1,557,414 1,557,118 27,857,796 -- 15,443,306 -- -- 3,240,596 31,698,392 -- -- 15,443,306 {25,930167} -- -- X24,_ 0,596) 29170,763) $ 16,97%_93 $ _ $ -- $ -- $ 16,970,935 -71- COUNTY OF HAWAII Notes to the Basic Financial Statements June 30, 2013 S. LEASES The County leases machinery and equipment under noncancellab le leases expiring at various dates through December 2024. These capital leases are financed from the resources of various funds. The estimated value of the leased machinery and equipment at the inception of the capital leases and accumulated depreciation, amounting to $18,275,001 and $2,573,568, respectively, and the related present value of the remaining obligations under the capital leases amounting to $11,579,332 at .lune 30, 2019 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. Expenditures for such operating leases were $1,997,965 for the fiscal year ended Juste 30, 2019. The future minimum payments under capital and operating leases at June 30, 2019 are as follows: Obligations under capital leases -72- Capital Operating Leases Leases Year Ending June 30: 2020 $3,641,620 $ 1,349,940 2021 3,31 1,855 1,238,527 2022 2,480,959 1,147,339 2023 1,954,921 478,101 2024 719,071 194,509 2025-2029 117,129 240,072 2030-2034 -- 2,156 2035-2039 -- 900 2040-2044 -- 900 2045-2048 195 Total minimum lease payments 12,225,555 $ i 2.fi49 Less amount representing interest (646,234 Obligations under capital leases -72- COUNTY OF HAWAII Nates to the Basic Financial Statements June 30, 2019 9. SOLID WASTE LANDFILL CLOSURE AND POSTCLOSURE CARE COSTS Hilo Landfill The County owns and operates a landfill located in the city of Hilo. State and federal laws require the County to place covers on certain landfill sites and to monitor and maintain the sites for thirty years after the facility is closed. Although the closure and postclosure care costs will be paid near and after the date that the landfill stops accepting waste, the County recognizes a portion of the closure and postclosure care costs in each operating period. The liability for these costs is included in the government -wide statement of net position. The amount recognized each year is based on the 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 the landfill. During the fiscal year ended June 30, 2019, there was $127,000 in expenditures incurred for the closure of the landfill. The remaining $457,000 in estimated cost of closure and postclosure 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 4, 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. Kealakelre In October 1993, the County closed its Kealakehe landfill in Kona. Under state and federal requirements, the County would have to monitor and maintain this site for ten years from the closure date. However, the County anticipates monitoring and maintaining the site for thirty years because there is presently a subterranean fire which requires active management. The estimated cost of closure and postclosure 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. -73- COUNTY OF HAWAII Notes to the Basic Financial Statements June 30, 2019 The remaining estimated liability of $8,252,000 is included in the government -wide statement of net position. During the year ended June 30, 2019, $55,000 was spent on closure of the landfill. The County is providing financial assurance for postclosure care and remediation through self insurance as explained below. Pu'uanahulu In May 1993, the County contracted with a private company to construct and operate a new landfill on County land at Pu'uanahulu in West Hawaii. The present contract calls for County employees to perform the daily operations of the landfill, and for the private company to retain the overall management as well as perform all construction work on the landfill cells. Under the terns of the contract, the County has no responsibility for remediation, closure or postclosure care. Accordingly, no liability for this landfill is included in the County's financial statements. Financial Assurance For fiscal year 2019, the County has provided for financial resources that will be available to provide for closure, postclosure care and remediation or containment of environmental hazards at the above landfills, except Pu'uanahulu. The Environmental Protection Agency's financial assurance rules include a local government financial test consisting of a financial component, a public notice component, and a record keeping 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. The estimated liability of approximately $12,443,000 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 time due to inflation or deflation, changes in technology, or changes in laws and regulations governing the remediation effort. -74- COUNTY OF HAWA141 Notes to the Basic Financial Statements .lune 30, 2019 IttARKI t~ OM -1131l d 11131:31 t General Obligation Sands The County issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. These bonds have been issued by the County for the primary government, component unit activities {see Note 14} and an improvement district. The County's general obligation bonds are an absolute and unconditional general obligation of the County for which its full faith and credit are pledged. The 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" under the American Recovery and Reinvestment Act of 2049. The County will receive a cash subsidy payment from the United States Treasury equal to 45% of the interest payable on the Series B bonds. The following is a summary of general 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 issue Bond Balance Bond Balance Due Within Authorized Amount July I. 2018 Issues Retirements June 30, 2014 One Year 24707 Series C $ 10,787,388 $ 2,344,659 S - is --) 8 2,344,659 S 2008 Series A 50,000,0013 2,395,000 -- (2,395,000) -- 2010 Series A 26,493,750 2,842,500 -- (1,387.500) 1,455,000 2010 Series B 18,506,250 15,123,750 - (933,750) 14,190.000 2013 Series A 58,549,892 6,587,504 -- (2,212,378) 4,375.126 2013 Series B 21,010,000 13,705,000 - (2,050,000) 11,655.040 2013 series C 18,470,000 13,710,000 — (1,730,000) 11,980,000 2013 P1 Series A 1,169,000 1,103,581 - (23,017) 1,080,564 2016 Series A 99,620,000 99,620,000 99,620,400 2016 Series B 13,497,500 12,397,500 (1.140,000) 1 1.257,500 2016 Series C 44,835,000 44,835,000 - (3,545,000) 41,290,400 2016 Series D 28,860,000 28,860,000 - -- 28,860,000 2016 Series C 19,061,250 19,061,250 -- - 19,061.250 2016 Series F 10,040,000 6,735,00{7 (3.345,000) 3,390,000 2017 Series A 900,000,400 90,000000 — (2,685,000) 87,315,000 2017 Series B 2,540,000 2,544,000 -- (2.540,1140) - 2017 Series C 2.083,779 2,083.779 -- (1,017,432) 1066,347 2017 Series D 43.475.000 43,475.000 - - 43,475,000 _ 558,958,809 407,419.523 - (25,004,077) 382,41 SAO Add unamortized premium 88.430.599 64,323,565 - 16,299,4841 _511,024,081 $54 .389.408 5471.243.988 - 631303. $44.0.439.527 -75- 1,455,400 978,750 2.323,814 2,145,000 1.805,000 23,650 1,187.500 3,725,000 2.280,000 3.390,000 2,820.000 1.066.347 5.298,322 $78.498.383 COUNTY OF HAWAII Notes to the Basic Financial Statements June 30, 2019 General obligation bonds payable reported in the governmental activities section on the government -wide statement of net position at June 30, 2019 are comprised of the following individual issues: Public improvement (PI) and/or refunding bonds: 2007 Series C at 4.0% to 5.0%, due through 2021 $ 2,344,659 2010 Series A at 4.0% to 5.0%, due through 2020 1,455,400 2010 Series B at 3.335% to 6.l%, due through 2030 14,190,000 2013 Series A at 2.0% to 5.0%, due through 2020 4,375,126 2013 Series B at 3.0% to 5.0%, due through 2023 11,655,000 2013 Series C at 4.0% to 5.0%, due through 2024 11,980,000 2013 PI Series A at 2.75%, due through 2048 1,080,564 2016 Series A at 3.0% to 5.0%, due through 2035 99,620,000 2016 Refunding Series B at 3.0% to 5.0%, due through 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 through 2028 28,860,000 2016 Refunding Series E at 2.0% to 5.0%, due through 2029 19,061,250 2016 Taxable Series F at 1.2% to 1.55%, due through 2019 3,390,000 2017 Series A at 5.0%, due through 2037 87,315,000 2017 Refunding Series C at 4.0% to 5.0%, due through 2019 1,065,347 2017 Refunding Series D at 3.0% to 5.0%, due through 2032 43,475,000 Total general obligation bonds payable $3-$2,41.x.,446 Annual debt service requirements to maturity for the above general obligation bonds are as follows: Fiscal year ending .lune 30 2020 2021 2022 2023 2024 2025 —2029 2030 —2034 2035 —2039 2040 —2044 2045-2049 Governmental Activities Principal $ 23,200,061 24,992,709 26,406,084 26,457,516 27,753,775 127,101,502 83,075,1 17 42,967,673 214,937 246,072 Interest $ 17,468,593 16,351,526 15,1 1 l ,597 13,836,161 12,539,036 43,797,305 18,963,368 3,381,770 48,933 17,279 Tota l $312.415.,446 $141,51%50- -76- %50- -76- COUNTY OF HAWAII Nates 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 old 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 of bonds outstanding were considered defeased. Bond premiums At June 30, 2019, total unamortized bond premiums were $58,424,081, which are being amortized over the remaining life of the respective bond issues. Bonds Authorized and Unissued The County Council has authorized the issuance of $574.1 million in general obligation bonds to finance both specified and unspecified capital improvement projects. At June 30, 2019, $198.4 million was not yet issued. General Obligation Bond Anticipation Nates The following is a summary of general obligation bond anticipation note transactions reported in the government -wide statement of net position for the County for the fiscal year ended June 30, 2019: State Revolving Fund Loans The County has obtained loans to assist in financing mandated wastewater projects from the State Water Pollution Control Revolving Fund (SRF), The purpose of this revolving fund is to provide low-interest, long-term loans and other financial assistance to the four counties in the state to finance construction of wastewater projects. The County has eleven projects approved for funding with these loans. -77- Issue Balance Balance Note No. Amount July I, 2018 Issues Retirements June 30 2019 Series E, Note R-1 $ 6.060,000 $ - $ 6,000,600 $ - $ 6,000,000 Series E. Notc R-2 6,000,000 6,000,000 - 6.000,000 Series E, Note R-3 6.000,000 6,000,000 - 6,004,000 Series E. Note R4 6,000,000 6.0[70,000 - 6,400.000 Series E. Note R-5 4,000,000 4,040,000 - 4,006,000 Series E. Note R-6 500,000 -- 500,000 500,000 Series E, Note R-7 500,000 540,000 500,000 Series E. dote R -S 500,004 500.000 - 500,000 Series E, Nate R-9 500.0(10 - 500,040 -- 500.900 $30,004,060 $ �� $.30.044.040 $ - 530.040,000 State Revolving Fund Loans The County has obtained loans to assist in financing mandated wastewater projects from the State Water Pollution Control Revolving Fund (SRF), The purpose of this revolving fund is to provide low-interest, long-term loans and other financial assistance to the four counties in the state to finance construction of wastewater projects. The County has eleven projects approved for funding with these loans. -77- COUNTY OF HAWAII Dotes to the Basic Financial Statements June 30, 2019 The County's State Revolving Fund Loans are direct borrowings of the County for which its full faith and credit are pledged. The State Revolving Fund Loafs are secured by the gross revenues of the County. The schedule below shows the County's SRF transactions for the fiscal year ended .lune 30, 2019: Loans Approved Loan Balance Retirements! Loan Balance Due Within Authorized Amount July 1. 2019 Additions Forgiveess June 30. 2Q] One Yenr Cesspool 2,807,0I4 248,622 2024 2.,820,840 226,696 Conversion $ 8,363,773 S 3,801,856 $ $ (438,981) S 3,362,875 S 441,145 Honoka'a LCC 4,513,158 2,509,993 - (180,182) 2.,329,811 181,085 Queen $39,693,594 $2.578.363 Lili`u❑kalani 9,421,732 6,022,288 (488,265) 5,534,023 490,712 Kalaniana`ole 7,847,045 5,496,764 - (354,255) 5,142,509 355,560 Kealakehe WWTPAU 21,162,934 14,994,362 (865,587) 14,128,775 866.599 North Kona 3,454,500 1,655,604 - (39,502) 1,616,102 79,449 Kealakehe Effluent Reuse 6,158,687 718,911 2,141,373 (1,026,800) 1,833,484 85.354 5H Landfill Closure 678,370 448,092 -- -• 448,092 -- Kealakehe Scrap Metal 5,981,910 $67.582.199 5.297.923 535.647.870 A7439 - $f 3.343.5721 5297.223 $39 - 1-2-422.20A The remaining loans bear interest at 0.25% to 0.50% exclusive of a 0.25% to 0.75% loan fee, and require payments through fiscal year 2040. Debt service to maturity for disbursements to date on these projects are as follows: Governmental Activities Fiscal year ending June 30: Principal Interest 2020 $ 2,499,904 $ 310,707 2021 2,779,577 292,172 2022 2,793,212 270,495 2023 2,807,0I4 248,622 2024 2.,820,840 226,696 2025 —2029 13,166,146 833,667 2030 —2034 9,377,695 324,258 2035 —2039 3,287,484 70,937 2040 151,722 809 Total $39,693,594 $2.578.363 WE:M [816 1ARM"93 7.11"��I Notes to the Basic Financial Statements .tune 30, 2019 Other General Long -Term Obligations The following is a summary of other general long-term obligations transactions for the fiscal year ended June 30, 2019: Governmental activities: Compensated absences Claims and judgments (see Note 12) Capital leases (see Note 8) Landfill costs payable (see Note 9) Pollution remediation (see Note 9) Other post employment benefit obligation (see Note 13) Total Balance Balance Due Within July 1, 2018 Additions* Payments June 30, 2019 One Year $41,136,979 $15,862,555 $(14,586,821) $42,412,713 $10,626,781 18,135,409 17,188,988 8,112,577 6,776,636 (3,839,914) 31,484,483 (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) 12,440,733 4,495,902 3,359,810 359,009 3,949,238 391,454300 9,380,510 400,834,810 -- 501.990.524 $52.3.13,645 $2"7Q9,$} SMJQ $22,790,740 * Net of new claims liability and existing claims resolved at less than previous esti mate. Historically, the County's general fund has been used to liquidate the majority of other long- term liabilities, including the other post employment benefit obligation and the compensated absences since most employees are paid by the general fund. Fund Balances - Debt Service Funds The Fund balance in the debt service funds at lune 30, 2019 includes $29,563,381, which is reserved for principal payments on general obligation bonds and $3,647,978, which is reserved for the payment of interest on the bonds. Enterprise Fund lutes, Bond and Loan Payable On February 12, 2013, the County issued general obligation bonds on behalf of Kula`imano Elderly Housing Project (Project) to pay off its two notes payable to the U.S, Department of Agriculture, Farmers Home Administration with principal and interest balances aggregating $835,108. The Project is responsible for the debt service payment related to their portion of the bonds, which is also secured with the County's general obligation pledge. Because the Project is responsible for only a portion of the total bonds issued, it was decided that the Project would continue to make bond payments equivalent to its previous monthly installment -79- COUNTY OF HAWAII Notes to the Basic Financial Statements June 30, 2419 payments of $7,826 on the old notes at 5.547% interest. Lander this payment schedule, the Project will make contributions through 2025 of the bonds 2032 maturity date. The following is a summary of the Project's bond payable transactions for the fiscal year ended June 30, 2019: Balance at July 1, 2018 $ 592,496 Deductions (62,622) Balance at June 30, 2019 529,874 Less current portion (66,186 Note payable, net of 2021 current portion $ 463,M The following is a summary of the annual maturities for the enterprise fund bond payable: On October 29, 2012, the County assumed the loan of its lessee Ouli Ekahi Partnership with the Hawaii Housing Finance and Development Corporation in the amount of $478,430. The loan is non-interest bearing and matures on February 27, 2041. In exchange, the County assumed ownership of the Ouli Ekahi project which consists of a 33 single family affordable rental housing project. The following is a summary of enterprise fund loan payable transactions for the fiscal year ended June 34, 2019: Balance at July 1, 2018 Business -type Activities Fiscal year ending June 30: Principal Interest 2020 $ 66,186 $ 25,869 2021 69,952 21,997 2022 73,932 17,905 2023 78,139 13,580 2024 82,586 9,009 2025-2026 159,079 4,466 Total $529,$74 $ 92}826 On October 29, 2012, the County assumed the loan of its lessee Ouli Ekahi Partnership with the Hawaii Housing Finance and Development Corporation in the amount of $478,430. The loan is non-interest bearing and matures on February 27, 2041. In exchange, the County assumed ownership of the Ouli Ekahi project which consists of a 33 single family affordable rental housing project. The following is a summary of enterprise fund loan payable transactions for the fiscal year ended June 34, 2019: Balance at July 1, 2018 $214,509 Deductions4( 6.606 Balance at .lune 30, 2019 167,903 Less current portion (36,334) Loan payable, net of current portion 131,5�Q *6181211"81affiCRIUM .111 Notes to the Basic Financial Statements .lune 30, 2019 The following is a summary of the annual maturities for the enterprise fund loan payable: Fiscal year ending June 30 2020 2421 2022 2023 2024 2025 —2028 Total Special Assessment Bonds Business -type Activities Principal $ 36,334 16,500 16,500 16,500 16,500 65,569 $167,903 The County has issued general obligation bonds on behalf of Improvement District No. 18 for water improvements (see Note 4). These bonds were then refunded by a portion of the 2013 Series A Bonds that were issued. The Improvement District 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 improvement 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 on behalf of Improvement District No. 19 for water improvements (see Note 4). The Improvement District 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 improvement district's share of the refunded bonds matures annually through 2048 and bear interest at the previous rates of 2.75%. Total general obligation bonds payable included in the government -wide statement of net position were $1,080,564 at .tune 30, 2019. The bonds are secured by a first lien on the land benefited by the improvements, and are to be repaid from the annual assessments levied against the owners of the land. The County acts as an agent for the property owners within the improvement districts to collect assessments receivable, forward payments to bond -paying agents at appropriate dates and, if required, administer foreclosure proceedings. The following is a summary of bond transactions for Improvement District No. 18, Coastview/Wonderview Water Improvements, and No. 19, Kona Ocean View Properties Subdivision for the fiscal year ended June 30, 2019: Balance at July 1, 2018 $2,098,246 Deductions (103,379) Balance at June 30, 2019 $l 994J67 -81- COUNTY OF HAWAII Notes to the Basic Financial Statements June 30, 2419 The following is a summary of the annual maturities for the improvement district general obligation bonds: Fiscal year ending June 30: Principal Interest 2020 $ 107,752 $ 70,001 2021 112,317 65,336 2022 117,483 64,466 2023 122,057 55,382 2024 127,251 50,074 2025 -2029 595,857 165,142 2030 -2034 163,868 100,704 2035 -2039 187,673 76,571 2040 -2044 214,937 48,932 2045 -2049 246.072 17.281 Total $1,994,867 $ 709.,889 11. COMMITMENTS AND CONTINGENCIES Contractual commitnrents- Contractual commitments for capital projects, expenses, and supplies at June 30, 2019, 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 9,262,355 Contractual commitments for the enterprise funds were immaterial. Intergovernmental revenues - The County has received federal and state grants for specific purposes that are subject to review and audit by grantor agencies. Such audits could lead to requests for reimbursement to the grantor agency for expenditures disallowed under terms of the grants. In the opinion of management of the County, disallowed costs, if any, would not be material. Claims - Numerous claims and lawsuits have been filed against the County in the normal course of its operations. A liability for probable losses is included on the government -wide statement of net position (see Note 12). Although the outcome of the various claiins 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 the County. -82- Notes to the Basic Financial Statements .lune 30, 2019 ADA compliance— 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 2040. The self-evaluation and transition plan for programs, practices and procedures has been completed and approved by the County Council. The cost impact of implementation is not material because the necessary modifications are primarily procedural, The second part of this stipulated agreement is the reevaluation of all County facilities, which was completed and accepted by the County Council on June 30, 2000. Approximately 240 County facilities were surveyed as part of this effort. The tentative completion 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 came 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 fonn of both a time extension and reprioritization of sites. As a result, the County obtained approval of a modified 4 -year plan wherein accessibility improvements at the then remaining 35 park sites were required to be completed by December 3 I, 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 calendar year 2021. The balance of the unimproved sites would be deferred indefinitely pending separate improvementJenhancement 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 modified 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, 1 has been permanently omitted due to lava inundation, and 16 are in design and permitting. The County has encumbered or spent more than $17.6M on these projects. The County had spent $42.0 million for the construction and design fees to complete 50 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 $50,000 to handle requests for reasonable accommodations for County departments; and the procedures for these requests have been finalized and are available on the Human Resources Department's Equal Opportunity and the ADA web page. Also, Parks has a Recreation Specialist who reviews and investigates requests for reasonable accommodations, and recommends specific actions on those requests. -83- COUNTY OF HAWAII Notes to the Basic Financial Statements June 30, 2019 12. RISK MANAGEMENT The County is exposed to various risks of losses related to torts; theft, damage, and destruction of assets; errors and omissions; work-related injuries to employees; 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 on selected structures, medical malpractice for emergency medical services, aviation liability for helicopter operations, retired senior volunteers liability coverage, auto liability for mass transit muses 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 projects. There was no reduction in insurance coverage during the year from 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' compensation. As such, emphasis is placed on claims management and safety/risk control to protect the public and employees and to mitigate loss costs. The liability for claims and judgments is reported on the government -wide statement of net position and the majority will be liquidated from the County's general fund. Liabilities are reported when it is probable that a loss has occurred and the amount of that loss can be reasonably estimated. These losses include an estimate of claims that have been incurred but not reported (IBNR). Claim liabilities, including IBNR, are based on the estimated ultimate cost of settling the claims, and include incremental costs for the hiring of special counsel and expert witnesses. Claims liabilities are estimated by a case-by-case review of all claims and the application of historical experience to outstanding claims. Estimates of IBNR are based on historical experience. The liability for claims and judgments is reported on the government -wide statement of net position. At June 30, 2019, the amount of this liability was $31,484,483. This is the County's best estimate based on available information. Changes in the reported liability since July 1, 2017 are given below. General Liabili Balance at July 1, 2017 $ 2,294,202 Incurred claims (including IBNR)* (177,104) Claim payments (219,379) Balance at June 30, 2018 $ 1,$92_�L3 Incurred claims (including IBNR)* 14,128,499 Claim payments (199,932) Balance at .Tune 30, 2019 $ 15,826,290 Workers' Total Compensation Liability $ 12 141, }91 7,727,357 7,554,257 (3,631,1621 (3,850,541 } $ 16,237,6$6 �135T4Q9 3,060,489 17,188,988 (3,639,982) (3,839,9 i 4) $ 15=658,193 $ 31,484,483 *Net of new claims liability and existing claims resolved at less than previous estimate. -84- COUNTY OF HAWAII Notes to the Basic Financial Statements .lune 30, 2419 13. EMPLOYEE BENEFIT PLANS Pensions — Employees' Retirement System of the State of Hawaii Pension Plan Description -All eligible employees of the State and counties are provided with pensions through a cost-sharing multiple -employer defined benefit pension plan administered by the Employees' Retirement System of the State of Hawaii (ERS). Benefit terns, eligibility, and contribution requirements are established by HRS Chapter 88 and can be amended through legislation. The ERS issues a publicly available financial report that can be obtained at ERS's website: http://ers.ehawaii,gov/. Benefits Provided - The ERS provides retirement, disability, and death benefits that are covered by the provisions of the noncontributory, contributory, and hybrid retirement plans. The three plans provide a monthly retirement allowance equal to the benefit multiplier (generally 1.25% or 2%) multiplied by the average final compensation multiplied by years of credited seryice. The benefit multiplier decreased by 0.25% for new hybrid and contributory plan members hired after June 30, 2012. Average final compensation is based on the five highest paid years of service excluding the payment of salary in lieu of vacation for members hired after June 30, 2012. For those hired between January 1, 1971 and June 30, 2012, AFC is based on the three highest paid years of service excluding the payment of salary in lieu of vacation. If the employee was hired prior to January 1, 1971, the AFC is the average salary earned during the five highest paid years of service, including the payment of salary in lieu of vacation, or three highest paid years of service, excluding the payment of salary in lieu of vacation. For members hired before July 1, 2012, the 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 tate 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 members 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. Noncontributory Plan Retirement Benefits - General employees' retirement benefits are determined as 1.25% of average final compensation multiplied by the years of credited service. Employees with 10 years of credited seryice are eligible to retire at age 62. Employees with 30 years of credited service are eligible to retire at age 55. 85 COUNTY OF HAWA141 Notes to the Basic Financial Statements June 30, 2019 Disability Benefits - 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. Ten years of credited service is required for ordinary disability. Ordinary disability benefits are determined in the same manner as retirement benefits but are payable immediately, without an actuarial reduction, and at a minimum of 12.5% of average final compensation. Death Benefits - For service -connected deaths, the surviving spouse/reciprocal beneficiary receives a monthly benefit of 30% of the average final compensation until remarriage or re-entry into a new reciprocal beneficiary relationship. Additional benefits are payable to surviving dependent children up to age 18. If there is no spouse/reciprocal beneficiary or dependent children, no benefit is payable. Ten years of credited service is required for ordinary death benefits. For ordinary death benefits, the surviving spouse/reciprocal beneficiary (until remarriage/reentry into a new reciprocal beneficiary relationship) and dependent children (up to age 18) receive a benefit equal to a percentage of member's accrued maximum allowance unreduced for age or, if the member was eligible for retirement at the time of death, the surviving spouselreciprocal beneficiary receives 100% joint and suryivor lifetime pension. ContributoLy Plan for Employees Hired Prior to July l 2012 Retirement Benefits - General employees' retirement benefits are determined as 2% of average final compensation multiplied by the years of credited service. General employees with 5 years of credited service are eligible to retire at age 55. Police and firefighters' retirement benefits are determined as 2.5% of average final compensation for each year of service up to a maximum of 80%. Police and firelighters with 10 years of credited service are eligible to retire at age 55. Disability Benefits - Members are eligible for seryice-related disability benefits regardless of length of service and receive a lifetime pension of 50% of their average final compensation. Ten years of credited service is required for ordinary disability. Ordinary disability benefits are determined as 1.75% of average final compensation multiplied by the years of credit seryices and are payable immediately, without an actuarial reduction, and at a minimum of 30% of average final compensation. Death Benefits - For service -connected deaths, the surviving spouse/reciprocal beneficiary receives a lump sum payment of the member's contributions and accrued interest plus a monthly benefit of 50% of the 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 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 June 30, 2019 Ordinary death benefits are available to employees who were active at time of death with at least 1 year of service. Ordinary death benefits consist of a lump sum payment of the member's contributions and accrued interest plus a percentage of the salary earned in the 12 months preceding death, or 50% Joint and Survivor lifetime 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 lifetime pension if the member was eligible for retirement at the time of death and designated one beneficiary. Contributory Plan for Employees Hired After June 30, 2012 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 are eligible to retire at age 60, Disability and Death Benefits - Members 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 are 1.75% of average final compensation for each year of service for police and firefighters and are payable immediately, without an actuarial reduction, at a minimum of 30% of average final compensation. Death benefits for contributory plan members hired after June 30, 2012 are generally the same as those for contributory plan members hired June 30, 2012 and prior. H brid Plan for Employees Hired Prior to July l 2012 Retirement Benefits - General employees' retirement benefits are determined as 2% of average final compensation multiplied by the years of credited 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 Benefits - 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 in the same manner as retirement benefits but are payable immediately, without an actuarial reduction, and at a minimum of 25% of average final compensation. -87- COUNTY OF HAWAII Notes to the Basic Financial Statements June 30, 2019 Death Benefits - For service -connected deaths, the surviving spouse/reciprocal beneficiary receives a lump sum payment of the member's contributions and accrued interest plus a monthly benefit of 50% of the 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 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. 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 lump sum payment of the member'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 time of death but was credited with at least 10 years of service and designated one beneficiary, or 100% Joint and Survivor lifetime pension if the member was eligible for retirement at the time of death and designated one beneficiary. Hybrid Plan for Employees Hired After June 30, 2012 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 65. Employees with 30 years of credited seryice 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 benefits generally remain the 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 service. Ordinary death benefits consist of a lump sum payment of the member's contributions and accrued interest multiplied by 120%, or 50% Joint and Survivor lifetime pension if the member was not eligible for retirement at the time of death and designated one beneficiary, or 100% Joint and Survivor Iifetime pension if the member was eligible for retirement at the time of death and designated one beneficiary. Contributions - Contributions are established by HRS Chapter 88 and may be amended through legislation. The employer rate is set by statute based on the recommendations of the ERS actuary resulting from an experience study conducted every five years. Since July 1, 2005, the employer contribution rate is a fixed percentage of compensation, including the normal cost plus amounts required to pay for the unfunded actuarial accrued liabilities. The contribution rates for fiscal year 2019 were 31.00% for police and firefighters and 19.0% for all other employees. Contributions to the pension plan from the County for the year ended June 30, 2019, 2018, and 2017 were $44,853,953, $41,562,933, and $36,157,981, respectively. W:f:M COUNTY OF HAWAII Notes to the Basic Financial Statements June 30, 2019 The employer is required to make all contributions for members in the noncontributory plan. For contributory plan employees hired prior to July 1, 2412, general employees are required to contribute 7.8% of their 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, 2012 are required to contribute 6.0% of their salary. Hybrid plan members hired after June 30, 2012 are required to contribute 8.0% of their salary. Pension liabilities, pension expense, and deferred ourflows of resources and deferred inflows of resources related to pensions— At June 30, 2019, the County reported a liability of $635,693,501 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 County's proportion of the net pension liability was based on the actual employer contributions to the pension plan relative to the contributions of all participating employers. At June 30, 2018, the County's proportion was 4.77%, which was an increase of .06% from its proportion measured as of June 30, 2017. For the year ended June 30, 2019, the County recognized pension expense of $93,523,335. At June 30, 2019, the County reported deferred outflows of resources and deferred inflows of resources related to pensions from 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 the measurement date Total Deferred Deferred Outflows Inflows of of Resources Resources $ 23,304,996 $ 2,516,117 -- 3,832,259 73,900,841 -- 19,019,804 3,852,069 44 853,953 -- $161,074,594 $ l 0,2-QQA45 $44,853,953 reported as deferred outflows of resources related to the County's contributions to the pension plan subsequent to the measurement date will be recognized as a reduction of the net pension liability in the fiscal year ended June 30, 2020. 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: $ 1_06}025,196 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 growth rate 3.50% per annum Salary increases 3.50% - 7.00%, including inflation Investment rate of return 7.00% per annum, including inflation Cost of living adjustments 2.50% /1.50% Mortality rates used in the actuarial valuation as of June 30, 2018 were based on the following: Active members — Multiples of the RP 2014 mortality table for active employees based on the occupation of the member. Healthy retirees — The 2016 Public Retirees of Hawaii mortality table, generational projection using the BB projection table from the year 2016 and with multipliers based on plan and group experience. Disabled retirees -- Base Table for healthy retiree's occupation, set forward 5 years, generational projection using the BB projection table from the year 2016. Minimum mortality rate of 3.5% for males and 2.5% for females. 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 resulting from the 2015 actuarial experience study were (1) a decrease in the investment return assumption from 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 Outflows (Inflows) of Fiscal Year Ending June 30, Resources 2020 $ 46,567,986 2021 39,388,678 2022 16,439,932 2023 2,659,286 2024 969314 $ 1_06}025,196 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 growth rate 3.50% per annum Salary increases 3.50% - 7.00%, including inflation Investment rate of return 7.00% per annum, including inflation Cost of living adjustments 2.50% /1.50% Mortality rates used in the actuarial valuation as of June 30, 2018 were based on the following: Active members — Multiples of the RP 2014 mortality table for active employees based on the occupation of the member. Healthy retirees — The 2016 Public Retirees of Hawaii mortality table, generational projection using the BB projection table from the year 2016 and with multipliers based on plan and group experience. Disabled retirees -- Base Table for healthy retiree's occupation, set forward 5 years, generational projection using the BB projection table from the year 2016. Minimum mortality rate of 3.5% for males and 2.5% for females. 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 resulting from the 2015 actuarial experience study were (1) a decrease in the investment return assumption from 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 HAWAII Notes to the Basic Financial Statements June 30, 2019 The long-term expected rate of return on pension 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 pian 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 of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of geometric rates of return for each major asset class are summarized in the following table: Strategic Allocation (Risk -Based Classes) Target Allocation Long -Term Expected Rate of Return* Long -Term Expected Real Rate of Return Broad growth 63.00% 7.10% 4.85% Crisis risk offset 20.00% 4.60% 2.35% Real return 10.00% 4.10% 1.85% Principal protection 7.00% 2.50% 0.25% 100.00% *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 rate used at the prior measurement date. The projection of cash 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 required rates, actuarially determined. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected 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 projected benefit payments to determine the total pension liability. Sensitivity of the County's proportionate share of the net pension liability to changes in the discount rate— The following presents the County's proportionate share of the net pension liability calculated using the discount rate of 7.00%, as wetI 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 -paint lower (6.00°/x) or i -percentage -point higher (8.00%) than the current rate: I% Decrease Current Discount 10/6 increase (5.00%) Rate (7.00%) (8.00%) County's proportionate share of the net pension liability $ 83V48,4_53 $ 635,693,501 $. 467,81 I,298 WE COUNTY OF HAWAII Notes to the Basic Financial Statements June 30, 2019 Pension plan fiduciary 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. Payables to the pension plan — At June 30, 2019, the annual amount payable to the ERS totaled $4,683,177, which represents the employer contribution for the second half of the month of June 2019, as required by HRS, and the excess pension cost under Act 153/S LH 2- 12 REFER HRS Section 88-100 for fiscal year ended .lune 30, 2019. Other Pension Plans - County of Hawaii Bandsmen Pension System The County also sponsors a nonquaiifed, governmental single employer defined benefit pension plan for members of the County Band (County of Hawaii Bandsmen Pension System) who are or were ineligible for benefits under ERS and whose employment began 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 minimum 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 expense, and deferred outflows of resources and deferred inflows of resources related to pensions — At June 30, 2019, the County reported a liability of $951,741. The total pension liability was measured as of lune 30, 2019 based on an actuarial valuation as of June 30, 2019. For the year ended June 30, 2019, the County recognized pension payments of $47,532 and a negative pension expense of $88,699. Actuarial assumptions — The total pension liability in the June 30, 2019 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 2.50% Payroll growth rate 3.50% per annum Salary increases 3.50%, including inflation Cost of living adjustments 2.50% -92- COUNTY OF HAWAII Notes to the Basic Financial Statements June 30, 2019 The discount rate used to measure the County's total pension liability was 3.13% based on the daily rnunicipal 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 1 -percentage -point lower (2.13%) or I -percentage - poi nt 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 $7, 41 $ _951,741 S $40,4b$ Schedule of Changes in Total Pension Liability Measurement year ending June 30, 2019 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 (47,532] Net Change in Total Pension Liability (136,231) Total Pension Liability — Beginning 1,087,972 Total Pension Liability — Ending $ 951,741 Post -Retirement 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 Trust 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 ern ployees, their dependents and their beneficiaries. Benefits Provided — Chapter 87A of the HRS 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, supplemental medical and prescription drug, and group life insurance benefits for retirees and their dependents. SE COUNTY OF HAWAII Notes to the Basic Financial Statements June 30, 2019 The following table provides a summary of the number of employees covered by the benefit terms as of July 1, 2018. Inactive employees or beneficiaries currently receiving benefits 1,641 Inactive employees entitled but not yet receiving benefit payments 217 Active employees 2388 41246 Contributions - The County's contributions levels are established by Chapter 87A of the HRS. The county was required to contribute 100% of the ARC starting in fiscal year 2019. The ARC represents a level of funding that is sufficient to cover, 1) the normal cost, which is the cost of the other postemployment benefits attributable to the current year of service; and 2) an amortization payment, which is a catch-up payment for past service costs to fund the unfunded actuarial accrued Iiability 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 an average contribution rate of approximately 22. l% of covered -employee payroll. For employees hired prior to July 1, 1996, the County pays the entire monthly healthcare premium for employees retiring with 10 or more years of credited service, and 50% of the monthly premium for employees retiring with fewer than 10 years of credited service. The current (pay-as-you-go) premium costs are paid by the respective funds but the net other postemployment benefit obligation is paid by the General Fund. For employees liired after June 30, 1996, and who retire with fewer than 10 years of service, the County makes no contributions. For those retiring with at least 10 years but fewer than 15 years of service, the County pays 50% of the retired employees' monthly Medicare or non - Medicare premium. For employees hired after June 30, 1996, and who retire with at least 15 years but fewer than 25 years of service, the 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 premium. For employees hired after June 30, 2001, and who retire with fewer than 10 years of service, the County makes no contributions. For those retiring with at least 10 years but fewer than 15 years of service, the County pays 50% of the retired employees' monthly Medicare or non - Medicare premium 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' monthly Medicare or non -Medicare premium; for those retiring with over 25 years of service, the County pays the entire healthcare premium. 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 HRS. -94- COUNTY OF HAWAII Notes to the Basic Financia! Statements June 30, 2419 Net OPEB liability — The County's net OPEB liability was measured as of July 1, 2018, and the total OPEB liability used to calculate the net OPEB 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, June 30, 2019, that are expected to have a significant effect on the net OPEB liability. Actuarial assumptions — The total OPEB liability in the July 1, 2018 actuarial valuation was determined using the Following actuarial assumptions, applied to all periods ilie Iuded in the measurement, unless otherwise specified: Inflation 2.50% Salary increases 3.50% - 7.00%, including inflation Investment rate of return 7.00% Healthcare cost trend rates PPO Initial rates of 6.60°/x; 6.6% and 9.00°/x; declining to a rate of 4.86% after 14 years HMO Initial rate of 9.00%; declining to a rate of 4.85% after 14 years Part B & base monthly Initial rates of 2.00% and 5.00°/x; declining to a rate of contribution 4.70% after 14 years Dental 3.50% Vision 2.50% Life insurance 0.00% Mortality rates used in the actuarial valuation as of July 1, 2018 were based on the following: 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 member. Healthy retirees — The 2015 Public Retirees of Hawaii mortality table, generational projection using the BB projection table from the year 2016 and with multipliers based on plan and group experience. Disabled retirees — Base Table for healthy retirees' occupation, set forward 5 years, generational projection using the BB projection table from the year 2015. Minimum mortality rate of 3.5% for males and 2.5% for females. The actuarial assumptions used in the July 1, 2018 valuation were based on the results of an actuarial experience study for the five-year period ending June 30, 2015. _95- ��ltll � Y Yt•�ij�:.l►1F.7:1 fiJ Notes to the Basic Financial Statements June 30, 2019 The long-term expected rate of return on OPEB 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 major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The 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 OP EB liability was 7.00%. The projection of cash flows used to determine the discount rate assumed that the County will fund the recommended actuarially determined contribution, which is based on layered, closed amortization periods. Based on those assumptions, the OPER plan's fiduciary net position is projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on OPER plan investments was applied to all periods of projected benefit payments to determine the total OPER liability. .= Long -Term Strategic Allocation Target Expected Real (Risk -Based Classes) Allocation Rate of Return International Equity 17.00% 6.50% U.S. Equity 15.00% 5.05% Private Equity 10.00% 8.65% Core Real Estate 10.00% 4.10% Trend Following 9.00% 3.00% U.S. Microcap 7.00% 7.00% Global Options 7.00% 4.50% Private Credit 6.00% 5.25% Long Treasuries 6.00% 1.90% Alternative Risk Premium 5.00% 2.45% TIPS 5.00% 0.75% Core Bonds 3.00% 1.30% REITS 0.00% 0.00% 100.00% Discount rate —The discount rate used to measure the total OP EB liability was 7.00%. The projection of cash flows used to determine the discount rate assumed that the County will fund the recommended actuarially determined contribution, which is based on layered, closed amortization periods. Based on those assumptions, the OPER plan's fiduciary net position is projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on OPER plan investments was applied to all periods of projected benefit payments to determine the total OPER liability. .= COUNTY OF HAWAVI Notes to the Basic Financial Statements June 30, 2019 Changes in the Net OPER Liability: The following schedule presents the changes in the net OPEB liability for the fiscal year ending June 30, 2019: Sensitivity of the net OPER liability to changes in the discount rate — The follow i ng 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 higher (8.00%) than the current discount rate: I% Decrease Current Discount 1% Increase (6.00%) Rate (7.00%) (8.00%) County's net OPEB liability $ M4Q2$6 $ 40,$34,810 $ 329,311321 Sensitivity of the net OPER liability to changes in the healthcare cost trend rates — The 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 healthcare cost trend rate that is (- percentage -point lower (6.00°/x) or i -percentage-point higher (8.00%) than the current discount rate: Current Healthcare Cost I% Decrease Trend Rate I% Increase County's net OPEB liability $ 325,648,W $ 400,834,810 $ 498}6$,74.6 -97- Increase (Decrease) Total OPEB Plan Fiduciary Net OPEB Liability Net Position Liability (a) (b) (a) -(b) Balance at June 30, 2018 $ 517,774,914 $ 126,320,614 $ 391,454,300 Changes for the fiscal year: Service cost 12,056,311 -- 12,056,311 Interest on the total OPEB liability 36,036,284 -- 36,036,284 Employer contributions -- 32,829,013 (32,829,013) Net investment income -- 9,474,156 (9,474,156) Benefit payments (17,998,013) (17,998,013) -- Administrative expense -- (29,227) 29,227 Difference between expected and actual experience (3,679,099) -- (3,679,099) Changes of assumptions 7,240,956 -- 7,240,956 Net changes 33,656,439 $ 24,275,929 $ 9,380,510 Balance at June 30, 2019 $ 551,431,353 353 $ 150,596,543 $A 34,810 Sensitivity of the net OPER liability to changes in the discount rate — The follow i ng 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 higher (8.00%) than the current discount rate: I% Decrease Current Discount 1% Increase (6.00%) Rate (7.00%) (8.00%) County's net OPEB liability $ M4Q2$6 $ 40,$34,810 $ 329,311321 Sensitivity of the net OPER liability to changes in the healthcare cost trend rates — The 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 healthcare cost trend rate that is (- percentage -point lower (6.00°/x) or i -percentage-point higher (8.00%) than the current discount rate: Current Healthcare Cost I% Decrease Trend Rate I% Increase County's net OPEB liability $ 325,648,W $ 400,834,810 $ 498}6$,74.6 -97- COUNTY OF HAWAII Notes to the Basic Financial Statements .lune 30, 2019 For the year ended June 30, 2019, the County recognized OPEB expense of $38,719,073. At June 30, 2019, the County reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Net difference between expected and actual experience Changes of assumptions Net difference between projected and actual earnings on OPER plan investments Deferred Deferred Outflows Inflows of of Resources Resources $ -- $ 3,146,491 6,192,712 -- -- 1,696,370 County contributions subsequent to the measurement date 39.770.000 -- Total 145-.96.2,712 S .4,84.2}$61 $39,770,000 reported as deferred outflows of resources related to the County's contributions to the OPEB plan subsequent to the measurement date will be recognized as a reduction of the net OPEB liability in the fiscal year ended June 30, 2020. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: 0,349MI) The EUTF issues a publicly available financial report that includes financial statements and required supplementary information, which is available on-line at their web -site www.eutf.hawaii,gov or by contacting them at P.O. Box 2 12 1, Honolulu, HI 968 05 -212 1. Deferred Compensation Plan County employees are permitted to participate in a deferred compensation plan of the State of Hawaii, adopted pursuant to Internal Revenue Code (1 RC) section 457. Tile plan permits eligible employees to defer a portion of their salary until future years by contributing to a fund man Net deferred (outflows) inflows Fiscal Year Ending June 30, of resources 2020 $ 42,244 2021 42,244 2022 42,243 2023 (492,905) 2024 (515,636) Thereafter (468,041) 0,349MI) The EUTF issues a publicly available financial report that includes financial statements and required supplementary information, which is available on-line at their web -site www.eutf.hawaii,gov or by contacting them at P.O. Box 2 12 1, Honolulu, HI 968 05 -212 1. Deferred Compensation Plan County employees are permitted to participate in a deferred compensation plan of the State of Hawaii, adopted pursuant to Internal Revenue Code (1 RC) section 457. Tile plan permits eligible employees to defer a portion of their salary until future years by contributing to a fund man 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 emergency. 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 compensation plan assets are not reported in the accompanying basic financial statements. 14. COMPONENT UNIT DISCLOSURES Deposits and Investments At June 30, 2019, the carrying amount of cash, time certificates of deposit and money market funds of $51,004,073, with bank balances of $52,005,259 were held 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 amounted to $$88,225 at .lune 30, 2019. At June 30, 2019, the Department had $30,000,000 in investments. Capital Assets The Department began operations as of January 1, 1950. At that date, the utility plant in service was transferred to the Department from the County at the cost of the utility plant assets acquired by the County for its water system from January 1, 1924 to December 31, 1949, less accumulated depreciation. Acquisitions prior to 1924 and acquisitions by gift or grant prior to 1950 are not included in utility plant. Additions to utility plant since January 1, 1950 are stated at original cost and include contributions by governmental agencies, private subdividers and customers at their cost or estimated cost. Construction costs include amounts for contract work, engineering supervision and other direct and indirect costs. Construction period interest is capitalized on utility plan constructed 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 systems 10 to 40 years 1011111MV&SI I +LCL ., 81 Notes to the Basic Financial Statements June 30, 2019 The capital assets of the Department at June 30, 2019 were as follows: Utility plant in service $508,026,103 Less: accumulated depreciation (262,121,1 18) 245,904,985 Preliminary survey and investigation charges 6,140,398 Construction work in progress 39,306,488 Land and rights 5,204,598 Net capital assets _$296,556,069 Long -Term Debt The County has issued general obligation bonds on behalf of the Department. The Department is responsible for the payment of the debt service on these bonds, but the County remains liable because they are general obligations of the County. The Department has recorded a liability for these general obligation bonds, which amounted to $24,769,159 at June 30, 2019. General obligation bonds payable issued on behalf of the Department and other long-tenn debt at June 30, 2019 are comprised of the following: Public improvement bonds: 2048 Series A at 4.125%, due through 2043 2010 Series A at 4.0% to 5.0%, due through 2420 2010 Series B at 3.33%to 6.1%, due through 2030 Total public improvement bonds Public improvement 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 premium Total - 1 oo - $ 123,915 485,000 4,730.000 5,338,915 1,250,341 11,257,500 6,353,750 568,653 4444 326.. 69,095,814 T 1,526,866 570,622;680 COUNTY OF HAWAII Notes to the Basic Financial Statements June 30, 2019 At June 30, 2019, future principal and interest payments for long-term debt are scheduled as follows: Fiscal year ending June 30: Principal Interest Total 2024 $ 5,613,168 $ 1,819,523 $ 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 2024 4,999,266 1,055,397 6,054,663 2025 —2029 23,230,779 2,991,555 26,222,334 2030 —2034 12,708,1 12 827,439 13,535,551 2035 —2039 6,053,548 156,326 6,209,874 2040-2044 29,717 3,121 32,838 Total $69,0953814 $11,1043071 M 199,885 Contributions in Aid of Construction The Department recognized $5,031,723 of contributions in aid of construction for the fiscal year ended June 30, 2019. Commitments and Contingent Liabilities Claims and judgments—The Department maintains property, auto liability, and general liability insurance policies. The Department remains self-insured for workers' compensation and other perils. The liability at June 30, 2019 for workers' compensation claims of $779,000 was estimated based on a combination of case-by-case review and the 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 Plan Pension liabilities, pension expense, and deferred outflows of resources and deferred inflows ows of resources related to pensions — At June 30, 2019, the 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 Department'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. -101 - COUNTY OF HAWAII Notes to the Basic Financial Statements June 30, 2019 At June 30, 2018, the Department's proportion was .25%, which increased by 0.03% from its proportion measured as of June 30, 2017. For the year ended June 30, 2018, the Department recognized pension expense of $5,162,420. At June 30, 2019, the Department reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Department contributions subsequent to the measurement date 1,950,328 -- Total $x,221 _S l �25 l 594 The $1,950,328 reported as deferred outflows of resources related to the Department's contributions to the pension plan subsequent to the measurement date will be recognized as a reduction of the net pension liability in the fiscal year ended June 30, 2020. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Net Deferred Outflows (Inflows) of Fiscal Year Ending June 30, Resources 2020 $ 2,516,812 2021 1,959,638 2022 1,299,979 2023 664,488 2024 279,038 $ 6,71.9..,955 Sensitivity of the Department's proportionate share of the net pension liability to changes in the discount rate — The following presents the Department's proportionate share of the net pension liability calculated using the discount rate of 7.00%, as well as what its proportionate - 102- Deferred Deferred Outflows Inflows of of Resources Resources Differences between expected and actual experience $ 604,656 $ 210,052 Net difference between projected and actual investment earnings on pension plan investments -- 173,185 Changes in assumptions 3,614,219 -- Changes in proportion and differences between employer contributions and proportionate share of contributions 3,752,674 868,357 Department contributions subsequent to the measurement date 1,950,328 -- Total $x,221 _S l �25 l 594 The $1,950,328 reported as deferred outflows of resources related to the Department's contributions to the pension plan subsequent to the measurement date will be recognized as a reduction of the net pension liability in the fiscal year ended June 30, 2020. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Net Deferred Outflows (Inflows) of Fiscal Year Ending June 30, Resources 2020 $ 2,516,812 2021 1,959,638 2022 1,299,979 2023 664,488 2024 279,038 $ 6,71.9..,955 Sensitivity of the Department's proportionate share of the net pension liability to changes in the discount rate — The following presents the Department'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 HAWAII Notes to the Basic Financial Statements .lune 30, 2019 share of the net pension liability would be if it were calculated using a discount rate that is I - percentage -point lower (6,00%) or 1 -percentage -point higher (8.00%) than the current rate: I% Decrease Current Discount 1% increase {6.00°/.} Rate (7.00%) (8.00%) Department's proportionate share of the net pension liability $ 43,5903009 $ 33,5223053 $ .25;222,572 Pension Plan fiduciary 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. Payables to the pension plant — At June 30, 2019, the annual amount payable to the ERS totaled $106,258, which represents the employer contribution for the month of June 2019, as required by HRS. Past -Retirement Benefits Other than Pensions (OPEB) Net OPER liability, OPEB expense, and deferred outflows of resources and deferred inflows of resources related to OPER — At June 30, 2039, the Department reported a net OPEB liability of $16,431,746. The net OPEB IiabiIity was measured as of July €, 2018, and the IotaI OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of that date. For the year ended lune 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: $1,990,004 reported as deferred outflows of resources related to the Department's contributions to the OPEB plan subsequent to the measurement date will be recognized as a reduction of the net OPER liability in the fiscal year ended June 30, 2020. -I03- Deferred Deferred Outflows Inflows of of Resources Resources Net difference between expected and actual experience $ -- $ €,005,637 Changes of assumptions 367,012 Net difference between projected and actual earnings on OPER plan investments -- 188,871 Employer contributions subsequent to the measurement date 1,990,000 -- Total $ 2,357,012 $ 1,194,508 $1,990,004 reported as deferred outflows of resources related to the Department's contributions to the OPEB plan subsequent to the measurement date will be recognized as a reduction of the net OPER liability in the fiscal year ended June 30, 2020. -I03- COUNTY OF HAWAII 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: L.0 82.7.495) Sensitivity of the net QPEB liability to changes in the discoitnt rate — Tile following presents the net CPEB liability of the Department, as weal as what the Department's net OPEB IiabiIity would be if it were calculated using a discount rate that is l -percentage-point lower (6.00°/x) or 1 -percentage -point higher (8.00°/x) than the current discount rate: l% Decrease Current Discount I% Increase (6.00°/x) Rate (7,00%) (8.00%) Department's net OPEB liability $_ 21.771.1 1.5 $ 16,431,746 $ l?.19LX-6 Sensitivity of the net QPEB liability to changes in the healthcare cost trend rates — Tile following presents the net QPEB liability of the Department, as well as what the Department's net OPER liability would be if it were calculated using a healthcare cost trend rate that is l - percentage -poi nt lower (6.00%) or 1 -percentage -paint higher (8.00%) than the current discount rate: Current Healthcare Cost I% Decrease Trend Bate 1% Increase Department's net OPEB liability I_ I19J4JU $ IM31ZZ46 $ _22.247.534 The EUTF issues a publicly available financial report that includes financia[ statements and required supplementary information, which is available on-line at their web -site www.cutf.hawaii.gov or by contacting them at P.O. Box 2121, Honolulu, HI 96805-212 1. -104- Net Deferred Outflows (Inflows) of Fiscal Year Ending lune 30. Resources 2020 $ (175,635) 2021 (175,635) 2022 (175,637) 2023 (115,920) 2024 (113,489) Thereafter7( 1,180 L.0 82.7.495) Sensitivity of the net QPEB liability to changes in the discoitnt rate — Tile following presents the net CPEB liability of the Department, as weal as what the Department's net OPEB IiabiIity would be if it were calculated using a discount rate that is l -percentage-point lower (6.00°/x) or 1 -percentage -point higher (8.00°/x) than the current discount rate: l% Decrease Current Discount I% Increase (6.00°/x) Rate (7,00%) (8.00%) Department's net OPEB liability $_ 21.771.1 1.5 $ 16,431,746 $ l?.19LX-6 Sensitivity of the net QPEB liability to changes in the healthcare cost trend rates — Tile following presents the net QPEB liability of the Department, as well as what the Department's net OPER liability would be if it were calculated using a healthcare cost trend rate that is l - percentage -poi nt lower (6.00%) or 1 -percentage -paint higher (8.00%) than the current discount rate: Current Healthcare Cost I% Decrease Trend Bate 1% Increase Department's net OPEB liability I_ I19J4JU $ IM31ZZ46 $ _22.247.534 The EUTF issues a publicly available financial report that includes financia[ statements and required supplementary information, which is available on-line at their web -site www.cutf.hawaii.gov or by contacting them at P.O. Box 2121, Honolulu, HI 96805-212 1. -104- COUNTY OF HAWAII Notes to the Basic Financial Statements June 30, 2019 Prior Period Adjustment The financial statements of the Department 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 where revenues are recorded when measurable and probable of collection. An adjustment was made to reduce non-current customer deposits and increase unrestricted net position by $1,641,537 as of June 30, 2018. Beginning net position as of July 1, 2417 was also increased by $1,641,537. -105- COUNTY OF HAWAII Required Supplementary Information .tune 30, 2019 Schedule of Changes in the Net OPEB Liability and Related Ratios Last 10 Fiscal Years* Net OPEB liability Plan fiduciary net position as a percentage of the total OPEB liability Covered -employee payroll Net OPEB liability as a percentage of Covered -employee payroll - 106 - $ 400,834,810 $ 16,431,746 27.3% 51.3% $ 174,190,644 $ 10,212,595 230.1% 160.9% 2019 Coun Department Total OPEB Liability Service Cost $ 12,056,311 $ 698,126 Interest on the total OPEB liability 36,036,284 2,264,524 Benefit payments (17,998,013) (1,016,548) Difference between expected and actual experience (3,679,099) (1,184,347) Change in assumptions - 7,244,956 432.233 Net change in total OPEB liability 33,656,439 1,193,988 Total OPER liability - Beginning 517,774,914 32,509,555 Total OPER liability - Ending $ 551,431,353 $ 33,703,543 Plan fiduciary net position Contributions - employer $ 32,829,013 $1,936,548 Net investment income 9,474,156 1,11 I,306 Benefit payments (17,998,013) (1,016,548) Administrative expense (29,227) (3.336) Net change in plan fiduciary net position 24,275,929 2,027,970 Plan fiduciary net position - Beginning I26,320,614 15,243,827 Plan fiduciary net position - Ending $ 150,596,543 $ 17,271,797 Net OPEB liability Plan fiduciary net position as a percentage of the total OPEB liability Covered -employee payroll Net OPEB liability as a percentage of Covered -employee payroll - 106 - $ 400,834,810 $ 16,431,746 27.3% 51.3% $ 174,190,644 $ 10,212,595 230.1% 160.9% COUNTY OF HAWAII Required Supplementary information June 36, 2019 Net OPEB liability Plan fiduciary net position as a percentage of the total OPER liability Covered -employee payroll Net OPEB liability as a percentage of Covered -employee payroll $ 391,454,300 $ 17,265,728 24.4% 46.9% $ 168,570,640 $ 9,791,132 232.22% 176.34% * This schedule is intended to present information for 10 years, as of the measurement date of the collective net OPEB liability for each respective fiscal year. Additional years will be built prospectively as information becomes available. See accompanying notes to required supplementary information - 107- 2018 County Department Total OPEB Liability Service Cost $ 11,757,502 $ 687,414 Interest on the total OPER liability 34,046,407 2,135,490 Benefit payments (17,054,9871 (953,288] Net change in total OPEB liability 28,748,922 1,869,616 Total OPEB liability - Beginning 489,025,992 30,639,939 Total OPEB 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 266,457 16,370 Net change in plan fiduciary net position 22,118,934 2,174,434 Plan fiduciary net position - Beginning 104,201,680 13,069,793 Pian fiduciary net position - Ending $ 126,320,614 $ 15,243,827 Net OPEB liability Plan fiduciary net position as a percentage of the total OPER liability Covered -employee payroll Net OPEB liability as a percentage of Covered -employee payroll $ 391,454,300 $ 17,265,728 24.4% 46.9% $ 168,570,640 $ 9,791,132 232.22% 176.34% * This schedule is intended to present information for 10 years, as of the measurement date of the collective net OPEB liability for each respective fiscal year. Additional years will be built prospectively as information becomes available. See accompanying notes to required supplementary information - 107- COUNTY OF HAWAII Required Supplementary Information lune 30, 2019 Schedule of Contributions (OPEB) Last 10 Fiscal Years Countv: Fiscal Year Ended Actuarially Determined Contribution Contributions in Relation to the Actuarially Determined Contribution Contribution Deficiency (Excess) Covered- Employee Payroll Contributions as a %age of Covered - Employee Payroll June 30, 2019 $ 39,770,000 $ 39,770,000 $ -- 179,777,415 22.1% June 30, 2018 $ 37,748,000 $ 32,829,013 $ 4,918,987 $ 174,190,644 18.8% June 30, 2017 $ 36,472,000 $ 28,549,987 $ 7,922,013 $ 168,570,640 16.9% June 30, 2016 $ 33,614,000 $ 22,747,340 $ 10,866,660 $ 159,744,324 14.2% June 30, 2015 $ 32,478,000 $ 18,657,000 $ 13,821,000 $ 152,490,296 12.2% June 30, 2014 $ 30,526,000 $ 17,453,000 $ 13,073,000 $ 139,423,481 12.5% June 30, 2013 $ 29,494,000 $ 13,892,000 $ 15,602,000 $ 130,803,306 10.6% June 30, 2012 $ 36,193,000 $ 13,730,000 $ 22,463,000 $ 124,452,126 11.0% June 30, 2011 $ 34,969,000 $ 31,104,000 $ 305,000 $ 127,859,606 24.3% June 30, 20 10 $ 25,046,000 $ 28,182,000 ($ 3,136,000) $ 133,555,000 1 21.1% Department: Fiscal Year Ended Actuarially Detennined Contribution Contributions in Relation to the Actuarially Determined Contribution Contribution Deficiency (Excess) Covered- Employee Payroll Contributions as a °/nage of Covered - Employee Payroll June 30, 2019 $ 1,990,000 $ 1,990,000 $ -- $10,829,700 18.4% June 30, 2018 $ 1,933,000 $ 1,936,548 $ 3,548 $10,212,595 19.0% June 30, 2017 $ 1,867,000 $ 1,867,788 {$ 7881 $ 9,791,132 19.1% June 30, 2016 $ 1,914,000 $ 1,913,204 $ 796 $ 9,464,649 20.2% .tune 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 $ 267 $ 7,966,529 23,0% June 30, 2012 $ 2,400,000 $ 2,401,487 ($ 19487) $ 8,182,968 29.4% June 30, 2011 $ 2,319,000 $ 2,067,678 $ 251,322 $ 8,056,398 25.7% June 30, 2010 $ 1,607,000 $ 1,963,719 ($ 356,719) $ 9,459,759 20.8% See accompanying nates to required supplementary information -108- COUNTY OF HAWAII Required Supplementary Information June 30, 2019 Note — Significant Methods and Assumptions Beginning July 1, 2017, an actuarial valuation of the County's and Department's liability associated with other postemployment benefits Other than pension provided through the EUTF is performed as of July 1 of each year. The following summarizes the significant methods and assumptions used to determine titre actuarially determined contribution for the fiscal year ended June 30, 2019: Actuarial valuation date July 1, 2017 Actuarial cost method Entry Age Normal Amortization method Level percent, closed Equivalent single amortization period 20.2 and 18.9 for the County and Department, respectively Asset valuation method Market Inflation rate 2.50% Investment rate of return 7.40% Payroll growth 3.54% Salary increases 3.50% to 7.00% including inflation Healthcare cost trend rates PPC Initial rates of 6.60%, 6.60% and 9.00%; declining to a rate of 4.86% after 14 years HMO Initial rate of 9.00%; declining to a rate of 4.86% after 14 years Part B Initial rate of 2.00% and 5.00%; declining to a rate of 4.70% after 14 years Dental 3.50% V ision 2.50% Life Insurance 0.00% -109- COUNTY OF HAWAII Required Supplementary Information June 30, 2019 Demographic assumptions Based on the experience study covering the five year period ending June 30, 2015 conducted for the Hawaii Employees' Retirement System Mortality System -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 schcdule of changes in the net OPER IiabiIity and related ratios or the schedule of contributions (OPER). - 110- COUNTY OF HAWAII Required Supplementary Information June 30, 2019 Schedule of the County's and Department's Proportionate Share of the Net Pension Liability (ERS) Last 10 Fiscal Years County: Department: Proportionate Proportionate Share of the Plan Share of the County's County's Department's Net Pension Fiduciary Net Proportion of Proportionate Liability as a Position as a the Net Share of the County's °/nage of °/sage of the Measurement Pension Net Pension Covered Covered Total Pension Period Ended Liability (%) Liability ($) Payroll Payroll Liability June 30, 2018 4.8% $635,693,541 $168,484,880 377.3% 55.48% June 30, 2017 4.7% $609,904,199 $163,626,447 372.7% 54.8% June 30, 2416 4.6% $618,129,088 $156,556,514 394.8% 51.2% June 30, 2015 4.4% $382,070,813 $149,760,317 255.1% 62.4% June 30, 2014 4.0% $322,626,262 $137,669,418 234.3% 63.9% June 30, 2013 4.2% $377,465,856 $129,153,763 292.4% 58.0% Department: * This schedule is intended to present information for 10 years, as of the measurement date of the collective net pension liability for each respective fiscal year. Additional years will be built prospectively as information becomes available. See accompanying notes to required supplementary information Proportionate Share of the Plan Department's Department's Net Pension Fiduciary Net Proportion of Proportionate Liability as a Position as a the Net Share of the Department's °/nage of °/sage of the Measurement Pension Net Pension Covered Covered Total Pension Period Ended Liability (%) Liability ($) Payroll Payroll Liability June 30, 2018 0.3% $ 33,522,053 $ 9,742,440 344.1% 55.48% June 30, 2017 0.2% $ 28,365,453 $ 9,358,187 303.1% 54.8% June 30, 2016 0.2% $ 29,247,607 $ 9,046,930 323.3% 51.2% June 30, 2015 0.2% $ 18,940,065 $ 9,012,196 210.2% 62.4% June 30, 2414 0.3% $ 20,526,993 $ 8,272,307 248.1% 63.9% June 30, 2013 0.2% $ 18,469,400 $ 7,640,477 24L7% 58.0% * This schedule is intended to present information for 10 years, as of the measurement date of the collective net pension liability for each respective fiscal year. Additional years will be built prospectively as information becomes available. See accompanying notes to required supplementary information COUNTY OF HAWAII Required Supplementary Information June 30, 2019 County: Schedule of the Employer Pension Contributions (ERS) Last Ten Fiscal Years Actual Department: Fiscal Year Ended Statutorily Required Contribution Actual County Contributions Recognized by the Pian County County's Covered Payroll Contributions as a °/nage of Covered Payroll June 30, 2019 Contributions 1,950,358 Statutorily Contributions Contribution $ 10,318,136 as a °/sage of Fiscal Year Required Recognized Deficiency 1,757,461 County's Covered Ended Contribution by the Plan (Excess) Covered Payroll Payroll June 30, 2019 $ 44,853,953 $ 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, 2015 $ 34,013,001 $ 34,013,041 $ -- $ 156,556,514 21.7% June 30, 2415 $ 31,456,148 $ 31,456,148 $ -- $ 149,760,3 17 21.0% .tune 30, 2014 $ 26,503,830 $ 26,503,830 $ -- $ 137,669,418 19.3% June 30, 2013 $ 23,763,101 $ 23,763,101 $ -- $ 129,153,763 18.4% June 30, 2012 $ 20,884,021 $ 20,884,021 $ -- $ 123,218,017 16.9% 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% Department: Fiscal Year Ended Statutorily Required Contribution Actual County Contributions Recognized by the Pian Contribution Deficiency (Excess) County's Covered Payroll Contributions as a °/nage of Covered Payroll June 30, 2019 $ 1,950,358 $ 1,950,358 $ -- $ 10,318,136 18.9% June 30, 2418 $ 1,757,461 $ 1,757,461 $ -- $ 9,742,400 18.0% June 34, 2417 $ 1,603,278 $ 1,603,278 $ -- $ 9,358,187 17.1% June 30, 2016 $ 1,553,128 $ 3,553,128 $ -- $ 9,046,930 17.2% 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 $ -- $ 7,644,477 15.9% June 30, 2012 $ 1,210,106 $ 1,210,106 $ -- $ 7,849,473 15.4% June 30, 2011 $ 1,197,031 $ 1,197,031 $ -- $ 7,726,278 15.5% June 30, 2010 $ 1,417,853 $ 1,417,853 $ -- $ 9,476,143 15.6% See accompanying notes to required supplementary information - 112- COUNTY OF HAWAII Required Supplementary Information June 30, 2019 Note — Changes of Assumptions There were no changes of assumptions or other inputs that significantly affected the measurement of the total pension liability since the measurement period ended June 30, 2016. Amounts reported in the schedule of the proportionate share of the net pension liability as of the measurement period ended June 30, 2016 (fiscal year ended June 30, 2017) were significantly impacted by the following changes of actuarial assumptions: The investment return assumption decreased from 7.65% to 7.00%. Mortality assumptions were modified to assume longer life expectancies as well as to reflect continuous mortality improvement. Prior to the measurement period ended June 30, 2016 (fiscal year ended lune 30, 2017), there were no other factors, including the use of different assumptions that significantly affect trends reported in these schedules. - 113 - COUNTY OF HAWAII Required Supplementary Information .lune 30, 2019 Schedule of Changes in Total Pension Liability (Bandsmen Pension) Last Ten Fiscal Years* Measurement year ending 2019 2018 2417 June 30, Total Pension Liability Service Cost $ 7,392 $ -- $ 16,416 Interest on the Total Pension Liability 38,149 -- 36,289 Differences between expected and actual experience (89,947) -- -- Assumption Changes (44,293) -- (113,807) Benefit Payments (47,532) (58,808) (51347) Net Change in Total Pension Liability (136,231) (58,808) (114,449) Total Pension Liability — Beginning 1,087,972 1,146780 1,261,229 Total Pension Liability — Ending 1_9-51,741 S I,0$7,97-2 S--1 t4k Covered Employee Payroll $ 26,349 $ 49,505 $ 49,505 Total Pension Liability as a Percentage of Covered Employee Payroll 3,612.1% 2,197.7% 2,316.5% * This schedule is intended to present information for 10 years, as of the measurement date of the 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 WE,E NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS HIGHWAY FUND - Used to account for the costs of maintaining the County's highways and streets. Financing is provided primarily by fuel, motor vehicle weight and public utility franchise taxes. 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 accumulate moneys for the operation, maintenance, and administration of the County's solid waste management, collection and disposal systems. Financing is provided by tipping fees at the landfills and by disposal permit fees. CEMETERY FUND - Used to accumulate moneys to guarantee the future maintenance of County cemetery sites. Financing is provided from the sale of burial lots in County cemeteries. PARKING METER FUND - Used to account for the costs of maintaining County on -street and off-street parking areas. Financing is provided by the proceeds from parking meters. VEHICLE DISPOSAL FUND - Used to accumulate moneys for the towing, removal, disposal and recycling of abandoned or discarded automobiles and automobile parts. Financing is provided by annual Fees collected with motor vehicle registrations. BIKEWAY FUND - Used to accumulate moneys for the construction of bikeways within the County. Financing is provided by bicycle license fees. WORKFORCE INVESTMENT ACT FUND - Used to account for employment and training services provided to economically disadvantaged adults, dislocated workers and youth. Financing is provided by federal grants. GOLF COURSE FUND - Used to account for the cost of operating the Hilo Municipal Golf Course. Funding is provided from green fees and payments from restaurant and pro shop concessionaires. GEOTHERMAL RELOCATION AND COMMUNITY BENEFITS FUND - Used to account for the County's share of geothermal resource royalties received from the operator of a geothermal power plant located in the County. The funds are earmarked for a geothermal relocation program 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 DEDICATION FUND - Used to account for moneys deposited with the County by subdividers to provide land for parks and playgrounds in subdivisions. GENERAL EXCISE TAX FUND - Used to account for moneys collected from the general excise tax surcharge. SHORT-TERM VACATION RENTAL ENFORCEMENT FUND - 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 INTEREST FUND - Used to accumulate moneys for payment of interest on general obligation bonds. Moneys required to service interest maturities are transferred annually from the General Fund. BOND REDEMPTION FUND - Used to accumulate moneys for the 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 blacxk. -115 - COUNTY OF HAWAII Nonmajor Governmental Funds Combining Balance Sheet June 30, 2019 Special Revenue Funds Solid Parking Highway Sewer Waste Cemetery Meter Fund Fund Fund Fund Fund Assets Cash and cash equivalents $13,089,770 $ 9,448,479 $14,363,536 $152,409 $ 299,059 Investments - - - - - Imprest fund - 400 250 - - Receivables: Due from other governments 3,948,401 172,910 541,470 - - Due from other governmental funds 377,964 86,086 52,373 - - Due from other nongovernmental funds - 3,500 - - Trade, net of allowance for doubtful accounts - 1,626,672 1,557,414 - - Real estate held for sale - - - - - Other - - - - - 4,326,365 1,889,168 2,151,257 - - Total assets $17,416,135 $11,338,047 $16,515,043 $152,409 $ 299,059 Liabilities, Deferred Inflows and Fund Balances Liabilities: Accounts payable $ 1,161,355 $ 262,101 $ 2,477,330 $ - $ - Accrued payroll 589,841 218,327 404,034 - - Due to other governmental funds 808,850 484,752 827,239 - - Advance Collections -Intergovernmental - - 11,998 - - Other 28 80,428 31 - Total liabilities 2,560,074 1,045,608 3,720,532 - - Deferred Inflows of Resources Unavailable Revenue - 1,626,672 1,557,414 - - Fund balances: Restricted for: ]Debt service - - - - - Highways, streets and abandoned vehicles 14,856,061 - - - - Housing and rental assistance - - - - - Committed to: Sanitation - 8,665,767 11,236,997 - - Highways, streets and abandoned vehicles - - - - 299,059 Rental assistance and subsidy - - - - - Cemetery - - - 152,409 - Lower Puna area - - - - - Parks and recreational projects - - - - - Unassigned - - - - - Total fund balances 14,856,061 8,665,767 11,236,997 152,409 299,059 Total liabilities, deferred inflows and fund balances $17,416,135 $11,338,047 $!6,515,043 $152,409 $ 299,059 650,370 - - - 465,683 - - - 1,311,609 10,366,765 - - - - - - - - - - - 1,253,946 - - - 4,274,235 - - - - 91,351 - - - 22,597 - - - - 10,366,765 650,370 - (22,597) 4,274,235 465,683 2,565,555 91,351 $10,623,273 $ 650,370 $ 233,940 $ 32,063 $ 4,274,235 $ 486,875 $ 3,213,714 $ 91,351 (Continued) -117- Special Revenue Funds Vehicle Workforce Golf Gwherrnal Rcior Beauti- Hawaii County Park Disposal Bikeway Innmuon& Course &Community fiication Housing Dedication Fund Fund oaoort Act Fund Fund Beneras Fund Fund Agency Fund $10,623,273 $ 650,370 $ - $ 28,068 $ 4,274,235 $ 486,875 $ 2,868,787 S 29,438 - - - - - - - 61,727 - 2,000 - - 800 - - - 194,949 - - - [ 43,324 - - - - - - - 139,356 - - - 38,991 1,995 - - 61,447 186 - - 233,940 1,995 - - 344,127 186 $10,623,273 $ 650,370 S 233,940 S 32,063 $ 4,274,235 $ 486,875 $ 3,213,714 $ 91,351 $ 196,737 $ - $ 1,997 S 2,760 $ - $ 2,367 S 69,811 $ - 6,356 - - 51,960 - - 155,160 - 53,415 - 231,943 - - 18,825 57,459 - - - - - - - 309,219 - 256,508 - 233,940 54,660 - 21,192 591,649 - - - - - - - 56,514 - 650,370 - - - 465,683 - - - 1,311,609 10,366,765 - - - - - - - - - - - 1,253,946 - - - 4,274,235 - - - - 91,351 - - - 22,597 - - - - 10,366,765 650,370 - (22,597) 4,274,235 465,683 2,565,555 91,351 $10,623,273 $ 650,370 $ 233,940 $ 32,063 $ 4,274,235 $ 486,875 $ 3,213,714 $ 91,351 (Continued) -117- COUNTY OF HAWAII Non major Governmental Funds Combining Balance Sheet June 30, 2019 (Concluded) See accompanying independent auditors' report. - 118- Special Revenue Funds Debt Service Fund Total General Short-term Bond Nonmajor Excise Vacation Rental Interest Redemption Governmental Tax Fund Enforcement Fund Fund Fund Funds Assets Cash and cash equivalents $ - $ 257,037 $3,703,121 $ 8,493,339 $ 68,767,796 Investments - - - 21,255,026 21,316,753 Imprest fund - - - - 3,450 Receivables: Due from other governments 8,641,986 - - - 13,643,040 Due from other governmental funds - - - 16 655,795 Due from other nongovernmental funds - - - - 3,500 Trade, net aFallo%vancc for doubt Ful accounts - - - - 3,184,086 Real estate held for sale - - - - - Other - - 8,072 - 110,691 8,641,986 - 8,072 16 17,597,1 12 Total assets $8,641,986 $ 257,037 $3,711,193 $29,748,381 $107,685,111 Liabilities, Deferred Inflows and Fund Balances Liabilities: Accounts payable $ 102,847 $ - $ - $ - $ 4,277,305 Accrued payroll - 5,886 - - 1,431,504 Due to other governmental funds 2,497,958 - 16 - 4,980,457 Advance Collections -Intergovernmental - - - - 11,998 Other - - 63,199 185,000 637,905 Total liabilities 2,640,805 5,886 63,215 185,400 11,339,169 Deferred Inflows of Resources Unavailable Revenue - - - - 3,240,596 Fund balances: Restricted for: Debt service - - 3,647,978 29,563,381 33,21 1,359 Highways, streets and abandoned vehicles 6,041,181 - - - 22,013,295 Housing and rental assistance - 251,151 - - 1,562,760 Committed to: Sanitation - - - - 19,902,764 Highways, streets and abandoned vehicles - - - - 10,665,824 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 6,041,181 251,151 3,647,978 29,563,381 93,105,346 Total liabilities, deferred inflows and fund balances $8,641,986 $ 257,037 $3,71 1,193 $29,748,381 $107,685,111 See accompanying independent auditors' report. - 118- This page intentionally left blank, - 119- COUNTY OF HAWAII Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Fiscal Year Ended June 30, 2019 Revenues Fueltaxes Public utility franchise taxes Licenses and permits General excise tax surcharge Intergovernmental Charges for services Investment earnings (loss) Other Total revenues Expenditures Current: General Government Public safety Highways and streets Health, education and welfare Culture and recreation Sanitation Pension and retirement contributions Employees' health insurance Other Debt service: Principal Interest Total expenditures Excess (deficiency) of revenues over (under) expenditures Other Financing Sources (Uses) Transfers in Increases in capital leases Transfers out Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances at end of year 91,509 - Special Revenue Funds 9,303,956 - - - - Solid - Parking Highway Sewer Waste Cemetery Meter Fund Fund Fund Fund Fund 181,897 324,356 - - 713,726 8,056 $ 17,343,326 $- 1,123 121,435 - - 36,382,003 9,441,986 - - - - 12,499,695 - - - - 2,803,419 155,529 756,540 - - - 7,788,531 15,143,943 - 20,294 929,727 1,491 187,612 10,500 - 43,018,153 7,945,551 16,088,095 10,500 20,294 91,509 - - - - 9,303,956 - - - - 22,441,306 - - - - - 8,999,605 31,972,519 - - 2,655,116 844,757 1,781,234 - - 1,198,162 297,319 802,836 - - 911,503 181,897 324,356 - - 713,726 8,056 I,115,904 - - 66,725 1,123 121,435 - - 36,382,003 10,332,757 36,118,284 - - 6,636,150 (2,387,206)20,0_ 30,1 10,500 20,294 2,987,914 19,281,770 - 1,356,644 - 2,936,761 - (3,518,045} - - (2,161,401 2,987,914 22,218,531 - 4,474,749 600,708 2,188,342 14,500 10,381,312 8,065,059 9,048,655 141,909 $ 14,856,061 $ 8,665,767 $ 11,236,997 $ 152,409 - 120- 20,294 278,765 $299,059 - 46,832 - - - Special Revenue Funds - - Vehicle - Workforec Golf Creoihermul Reloc. Beauti- f iawaii County Park Disposal Bikeway Innovnnon& Course &Community fication !-lousing Dedication Fund Fund Opporl. Act Fund Fund Bencrits Fund Fund Agency Fund $ - $ - $ - $ - $ - $ - $ - 2,444,784 45,952 - - - 203,753 - - - - 689,797 - - - 20,724,490 - 6,130 - - 643,737 - - - - - - - - - - 2,817 2,809 35,978 - - - 2,052 - 657,678 - 2,486,892 45,952 689,797 643,737 2,052 203,753 21,384,985 2,809 - 46,832 - - - 236,394 - - - - 686,989 _ - - 21,371,468 - - - - 1,109,748 - 83,761 - - 1,691,082 - - - - - - - 28,795 - 2,808 231,567 - - 717,677 - 13,339 - - 112,525 - - 335,007 - - - - 32,230 - - 8,168 - - - - 5,097 - - 58 - 1,733,216 46,832 689,797 1,491,167 - 320,155 22,432,378 - 753,676 (847,430 2,052 116,402 1,047 393 2,809 - - - 760,368 - - 1,256,200 - - - - 100,320 - - - - - - - 860,688 - - 1,256,200 - 753,676 (980) - 13,258 2,052 (116,402) 208,807 2,809 9,613,089 651,250- 3( 5,855) 4,272,183 582,085 2,356,748 88,542 $ 10,366,765 $ 650,370$ - $ 2[2,597 $ 4,274,235 $ 465,683 $ 2,565,555 $ 91,351 (Continued) - 121 - COUNTY OF HAWAII Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Fiscal Year Ended June 30, 2019 (Concluded) Special Revenue Funds Debt Service Fund Total General Short-term Bond Nonmajor Excise Vacation Rental Interest Redemption Governmental Tax Fund Enforcement Fund Fund Fund Funds Revenues 26,191,320 69,615,396 Fuel Faxes - - Public utility franchise taxes - - Licenses and permits - 270,000 General excise tax surcharge 12,518,126 - Intergovernmental - - Charges for services - - Investment earnings (loss) - - Other - - Total revenues 12,518,126 270,000 Expenditures Current: General Government - 18,588 Public safety - - Highways and streets 2,371,945 - Health, education and welfare - - Culture and recreation - - Sanitation - - Pension and retirement contributions - 261 Employees' health insurance - - Other - - Debt service: Principal - - Interest - - Total expenditures 2,371,945 18,849 Excess (deficiency) of revenues over (under) expenditures 10,146,181 251,151 Other Financing Sources (Uses) Transfers in - - Increases in capital leases - - Transfers out L4,105,000 - Total other financing sources (uses) 14,105,000 - Net change in fund balances 6,041,181 251,151 Fund balances at beginning of year - - Fund balances at end of year $6,041,181 $ 251,151 See accompanying independent auditors' report. Ewa $ - $ - $ 17,343,326 9,441,986 15,464,184 - - 12,518,126 358,215 - 25,487,990 23,602,635 58,725 - 64,351 1,825,038 416,940 - 105,747,636 - - 8,343,956 - - 25,096,477 22,058,457 1,193,509 42,663,206 6,262,215 2,759,188 1,417,756 - 27,267,469 29,145,553 18,663,737 - 18,858,175 18,663,737 27,267,469 157,868,589 (I 8,246,797) (27,267,469j 5.2,124,953 ) 19,137,824 26,191,320 69,615,396 - - 4,393,725 - - (7,623,445) 19,137,824 26,191,320 66,386,076 891,027 (1,076,149) 14,265,123 2,756,951 30,639,530 78,840,223 S 3,647,978 $ 29,563,381 $ 93,105,346 COUNTY OF HAWAII Highway Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 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 retirement contributions Employees' health insurance Other Actual Variance Original Final (Budgetary Positive Budget Budget _ Basis) (Negative) $ 17,151,903 $ 17,151,903 $ 17,343,326 $ 191,423 7,800,004 7,800,000 9,441,986 1,641,986 24,951,903 24,951,903 26,785,312 1,833,409 11,700,000 11,700,000 12,499,695 799,695 1,600,000 1,600,000 2,730,19 l 1,130,191 500,000 500,000 362,247 (137,753) 85,000 85,000 567,480 482,480 (3,862,868) 38,836,903 38,836,903 42,944,925 4,108,022 under expenditures and other uses (3,200,000) 88,248 88,248 80,911 7,337 5,300 5,300 3,173 2,127 9,232,362 9,645,362 8,547,224 1,098,138 14,485,993 I4,072,993 13,102,862 970,131 9,200,000 9,200,000 9,009,763 190,237 2,575,000 2,800,000 2,655,422 144,578 1,400,000 1,275,000 1,194,841 80,159 1,350,000 1,250,000 1,094,279 155,721 Total expenditures 38,336,903 38,336,903 35,688,475 2,648,428 Excess (deficiency) of revenues over (under) expenditures 500,000 500,000 7,256,450 6,756,450 Other financing sources (uses) - transfers in (out) - Transfers in - General Fund - - - - Transfers out - Capital Projects Fund (3,700,000) (4,044,823) (3,862,868) 181,955 Deficiency of revenues and other sources under expenditures and other uses (3,200,000) (3,544,823) 3,393,582 6,938,405 Fund balance at beginning of year 10,381,312 10,381,312 10,381,312 - Fund balance at end of year $ 7,181,312 $ 6,836,489 $ 13,774,894 $ 6,938,405 See accompanying independent auditors' report. - 123- COUNTY OF HAWAII Sewer Fund: Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 2019 Revenues: Intergovernmental Charges for services - sewer fees Other Total revenues Expenditures: Sanitation Pension and retirement contributions Employees' health insurance Other Total expenditures Deficiency of revenues under expenditures Other financing sources: Transfers in - General Fund Excess (deficiency) of revenues and other sources over (under) expenditures Fund balance at beginning of year Fund balance at end of year See accompanying independent. auditors' report. - 124- Actual Variance Original Final (Budgetary Positive Budget Budget _ Basis) Negative) $ - $ - $ 155,529 $ 155,529 7,739,200 7,739,200 7,788,531 49,33I - - 1,491 1,491 7,739,200 7,739,200 7,945,551 206,351 10,862,820 10,862,820 8,733,011 2,129,809 1,002,304 1,002,300 838,412 163,888 443,500 423,500 295,229 128,271 584,000 600,000 438,287 161,713 12,888,620 12,888,620 10,304,939 2,583,681 (5,149,420) (5,149,420) (2,359,388) 2,790,032 2,987,914 2,987,914 2,987,914 - (2,161,506) (2,161,506) 628,526 2,790,032 8,065,059 8,065,059 8,065,059 - $ 5,903,553 $ 5,903,553 $ 8,693,585 $ 2,790,032 - 124- COUNTY OF HAWAII Solid Waste Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 2019 Actual Variance Original Final (Budgetary Positive Budget --Budget Basis) _ (Negative) Revenues: Intergovernmental $ 564,029 $ 729,883 $ 686,138 $ (43,745) Charges for services - tipping fees 11,620,000 11,620,000 15,143,943 3,523,943 Other 226,104 226,104 187,612 (38,492) Total revenues 12.410.133 12.575.987 16.017.693 3.441.706 Expenditures: Sanitation 32,723,086 32,918,940 31,200,361 1,719,579 Pension and retirement contributions 1,828,669 1,828,669 1,778,967 49,702 Employees' health insurance 854,400 854,400 799,196 55,204 Other 671,000 641,000 345,675 295,325 Total expenditures 36,077,155 36,243,009 34,124,199 2,1 18,810 Deficiency of revenues under expenditures (23,667,422) (23,667,022) (18,106,506) 5,560,516 Other financing sources: Transfers in - General Fund 19,281,770 19,281,770 19,281,770 - Excess (deficiency) of revenues and other sources over (under) expenditures (4,385,252) (4,385,252) 1,175,264 5,560,516 Fund balance at beginning of year 9,048,655 9,048,655 9,048,655 - Fund balance at end of year $ 4,663,403 $ 4,663,403 $10,223,919 $ 5,560,516 See accompanying independent auditors' report -125- COUNTY OF HAWAII Cemetery Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 2019 Revenues - other - sale of cemetery plots Expenditures - health, education and welfare Excess of revenues over expenditures Fund balance at beginning of year Fund balance at end of year See accompanying independent auditors' report. - 126 - Actual Variance Original Final (Budgetary Positive Budget Budget Basis) (Negative) $ 10,000 S 10,000 $ 10,500 5 500 10,000 10,000 - 10,000 - - 10,500 10,500 141,909 141,909 141,909 - $ 141,909 S 141,909 $ 152,409 $ 10,500 - 126 - COUNTY OF HAWAII Parking Meter Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 2019 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 independent auditors' report. Actual Variance Original Final (Budgetary Positive Budget Budget Basis _ (Negative) $ - $ - $ 20,294 $ 20,294 20,294 20,294 278,765 278,765 278,765 - $ 278,765 $ 278,765 $ 299,059 $ 20,294 - 127 - COUNTY OF HAWAII Vehicle Disposal Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 2019 Revenues: Licenses and pennits - vehicle disposal fee Charges for services - towing charges Miscellaneous Total revenues Expenditures: Sanitation Pension and retirement contributions Employees' 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 Fund Deficiency of revenues and other sources under expenditures and other uses Fund balance at beginning of year Fund balance at end of year See accompanying independent auditors' report. MINIM Actual Variance Original Final (Budgetary Positive Buffet Budget Basis) (Negative) ^ _ $ 2,280,000 $ 2,280,000 $ 2,444,784 $ 164,784 1,800 1,800 6,131 4,331 20,800 20,800 35,977 15,177 2,302,600 2,302,600 2,486,892 184,292 3,165,780 3,165,780 1,727,886 1,4.37,894 33,000 33,000 28,367 4,633 28,000 28,000 13,123 14,877 2,000 2,000 - 2,000 3,228,780 3,228,780 1,769,376 1,459,404 (926,180) (926,180) 717,516 1,643,696 (150,000) (150,000) - (150,000) (75,000) (75,000) - (75,000) (1,151,180) (1,151,180) 717,516 1,868,696 9,613,089 9,613,089 9,613,089 - $8,461,909 $ 8,461,909 $ 10,330,605 $ 1,868,696 MINIM COUNTY OF HAWAII Bikeway Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 2019 Revenues - licenses and permits - bicycle tax Expenditures - highways and streets Excess (deficiency) of revenues over (under) expenditures Fund balance at beginning of year Fund balance at end of year See accompanying independent auditors' report. Actual Variance Original Final (Budgetary Positive Budget Budget Basis,) ((Negative) $ 73,000 $ 73,000 $ 45,952 226,000 226,000 55,574 (153,000) (153,000) (9,622) 651,250 651,250 651,250 $498,250 $498,250 $641,628 - l29 - $ (27,048) 170,426 143,378 $143,378 COUNTY OF HAWAII Workforce Innovation & Opportunity Act Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 2019 Revenues - intergovernmental Expenditures: Health, education and welfare Pension and retirement contributions Employees' health insurance Total expenditures Excess of revenues over expenditures Fund balance at beginning of year Fund balance at end of year See accompanying independent auditors' report. Actual Variance Original Final (Budgetary Positive Budget Budget Basis) ((Negative) $ - $ 1,062,610 $ 1,004,441 $ (58,169) 1,047,963 989,794 58,169 14,377 14,377 - 270 270 - 1,062,610 1,004,441 58,169 $ - $ - $ - $ - 130 - COUNTY OF HAWAII Golf Course Fuad Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 2019 Revenues: Charges for services Expenditures: Culture and recreation Pension and retirement contributions Employees' health insurance Other Total expenditures Deficiency of revenues under expenditures Other financing sources: Transfers in - General Fund Excess of revenues and other sources over expenditures Fund balance at beginning of year Fund balance at end of year See accompanying independent auditors' report. Note: "Fund balance at beginning of year" in the above schedule is on the modified accrual and not budgetary basis, which is resulting in the negatvie fund balance shown above. - 131 - Actual Variance Original Final (Budgetary Positive Budget Budget _ Basis _ (Negative) $ 785,600 $ 662,569 $ 643,737 $ (18,832) 1,066,983 1,081,983 1,045,455 36,528 231,234 231,747 231,214 533 118,000 117,487 112,192 5,295 6,000 6,000 - 6,000 1,422,217 1,437,217 1,388,861 48,356 (636,617) (774,648) (745,124) 29,524 580,368 760,368 760,368 - (56,249) (14,280) 15,244 29,524 (35,855) (35,855) (35,855) - $ (92,104) $ (50,135) $ (20,611) $ 29,524 Note: "Fund balance at beginning of year" in the above schedule is on the modified accrual and not budgetary basis, which is resulting in the negatvie fund balance shown above. - 131 - COUNTY OF HAWAII Geothermal Relocation and Community Benefits Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 2019 Revenues Miscellaneous: Geothermal royalties Expenditures: General govemment: Planning and zoning Excess (deficiency) of revenues over (under) expenditures Fund balance at beginning of year Fund balance at end of year See accompanying independent auditors' report. Actual Variance Original Final (Budgetary Positive Budget Buffet_ Basis) (Negative) $ 500,000 S 500,000 $ 2,052 $ (597,948) 1,000,000 1,000,000 - 1,040,000 (400,000) (400,000) 2,052 402,052 4,272,183 4,272,193 4,272,183 - $ 3,872,183 $ 3,872,183 S 4,274,235 S 402,052 - l32 - COUNTY OF HAWAII Beautification )Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 2019 See accompanying independent auditors' report. M9192 Actual Variance Original Final (Budgetary Positive Budget Budget Basis) Negative) Revenues - licenses and permits - highway beautification $ 191,000 $ 191,000 $ 203,753 $ 12,753 Expenditures: Highways and streets 236,300 236,300 236,300 - Culture and recreation 157,650 I57,650 107,715 49,935 Total expenditures 393,950 393,950 344,015 49,935 Deficiency of revenues under expenditures (202,950) (202,950) (140,262) 62,688 Fund balance at beginning of year 582,085 582,085 582,085 - Fund balance at end of year $ 379,135 $ 379,135 $ 441,823 $ 62,688 See accompanying independent auditors' report. M9192 COUNTY OF HAWAII Hawaii County Housing Agency Schedule of Revenues, Expenditures, and Changes in Fund Balance - 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 contributions Employees' health insurance Total expenditures Deficiency of revenues under expenditures Other financing sources - transfers in - For the Fiscal Year Ended June 30, 2019 Original Final Budget Budget $ 20,734,644 $ 20,957,937 1,613 1,613 1,398,837 1,398,837 22,135,094 22,358,387 Actual Variance (Budgetary Positive _ Basis) _ (Negative) $ 20,576,134 $ (381,803) 141,430 141,430 2,817 1,204 137,500 137,500 520,178 (878,659) F 1172 ncQ lnRn 7781 23,006,369 23,229,662 21,568,793 1,660,869 811,588 811,588 718,491 93,097 364,160 364,1.60 332,684 31,476 24,182,117 24,405,410 22,619,968 1,785,442 (2,047,023) (2,047,023) (1,241,909) 805,114 Transfers in - General Fund 2,0I2,389 2,012,389 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 - $ 2,322,114 $ 2,322,114 $ 2,371,039 $ 48,925 - 134- COUNTY OF HAWAII Park Dedication Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 2019 Revenues - investment earnings Excess of revenues over expenditures Fund balance at beginning of year Fund balance at end of year See accompanying independent auditors' report. Actual Variance Original Final (Budgetary Positive Budget Budget_ Basis _ (Negative) 988 $ 988 988 988 88,542 88,542 88,542 - $ 88,542 $ 88,542 $ 89,530 $ 988 - 135 - COUNTY OF HAWAII Short -Term Vacation Rental Enforcement Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended .lune 30, 2019 Revenues - ST vacation rental fees Expenditures: General government: ST vacation rental enforcement Excess (deficiency) of revenues over (under) expenditures Fund balance at beginning of year Fund balance at end of year See accompanying independent auditors' report. Actual Variance Original Final (Budgetary Positive Budget Budget _ Basis) (Negative) $ - $ 800,000 $270,000 $ (530,000) 800,000 12,963 787,037 - - 257,037 257,037 - $ - S257,037 $ 257,037 - 136- COUNTY OF HAWAII General Excise Tax 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 over (under) expenditures Other financing sources (uses) - transfers in (out) - Transfers out - Capital Projects Fund Deficiency of revenues and other sources under expenditures and other uses Fund balance at beginning of year Fund balance at end of year See accompanying independent auditors' report. Actual Variance Original Final (Budgetary Positive Budget Budget Basis) (Negative) $ - 10,000,000 10,108,045 108,045 - 137- 5,895,000 2,792,321 (3,102,679) 4,105,000 7,315,724 (4,105,000) (4,105,000) 3,210,724 - 3,210,724 3,210,724 3,210,724 3,210,724 Assets Cash and cash equivalents Investments Due from other agency funds Other receivables Total assets Liabilities COUNTY OF HAWAII Agency Funds Combining Statement of Agency Funds Net Position June 30, 2019 Performance State Improvement Improvement Improvement Improvement and Weight District District District District Refundable Tax No. 18 No. 19 No. 20 Revolving Deposits Fund Fund Fund Fund Fund fund $1,775,915 $ 515,498 $ 364,999 $ 14,746 $ 10,478 $ 332,554 250,060 225,000 169,949 - 6,182 22,508 579 519 - $1,775,915 $ 521,680 $ 637,567 $ 240,325 $ 180,946 $ 332,554 Vouchers payable $ - $ - $ - $ 75,000 $ - $ - Due to other agency funds 8 - - - - 5,850 Accrued liabilities 1,775,907 7,523 7,523 - - - Advances payable - 15,224 9,880 2,148 - 326,704 Assets held for the benefit of improvement districts - 498,933 620,164 163,177 180,946 - Totalliabilities $1,775,915 $ 521,680 $ 637,567 $ 240,325 $ 180,946 $ 332,554 See accompanying independent auditors` report. - 138 - Non -Profit Organ and Business Payroll Flexible Lapsed License Tissue Improvement Clearance Spending Warrants Plates Education District Fund Account Fund Fund Fund l - Kailua Total $ 554,271 $ 382,314 $ 346,242 $ 18,580 $ 2,001 $ 944 $ 4,318,542 - - - - - 645,009 7,242 - - - 7,242 3,205 - 13,429 - - 6,048 52,470 5 557,476 $ 382,314 $ 366,913 $ 18,580 $ 2,001 $ 6,992 $ 5,023,263 $ 1,315 $ - $ - $ - $ - $ - $ 76,315 1,224 - - 160 - - 7,242 554,937 382,314 366,913 18,420 2,001 944 3,116,482 - - - - - - 353,956 - 6,048 1,469,268 $ 557,476 $ 382,314 $ 366,913 $ 18,580 $ 2,001 $ 6,992 $ 5,023,263 - 139- COUNTY OF HAWAII Agency Funds Combining Statement of Changes in Assets and Liabilities For the Fiscal Year Ended June 30, 2019 Balance July 1, 2018 Additions Deductions State Weight Tax Fund Assets Balance June 30, 2019 Cash and cash equivalents $2,142,521 $ 25,338,870 $ 25,745,476 $ 1,775,915 Liabilities $ - $ 287 Due to other non -agency funds 1,514 1,341 Accrued liabilities Vouchers payable $ - $ 25,454,627 $ 25,454,627 $ - Due to other agency funds 91 527,579 8 Total liabilities 91 8 Accrued liabilities - due to State of Hawaii 2,142,430 25,338,862 25,705,385 1,775,907 Total liabilities $2,142,521 $ 50,793,497 $ 51,160,103 $1,775,915 Improvement District No. 18 Fund Assets Cash and cash equivalents $ 541,229 $ 120,102 $ 145,833 $ 515,498 Other receivables 4,168 122,123 120,109 6,182 Total assets $ 545,397 $ 242,225 $ 265,942 $ 521,680 Liabilities Vouchers Payable $ - $ 287 Due to other non -agency funds 1,514 1,341 Accrued liabilities 4,168 100,938 Advances payable 12,136 3,088 Assets held for the benefit of improvement districts 527,579 98,916 Total liabilities $ 545,397 $ 204,570 - 140- $ 287 $ - 1,514 1,341 98,924 6,182 - 15,224 127,562 498,933 $ 228,287 $ 521,680 COUNTY OF HAWAII Agency Funds Combining Statement of Changes in Assets and Liabilities For the Fiscal Year Ended June 30, 2019 -141 - Balance Balance July 1, June 30, 2018 Additions Deductions 20I9 Improvement District No. 19 Fund Assets Cash and cash equivalents $ 316,273 $ 120,036 $ 71,310 $ 364,999 Investments 246,928 3,132 - 250,060 Due from other non -agency funds - 14,227 - 14,227 Other receivables 3,741 117,601 113,061 8,281 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 553,166 124,410 57,412 620,164 Total liabilities $ 566,942 $ 244,876 $ 174,251 $ 637,567 Improvement District No. 20 Fund Assets Cash and cash equivalents $ - $ 21,148 $ 6,402 $ 14,746 Investments - 225,000 - 225,000 Other receivables - 579 - 579 Total assets $ - $ 246,727 $ 6,402 $ 240,325 Liabilities Vouchers Payable $ - $ 75,000 $ - $ 75,040 Advances payable - 2,148 - 2,148 Assets held for the benefit of improvement districts - 169,579 6,402 163,177 Total liabilities $ - $ 246,727 $ 6,402 $ 240,325 -141 - COUNTY OF HAWAII Agency Funds Combining Statement of Changes in Assets and Liabilities For the Fiscal Year Ended .lune 30, 2019 Liabilities Vouchers payable $ Balance $ 493,717 $ 493,717 $ - Balance 1,554 5,625 July 1, 5,625 - 5,850 Advances payable June 30, 313,145 514,464 2018 554,937 Additions Total liabilities Deductions 2019 Improvement District Revolving Fund $ 1,000,247 $ 332,554 Payroll Clearance Fuad Assets Assets Cash and cash equivalents $ 7,857 $ 2,621 $ _ $ 10,478 Investments Due from other non -agency funds 166,070 2,709 3,879 308,917,628 - 169,949 Other receivables 250 3,966 519 250 519 Total assets $ 174,177 $ 7,019 $ 250 $ 180,946 Liabilities 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 $ 520,639 $ 506,855 $ 332,554 Liabilities Vouchers payable $ - $ 493,717 $ 493,717 $ - Due to other agency funds 1,554 5,625 5,850 5,625 - 5,850 Advances payable Accrued liabilities 313,145 514,464 500,905 554,937 326,704 Total liabilities $ 318,770 $ 1,014,031 $ 1,000,247 $ 332,554 Payroll Clearance Fuad Assets Cash and cash equivalents $ 590,494 $ 327,357,238 $ 327,393,461 $ 554,271 Due from other non -agency funds 2,709 308,914,919 308,917,628 - Other receivables 5,118 3,966 5,879 3,205 Total assets $ 598,321 $ 636,276,123 $ 636,316,968 $ 557,476 Liabilities Vouchers payable $ - $ 144,404,453 $ 144,403,139 $ 1,315 Due to other agency funds 1,554 1,224 1,554 1,224 Due to other non -agency funds 964 - 964 - Accrued liabilities 595,803 348,961,605 349,002,471 554,937 Total liabilities $ 598,321 $ 493,367,282 $ 493,408,127 $ 557,476 - 142- COUNTY OF HAWAII Agency Funds Combining Statement of Changes in Assets and Liabilities For the Fiscal Year Ended June 30, 2019 Flexible Spending Account Assets Cash and cash equivalents Liabilities Accrued liabilities Lapsed Warrants Fund Assets Cash and cash equivalents Due from other agency funds Other receivables Total assets Liabilities Vouchers payable Accrued liabilities Total liabilities Non -Profit License Plates Fund Assets Cash and cash equivalents Liabilities Vouchers payable Due to other agency funds Accrued liabilities: Due to non-profit agency Total liabilities Balance Balance July 1, June 30, 2018 Additions Deductions 2019 $ 370,548 $ 411,784 $ 400,018 $ 382,314 $ 370,548 $ 411,784 $ 400,018 $ 382,314 $ 334,401 $ 12,841 $ 1,000 $ 346,242 7,270 7,242 7,270 7,242 5,323 13,429 5,323 13,429 $ 346,994 $ 33,512 $ 13,593 $ 366,913 $ - $ 1,001 $ 1,001 $ - 346,994 33,184 13,265 366,913 $ 346,994 $ 34,185 $ 14,266 $ 366,913 $ 13,775 $ 79,535 $ 74,730 $ 18,580 $ - $ 83,605 $ 83,605 $ 160 - 13,775 79,375 $ 13,775 $ 163,140 $ mom 74,730 18,420 158,335 $ 18,580 COUNTY OF HAWAII Agency Funds Combining Statement of Changes in Assets and Liabilities For the Fiscal Year Ended June 30, 2019 Balance Balance July 1, June 30, 2018 Additions Deductions 2019 Organ and Tissue Education Fund Assets Cash and cash equivalents $ 1,392 $ 6,248 $ 5,639 $ 2,001 Liabilities Vouchers payable $ - $ 5,569 $ 5,569 $ - Accrued liabilities - due to State of Hawaii 1,392 6,248 5,639 2,041 Total liabilities $ 1,392 $ 11,837 $ 11,208 $ 2,001 Business Improvement District 1-Kailua Assets Cash and cash equivalents Other receivables - BID l-Kailua Assessment Due from other non -agency funds Total assets Liabilities Vouchers payable Accrued liabilities - due to KVBID Accrued liabilities Assets held for the benefit of improvement districts Total liabilities $ 301 $ 823,343 $ 822,700 $ 944 5,700 825,410 825,062 6,048 - 7,558 7,558 - $ 6,001 $ 1,656,311 $ 1,655,320 $ 6,992 $ - $ 821,612 $ 821,612 $ - 237 944 237 944 64 45 109 - 5,700 821,654 821,306 6,048 $ 6,001 $ 1,644,255 $ 1,643,264 $ 6,992 -144- COUNTY OF HAWAII Agency Funds Combining 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 Due from other agency funds Due from other non -agency funds Other receivables - BID 1 -Ka ilua Assessment Other receivables Total assets Liabilities Vouchers payable Due to other agency funds Due to other non -agency funds Accrued liabilities Accrued liabilities - due to non-profit agency Accrued liabilities - due to State of Hawaii Accrued liabilities - due to KV BI D Advances payable Assets held for the benefit of improvement districts Total liabilities See accompanying independent auditors' report. Balance Balance July 1, June 30, 2018 Additions Deductions 2019 $4,637,561 $ 354,814,405 $ 355,133,424 $4,318,542 412,998 232,011 - 645,009 7,270 7,242 7,270 7,242 2,709 308,936,704 309,925,186 14,227 5,700 825,410 825,062 6,048 18,600 258,217 244,622 32,195 $ 5,084,838 $ 665,073,989 $ 665,135,564 $ 5,023,263 $ - $ 171,342,209 $ 171,265,894 $ 76,315 7,270 7,242 7,270 7,242 3,918 3,110 3,918 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 1,777,908 237 944 237 944 333,876 520,985 500,905 353,956 1,260,622 1,221,328 1,012,682 1,469,268 $ 5,084,838 $ 548,142,933 $ 548,204,508 $ 5,023,263 -145- COUNTY OF HAWAII Private Purpose Trusts Combining Statement of Private Purpose Trust Net Position June 34, 2019 Assets Cash and cash equivalents Investments Interest receivable Total assets Net Position Held in trust For other parties Total net position See accompanying independent auditors` report. - 146- Shippers' Total Geothermal Wharf Private Asset Trust Purpose Fund Fund Trusts $ 211,839 $ 797,645 $ 1,009,484 1,917,537 1,708,073 3,625,610 5,845 - 5,845 $ 2,135,221 $ 2,505,718 $ 4,640,939 $ 2,135,221 $ 2,505,718 $ 4,640,939 $ 2,135,221 $ 2,505,718 $ 4,640,939 - 146- COUNTY OF HAWAII - Private Purpose Trusts 33,501 Combining Statement of Changes in Private Purpose Trust Net Position I05,684 For the Fiscal Year Ended .tune 30, 2019 40,875 Shippers' Total Geothermal Wharf Private Asset Trust Purpose Fund Fund Trusts Additions Contributions: Puna Geothermal Venture Investment earnings: Net increase (decrease) in fair value of investments Dividends Interest Total additions Deductions Claims payment Grant payments Investment Fees Total deductions Change in net position Net position, beginning of year Net position, end of year See accompanying independent auditors' report. $ 59,000 $ - $ 50,000 33,501 72,183 I05,684 - 40,875 40,875 28,663 1,518 30,181 112,164 114,576 226,740 293,760 - 293,760 - 94,418 94,418 - 13,495 13,495 293,760 107,913 401,673 (181,596) 6,663 (174,933) 2,315,817 2,499,055 4,815,872 $ 2,135,221 $ 2,505,718 $ 4,640,939 - 147 - This page intentionally left blank. -148W STATISTICAL SECTION (UNAUDITED) Contents Page Financial Trends — These schedules contain trend information to help the reader understand 110 the County's financial performance and well-being have changed over time. 149 Revenue Capacity— These schedules contain information to help the reader assess the County's most significant local revenue source, the property tax. 154 Debt Capacity — These schedules present information to help the reader assess the affordability of the County's current levels of outstanding debt and the County's agility to issue additional debt in the future. 160 Demographic and Economic Information — These schedules offer demographic and economic indicators to help the reader understand the environment within which the County's financial activities take place. 163 Operating Information - These schedules contain service and infrastructure data to help the reader understand how the information in the County's financial report relates to the services provided and the activities performed by the County. 165 it TI y vY i- 7 r r — 00 rr -- Grp- .%\ in n rpt 17� rp*�8 a a 'c CD ra r= r� -,ra r a: N�❑�pp� N b N 0�0 � rl� OOo 12i N �D W N t# — '❑ 00 N 00 00 OC N ._. 441 M V'i ry a 00 N In - In O 'D M In 7 p Ch a C7 r Inm a+ 1:rm M 00 OC; O 0Z P 00 T C 00 C7 rn C7 r CO 4 V N M N V P T w r K P ❑+ r p w cnr w w w O r en � r �❑ tII -0T �/1 f' n N ' In W In 00 4^ n 56 61 'D p fJ �o 0, 7 f� P- 00 m r%114,ry 'n oupI ^I nv�naa,, rq p '" M � M V ter-' i9 09 41% K 01 01 ppm C o P oro 6+ U � � N b opo lc ? 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W O y C T Edi C C •e E u v E E w ani ' s .0 'a °y c .� ,. E G m m � w m a° n L° p a e4� E obi = L 3 e a C7 6 T U ri a m c 01 n n CL eai to u n 0.C]U OU la m V xQ HFc W C7a�yU AC7c*Fa- - 150 - N W ON m Y. V 7 oc Q• Do R� '1T 4; M a ^ N %C N ^ N ' N m �'•' b , m N Q w 00 P r.j O+ tT rn vv r+ d u� n �var� n ar n co T n ri Q M ao ov 69 w w w M 10 O NO a 10 00 00., V't 41 Q W V} T W N?, N d; W m iV - rn ' n w ry � M M Mn �D W f'•� � � � -+ ry i� m s•y 01 - N p ur'� h N 69 w w n r� n n IG o, vo r M ' 4 -_ C7 v N ' r r ' N v O et rV T10 W dry' N o0 10 GO`7 g N [PV 00 op t- vo a r - r4In 4A VA w w W O O n2 v'1 [V N NIT T w n ^ Q• M o0 vt NM cS M T ' Q• e•y Ifl M Octr(._ le w M v o o v N N a ^ I+� o M I M IA iA w w r'1 r�1 d 0 T T T Y1 N n N h n r N ID Q• Ol T O d m M ' 7 rl vO m 10 M �D h f? 2 O P 60 L Vj N g N N � V7 iR Vt .D n v Q• rn r� n a .- op In n %0 W T r + C11 N V V w FA fie w .p v1 It ... V] a r d e1 P m Nm ' -- O PO n m '(l N n r'1 T -.. h .p Vi �O fr ry O -� P I'V N en �'+ [l- M O r �O ca VI n r O M 4n 0o N n h M T d MY M n O 'O ^ v V 0 0 �O n N ON v N Q N w w w w Vi w N iD C to N v ID e� %D�M�pp ago v .o LM r Tr o rn [� v r• to - o°a,a,rQv o r�'vnni H (21 CD r! N N 64 w F! 69 T r4 7 v] Vy M n r d M M O b YP1 ' ti0 N a ' O; m Vdi v] W) 01 h O n N N 0 N C 'o ('•I pPp oro N !p Tlll N P T [z T �n N r N r N vii vii w vi w w 'mrn f1 0• W 4 V P C= +O N ca fV N O n P vo 0o d er C M n G O - -^ n M ('l v d G 4 10d' O 4'1 m Yr+ In to It - C4 •� GO cy ofl fry ✓ W N N N N 4 N w w fa 64 C G OQ C y = W � O y N X O] .Cyy W V c v.w r c -0 n •� u c a v a d- - E N 'c °JLiu y v m wo w ro a ami e E u is -= 7 x C 7 L.0 G C C a C 7 E] R. R b L'. C Q. •N d C p ;g A 7 U 7 w F - 151 - Q r•'1 •..• T Q% N V1 V r r C, a r C4 r v oo Id n W- ni r _= a+ o0 v N N N .-� ... r en N r4 ..-• r �4�'S M 'S w 64 C. 1 r- N , 1 m O 1% o�E r O b [� o0v V�'1 OnO r Ovi HO M DDC w 69 rn 7 r ? 00 �o In4 CI r"1 kn P r 4 C� V kn a 1 1 1 m a% N 00 T V1 1 O e} to rn r ^ N_ m T •D O 10 n^� C n n N : rq vi Iri a r r- o a : r +i 6N { q 1 ' 09 10 N r"I W) W) v Vlj � n N Vi 69 h� G� n 1 i Cp+ or0 Irn � M , k k I �{ O V1 W rn T N ••-• a rn h N rt N CD ry m Iri w .�. O u Y ^ ^ J7 69 4A a b� r n N w m t I 900 w C, n r o 0o b t 1 1 tf+ m N m I m r c c• -:1 r -zr r a-, a c�4 60 N 10_ b �rD ooln Q N 'aY Cw Wf iFi ZZ Ln 00 F -CD tl- 1 1 Irrq 4� 1 , 1 000 Vim., C 1� hr'1 O c /+1 N en vi N i m 'O N rv� r%4 h o a,�a88alU' a no a ry a N r"I '? N N m N O N U w w N r „' p in 1°'r7 n a rry vii N m r C O 0, r ? N r"1 'V Irl 10 O r4 �1 � r r-; m oo 00 ^ N r rh C. 7 p L F's yy ❑ CO r7 cO O 00 00 1 1 %C cqa, raj mV�'� K , 1 1 1 W 1 nr M S�+ �C �C p C. oo T 0c Oi C. t- 0 .0 CIL r- T opa 10 r- Z �a ro a � N Nmi r- G T d r et In r� 1= � u � r w m a T O_ 00 O 1 i 1 1 06 h ID O 1 1 i Cj N EL N O O '? N In Vim] N y 4 W (A W p V i u Cua 5 _ � U C � r u a G. t0 '7 ti r hl b .o 10 a 7 Lt.13 C s chi tm c ,� y E v) LL �y MO ei .� C •W `11 O O C O u�i m '�' E W n p W C C G ua�2au< .Ni 7 "' V �u ��F- 7 z ¢ �a D -152- Revenues, Property fax Public smice company tax Fuel tax Pubic utility franchise tali Licenses and pennns General excise for surcharge Intergovemtnentat Charges for services In%V-51ment earnings {Ions}' Settlement contributions Other Toms Revenues Expenditures: Current: General government Public safety Highways and streets Sanitation Health, education and welfare Culture and recrentton Pension and retirement contnbutions Employees' health insurance Other postemployment benefits Outer Debt service: Principal Interest Capital outlay Total Expenditures Revenues over (under) Expenditures Other Financing Sources (Uses): Sale of assets Capital leases State Revolving Fund loans Solt of bonds Issuance ofbnnd anticipation notes (BANS) Refunding bonds Premium on bonds Refunding bondsfBAN.5 issuance costs Paymcnl to refunded bond escrow agent Retirement ofreFunded debt Transfers in Trattsfers out Total other financing snurres NCL change in fund balances Debt service ns a percentage of noncapital expenditures Table 4 COUNTY OF HAWAII Chnnges in Fund Balances, Governmental Funds (ivlodiiied accrual basis of nccounting) Las( Ten Fiscal Years (Amounts in thousands) Pill Ifi49F�I11�4rTW�III�zgDI $215,548 S216,5tI 5248,231 5201,201 5223,482 5236,190 5249,054 5266,517 5301,699 $313,631 9.647 9297 9,897 t0,766 10,380 10,386 9,801 8.423 7,612 8,494 7,446 7,603 8,293 6,353 7,373 7,633 7.934 8,289 13,342 17,343 8,963 9,416 11,065 11,087 10,793 10,824 9,004 7,951 8,331 9,442 14,725 15.097 15,790 5,991 19,618 22,046 22,432 22,932 24,066 24,653 12.518 77,614 93,748 100,867 79,912 75,257 86,272 85,173 79,220 90,025 101,627 18,909 16,416 16,885 17,055 19.392 20,357 21,672 21,708 23,553 27,516 2,253 510 406 (518) 1,704 716 614 632 1.592 4.148 12.500 3,241 7,874 4,201 4,399 30,084 9,769 16,132 11,791 4,832 4.643 358,346 376,472 375,635 358,646 398.083 404,197 421,816 427,463 475,052 524,015 40,586 34,251 35.088 33,360 36.679 40,845 40,488 44,819 41,571 41,800 108,798 104,9) 7 104,523 106,885 111.221 122,819 127,451 136,163 137,718 145,094 20,222 17,114 17,338 (7,923 20,270 20,984 22,479 20,329 71,401 27,448 35,675 28,424 29,511 30,672 29,949 31,464 34.015 38,671 39,352 43,815 25,519 26,847 23,749 24,199 23,070 74,540 25,380 30,535 29,876 31,)09 17,266 16,01 16,763 16,337 18,334 24,956 21,561 21,196 71,324 22,022 28,509 27,284 27,773 29,816 33,032 38,485 41,359 43,718 49,494 53,137 23,573 25,217 23,902 76,011 26,786 27,731 30,112 32,147 33,802 17,572 15,700 17,347 - 3,170 4,532 7,180 11.495 14,831 39.637 4.773 4.758 4,183 2,991 3,238 4,686 3,931 3,839 4,622 4,314 20,720 42,233 24,834 25,718 19,013 22,044 22,432 22,032 86,906 36,577 14,584 14,841 15,032 14,345 14,644 13,871 12,974 17,289 17,739 19,223 100,653 87,782 71,220 48,555 51,369 79,398 144,288 111,109 41.924 51.897 456,578 446,973 395.916 376,822 390.775 451,375 533,650 529,342 540,560 527,595 (98,272) (70,499) (24,281) (18,176) 7,308 (47,182) (111,834) (101,879) (65.508) [3,5801 10 6 153 1 10 25 66 21 23 47 1,948 47 2,521 1,307 14 1,971 3,389 3,769 3,809 6,717 6,811 9,257 4,569 4,991 3,072 7,317 8.130 5,154 7.439 45,400 - 50,480 - 130,136 - 107,116 19,400 - - 59.800 - - - 47,510 106,254 48,784 - 2,078 17,570 23,174 5,998 (19) - - (5081 (276) - (45,352) (128.920) (54,537) (9.635) 6I,495 56,099 59.971 51,356 61,238 59,394 57,412 66,864 75,711 77,240 (61,495) (56,099) (59,971) (51.356) (61.238) (59.394) (57,412) (66,864) {75,7111 (77,240) 27,750 56.388 7,243 66,872 3,096 1,996 140,908 71,720 116,071 14,263 $(70.522) S(14.111) 5(13,038) S 48.696 5 10,404 5 (45,186) 5 29,074 S {30,159) S 54,563 5 10.683 10.4% 1 S.9°5 12 3°0 13 916 10.41!a 9.3% 91'. 9 41, M9% 10.5% U naudued - sae accarrrpa nymg t mi ependem audt tors' report I Amount for fiscal year 2014 has been changed for consistency M1lin 0 N a d C'% O M^ O T N n c�.. n PO 00 Ln m M 00 T' d' rV 1G r^ Ln O V1 W' \p � o }0 n) N_ r! � r l � 04 -- n -,t cr ^ � rl� c� "It "Icv V -- ao yG C N 0,0o N "D r- 4 v -n ^ 00 W- •� •� q+ rn d N %C 00 c� - -4- Q ID F a+ 00 r ^ +r'f N a N CT 0 w7 tip a- 4._, N ^ ntC C^ W M C 00 oa � C7 a M 4 yr ca � vi N --' Ln V)r ori M ^ ^ ^ Ln Ln ^ v1 y �N 6R NNi z� UQ ,n m — O O O d rn r) V'7 wi a tri v1 a O v") oo v1 Ln �' �• O C7 a r^1 v7 vi v1 —woo— �• M 60 V1 v7 cC4 CA 06 00 O� T 0; 00 00 0• T Oti 0� 00 C� V7 v] b9 619 t0 a �,o Cn c4l V'i d N rn un r9 CT `et �-D �G a, a, N 00 to CT O N 00 r M eY 00 aN0% N N Do O �G OO r� C1 N V7 00 llc r et 00 r v1 1 t of V'S 6] k �o r 00 M v'i n 5o n C, n It O 00 fi d^ r" i n a+ mm O er n N C' N M 00 -1-1- 00 ON p 6', 10 Tr r 'n V'i � F" .a oc V'S ••• 0% V'7 \Q rn %o r V] r� ^ kO T Ln 00 M Ln ON > y M^^ r'7 rlet r' M^ N (-I[ N Eos 01 C,9 b 7A I& da a a d a 'n W) �n u-, v d V� v't d d VI v, tn Ln m O ^ a a O M v1 V'1 n & oq 00 rn 110 V� Ln 00 C, G1 C� �10 00 vi kn Rj ati ivN O+ a% a, 00 CT W) v7 Co U D OG N m 4i �o 'cd' d' O to 00 ^ 00 %O rnW r� d 00 _ _ - 00 V) \0 r C N �.- 7 n 00 %o d � N 0 7 r- a ^ 'o "d •C �,o M C, 00 4 m G v i v oC) N 'It N n a r O rzC� ^ 00 r'I, r, rt v a r' ry a m m N .0 ad r C4 to d d a m't ni 00 os 00 Q� m F- b r r`r'- rLn v 0� w 000 rr-- � CMNr v t - � m AI M N N rn rn N N N N 45 b4 N Vf 0 p j_L, K LL N 0 A 0 O 0 V a CLQ ip O N cG R Q y C C alv G R Y 3 m ovQxu �V Q Gv0. CQ2U �QU QQ CZ O N .� L7- } a d - 154- Ln W .O 4] �:2 [e 4.. Lai Qui r tr) V'1 �-- 0w0 It � G C v'i Ov -* N a Ln rn C N V e+1 ,n M &4 C to V7 ? R n rn n rn 4� Ot Oti � � 00 Cti V'� V7 69 en 00 C Off+ C irk O Qom+ P N 09 C7 r -� 00 N lz CA I- r M M � Qti 00 �tr C7 M� r N N r O� V"1 "6 00 V7 V1 M V1 ati o+ ON 0: 00 rT n v; LnC3-- kr) r+nITaoo+:T \0 r kO IT 00 r r1l T A C N N 00 O 00 ON O� N 1D MIt C N r 00 r r Y7 R a 'tYN Ln b9 6A h V � O = Ln Q Z LG c � cc, Q ma t-' N H V H N c o aG¢ uo ¢Ui V') N'It ct rn 9 d 00 ON Ln oa VZ n rn ov v r- IZ 00 N 00 It G m m= tiY Ln 1.0 N 00 r, r a n �Ci M Cr+ N N r N 6A r r^ N V �c C 0% %a\0 Vi \0rrI d C\ N C � 1�41 r- 00 m r-, In N 4 N +D M �r Ln rn 6A NFA o sn Lna C:+ � vi wn %n yrs n V -1n � n � V 00 00 ^ M 00 Ln kn d 00 00 C Q N 00 Q+ T O� C1• L4 V'! V7 O C O a 4 O• a �.O �O 69 — — in OO -- N w W" CA M M ON r N r o0 Q' 41 01 00 f- rn 00 N -- �t 0% 1.0 en V-� r- N I�r I N m kD a s %O N w a %0 IC NEA C] V•� 00 N N 0 L L u Cl V'! Ln a d Ln Ln in VZ V L OO 00 M OO ll� V7 L b T ON T T T 00 Os iv (A m 0 a N M C 0 N CV CD >% C7i 0000 r`�'`r ON O wO 000 T m 00 [4 of rr c C �n a N n -i� U N rh -+ N r kn G wl� u 64 Cfl H N � 0 G v p 7 � ce m m .a v r 3 m U �VJ V � U � � •L < u Q U x ¢ - 155- 00 M a+ N Ln N 00 nl P V7 00; N Q V, 6 t•! lO +n v-, r, %o .n d r V, rr7 N V'f M rry •- N N - C•! � b4 bq9 C OR 07 Q a N 00 2 Cl a o o CD of ca u» :a 61 m 0 4 N a� CD '^f' P n O D7 d N 00 N 7� M rn o4 rt Or 17� rn a Q+ 00 G V, �o V) L It V Qtio k.0 IT 0 r`i � N LL N N Ct N N_ 6R Erg VI 1V fl10 O 7 O _ T W y EM � o E y y a ckQxU r -< to um A CR CG F- nA d4 OyJ C M c X Lm 09 Lai 75 U tA Cz tt n oo OO 14 WI) %0 10 O (D Q C- OO N C+ OO �❑ M 1D u'] O+ b Ll Nr a m p OO n v D vt �- ❑ 00 0% n a% 10 V) v'7 b9 N 6R O OO ❑O Q Q N OO �- ^ O O O G O O: C 10 1O (0a n 00 c �n r- Ln Q 00 14 --0"-=0%n41400"n n Cn O rn N ^ rn Q 10 T n a v) n v, M 69 64 V O W OO d C N ❑O 6 O p 4 4 O, 0 1D p (A 0 .J Cl N G. R n N Q 00 O 00 rV ❑ �.c rn �D 14 Oo 10 OO U M tia •.-. T n : d� a r- rn '11, op w cln F ON (ON rn- 00 C O y r 1 r- r- �n zr N 00 ry U. M N f+4 fA Ln d N M OO p P 1n 14 eY Q (7� v1 �n 4+ 4 v7 eF n fn -- �r Q [TI ll \c ll C 10 = 00 v n C O oo oo fh 10 N 0o v �O •.- p C+ oo s p 4• 10 N n b9 N FR Vn kn Ln kn W) In to In V'1 P OD OO C Q N W .- �• ooccdO+olelc 0�0 IT V) Ln T 1 14 C -i 4n0 N ❑� p 0O ❑'� Iq rn T r V' a ni �,c W o: o ri r= M v vLn — ^1 It�N r- o0 •-• •- � r- V" -- N N N h1 iA 65 v CC �n 'n �n Ln 'n ,-I U-1 u CR OR ❑O Q p N ❑O y, ocaooa.oyold 4 1a Q N to O, � r- � C1 oO v, °� •n � lu T �n r ooac�r- r- v 000 Nr o O+ ono oma 1'n4 r11 ^ 4 V OY n 14 tf rn Ow ^ oo {,i, rpt N rV N Cn flA 64 L T' c LL a� 7 q � R � p � a�j eci 5 LA c 3 ro co � < = u z u = < Ln d N M OO p P 1n 14 eY Q (7� v1 �n 4+ 4 v7 eF n fn -- �r Q [TI ll \c ll C 10 = 00 v n C O oo oo fh 10 N 0o v �O •.- p C+ oo s p 4• 10 N n b9 N FR Vn kn Ln kn W) In to In V'1 P OD OO C Q N W .- �• ooccdO+olelc 0�0 IT V) Ln T 1 14 C -i 4n0 N ❑� p 0O ❑'� Iq rn T r V' a ni �,c W o: o ri r= M v vLn — ^1 It�N r- o0 •-• •- � r- V" -- N N N h1 iA 65 v CC �n 'n �n Ln 'n ,-I U-1 u CR OR ❑O Q p N ❑O y, ocaooa.oyold 4 1a Q N to O, � r- � C1 oO v, °� •n � lu T �n r ooac�r- r- v 000 Nr o O+ ono oma 1'n4 r11 ^ 4 V OY n 14 tf rn Ow ^ oo {,i, rpt N rV N Cn flA 64 - 156 - r- Tr 00 zr Lei \o ^ n �r n Q C7, n OMO ON C\ C^, � Q � rV Ln r= M M f i kn fv ri -- tO N r- N w CD W N f -- 9/'s rn N qr O r"1 m N 14 00 ^ ^ ^ kn 10 O0 fr9 N 4A Lrn to Ln V9 Ln kn Ln p oO OO p O N OO •� •- o c o 0 o v+ 0 1Q �-D ffl c p o 0% a Wn oo n^^ rl r'1 ON ['1 to Q Ln to rl 00 N N r7 1p r -� of ' cl u'1 I vi r- c 1a v, 1c c� N N rn r- IT n p N N M N fA f. 4J V-1 V7 [/y ✓1 to In V7 V7 v'1 u Q OO 00 p p N OO aoacCZ) mCD\0\d ry V% R ❑ n_ R n to c" Tr v+ oo r "a rr N n O Q, OO oO 14 OO n o T �noopccv � X14 R O000 kn er o v Ln N v n cl) N M V FA N c LL O 7 p � al 5 74 O O 'v H ❑ �QV04 - 156 - r- Tr 00 zr Lei \o ^ n �r n Q C7, n OMO ON C\ C^, � Q � rV Ln r= M M f i kn fv ri -- tO N r- N w CD W N f -- 9/'s rn N qr O r"1 m N 14 00 ^ ^ ^ kn 10 O0 fr9 N 4A Lrn to Ln V9 Ln kn Ln p oO OO p O N OO •� •- o c o 0 o v+ 0 1Q �-D ffl c p o 0% a Wn oo n^^ rl r'1 ON ['1 to Q Ln to rl 00 N N r7 1p r -� of ' cl u'1 I vi r- c 1a v, 1c c� N N rn r- IT n p N N M N fA f. 4J V-1 V7 [/y ✓1 to In V7 V7 v'1 u Q OO 00 p p N OO aoacCZ) mCD\0\d ry V% R ❑ n_ R n to c" Tr v+ oo r "a rr N n O Q, OO oO 14 OO n o T �noopccv � X14 R O000 kn er o v Ln N v n cl) N M V FA y>1 to Wn a N o v to kn ao Ln d R �a N o to Q -- ON N a m — o r- in Cl v% wl, w 0a �? C7 Q N ao r7 �• v t7 Ln 10 00 �r N n I— •o et to Q N SY la rn rh o6 Da T of rn 'CY � =5 C Q � ON C- [- N OQ 14D m rh hl w� N p, C7 lc N an a +n M 1 N rn I DO C', n N C7 '-. ..... v'i t` � cn 6q M 6R y9 v, 4 Q W*) v -I U -r v-� G O kn Q Q W) vi V) vl �rfl W C) a ON -10 %0 — � — C7 C] G+ %0 � 9) to r'� O1 — 6 — Ot 00 I- I• %0 N Q \0 O � 00 kn w ON V) �o I— Q tt eT w!1 Q O14,o0 Ln 1b (- . = N 0 7 � C7 �G 1G b n^ ^ L+0 M G r- O ❑+ R r% --I r- 00 N ] g CS ^^ O: C 1C Ln G 00 N%0 O+ ON Lo oa w r•1 C' 1D w I46 @ M w CT h ❑1 I- 00 w r^ 00 kn M V'1 to 00 00 I- 00 m d J Ori C7 T- Ln tD N Or 'IT fn •o Q Wn r- Ln 00 ry — Q W y y 64 {!3 Fa4 V U L =' a O p a Ln Q C) Ln In Wn In U o o to a o kn in kr, In — Ln n t- v Fro —r-- Q 4 ❑� 1G �b � � .... .... Q d � � +p :ry F Ffl is EA v o Q Q N N 4. LG L C� ❑ Gt7 p a M r- r— — 00 N o0 N to .D Q N N lb M N p G tel N Ol r" I T Q ^ M `ct >, �G cN tib O• 00 N (V ✓1 G a m C 10 c! 'It Ir •-• O^ of CC 1L M \o [h do Q T- ^ ^ r- s a 00 M In (7%\0 r- M � = v I --v, vi •o -- = 'o N 00 C6 r= v 1D O1 00 01 Nr- Ul a [� 00 v+ 00 Lr) N v7 00 in 10 00 Y+ tf! r r- kn 00 r- v+ r% 10 00 00 v-� ❑% -- ❑n ja • m It M N M lO M N 4 C� � Fag 4:3 v ep ayi CA LL- GL y sl i. cG p y C iy,,, LLQ —al O K LLQ ce o o� y as ❑d too ❑w u 0.o o� euc a! ¢ x V 5 d U x d¢ V 5¢ U x Q y EJ } O CL N - 1S7 - 119 Table 6 COUNTY OF HAWAII Principal Taxpayers June 30, 2019 and 2010 Note: Gross valuation at January 1,2017: $32,025,991,419 Gross valuation at January 1, 2008: $28,153,504,064 Source: County of Hawaii, Department of Finance, Real Property Tax Division Unaudited - see accompanying independent auditors' report. -158 - Fiscal Year 2019 Fiscal Year 2010 Percentage Percentage 2018 of Total 2009 of Total Assessed Assessed Assessed Assessed Taxpayer Business Valuation Rank Valuation Valuation Rank Valuation Kohanaiki Shores LLC Developer $ 377,529,200 l 1.2% $ - - Mauna Kea/Hapuna Beach Corps. Developer;HoteI 167,947,800 4 0.5% - - Hualaiai Investors LLC Developer/Hotel 173,204,200 3 0.5% 227,679,700 3 0.8% Hilton Resorts Corp. Timeshare 286,084,400 2 0.9% 114,478,900 7 0.4% MAPS Orchid Hotel LLC Hotel 126,941,500 7 0.4% - - Mauna Lani Resort Inc. Developer/Hotel - - 101,612,800 6 0.4% Raptor Residence LLC Residential 75,269,600 8 0.2% 69,833,600 9 0.2° n Target Corporation Retailer 67,028,600 10 0.2% - - SMG 1 Hotel Waikoloa LLC Hotel 72,712,700 9 0.2% - - Hilton Land Investment I LLC Hotel 150,166,200 5 0.5% 237,983,900 2 0.8% 1250 Oceanside Partners Developer - - - - Mauna Kea development Corp. Hotels/Dev. - - 259,905,800 1 0.9% DHL Mahi Opco LLC Developer/Hotel 135,41 1,300 6 0.4% - - WB KD Acquisition LLC Developer - - 187,819,800 4 0.7% WB-LCP Orchid Owner LLC Hotel - - 135,679,800 5 0.5% Kona Coast Resort Ltd Condo/Time Share - - 73,824,400 8 0.3% BREIWaikoioa LLC Hotel - - 65,000,600 10 0.2% $ 1,632,295,500 5.0% $ 1,473,819,300 5.2% Note: Gross valuation at January 1,2017: $32,025,991,419 Gross valuation at January 1, 2008: $28,153,504,064 Source: County of Hawaii, Department of Finance, Real Property Tax Division Unaudited - see accompanying independent auditors' report. -158 - -159- G C R G y y e b o 0 o a o a a d G' 0 L) P Q a� V rn � 00 r� 4 n � C7 G, oo ; rn 000 er N 1D v 000 I N� n x rn 0, a+ c o .Ei m M It � ct n Q+ I"- chh C% u 0 ❑ u7 _ f D v VC a o o a a q o a v o y C 4 d0 C7 d O C• � oo C.7 U ❑� n Ln r- n �D N C7 Q y n� L,-, n� v N o 0 0 ee yt r= v� CT % a0 00 n 00 � o: al " a -ri � o Iq " 1:1^ ❑ � vi Q M � � 00 00 (,] N N r, N N N � N N � N G M 0 N Oti 00 L V -f 00 C � a. —_ n Ono �Mh C � C [� Lf) 00 co 'cif N L7 r- tfi r•1 rI- d r�•1 M cl N N 00 oma © o n \0 vi � Ln Ln vi vi U C � ro4y] v V V V o � a � o � d 1 a � o � a v a 0 o 0 '- ! a tic rn c>t n rn n n ct n a rn v+ rn a n v+ 00 o * O U G fl Qt 00% C> N yrs C)Ld) G � re • o o G n � � - 0N0 � n�i D y Ln N n N 00 O lQ U7 ai, ❑ C 4 oo ON Oti '- N M Ln ON 6 U N N N N N N N fn N n C+ C Ln n N v� n m e -U x rli �D N 00 �Q r1 �r (7N 10 kn v7 � ID 0O O� 00" -- I- r l GO G N N d CIL`: OO ^ !r' n --� — � ON M I- �o C7 N N N w N N N N M M cG cm n n +2 n OO Ut Tr' N G Q C a G d G Q C 0 N N N N N N N C•F N N -159- y •� N M 00 M S� v cc r C « O O0 N n h N Vii Vim'] N rrr C% cic0 ., hn MM a W r N M N HW,.tl d' C v a 6 [) ,0 M c ^ 00 N V7 C %q r C D_0 p n I =M� m�R� n co 0 r�7 " at � m m m N� C13 f �r �a,In & 4 2 0C)0 cot,�hNN O p DO �d R%Z5 M N ch %D G O m r n n 00 00 a n a+ O 4y o0 v kr1 �D m •D M �D O• W V r r= ^ �C rV ❑. q� M Cp'1 M rn Nil rN'1 Nr m Z; V O vrF$_ C• rry r y O O n Z ury OSb •-• .-: N N N N -= N Cl N W o � U (7 c Q e v e o 0 o e Y �C ry � .a n to h m N 'n to c nwv n nova b Q' u� r o0 D 0a r ,� O � L7 u g v e a v m ye 0- C. tE G b O 4 h w rn O fir'] N Fes- u a y •� N M 00 M S� v cc r C « O O0 N n h N Vii Vim'] N rrr C% cic0 ., hn MM a W r N M N HW,.tl d' C v a 6 [) ,0 M c ^ 00 N V7 C %q r C D_0 p n I =M� m�R� n co 0 r�7 " at � m m m N� C13 f �r �a,In & 4 2 0C)0 cot,�hNN O p DO �d R%Z5 M N ch %D G O m r n n 00 00 a n a+ O 4y o0 v kr1 �D m •D M �D O• W V r r= ^ �C rV ❑. q� M Cp'1 M rn Nil rN'1 Nr m Z; V O T ONO 00 N v Q OO n [1 R3 ry C� v N n h w'1 fn N Oc U lr7 v c0 �D rl0% N N '' CO u9 b � N oM0 r"7 M u"I n n O+ U n N �D N •D N N N eo V7 Q GY "j .Oa o r/1 C5 N w N ns V'Y N M �D In VS m N Y1 �D N Y 0% C 'sy '? V1 C7 00 T tr'1 v �p 1p tp kn a C flC w r1 r•1 N N N N N M M m tJ 7 4 'D o+ P 0 T N v= r G v Q tri V] in N rn � d rte.. - C7 C% W to w r b 0 M ON c o n n n m Ln oO oa C: N r� N M r•� ry p r•1 eY e} O _ N M v 1r'1 b n L+O 41 °' Qaaoo�oo 00 -160- C C m vrF$_ C• rry r y O ^ N M O O n Z b Opo j C. 00 OD N N a W D T ONO 00 N v Q OO n [1 R3 ry C� v N n h w'1 fn N Oc U lr7 v c0 �D rl0% N N '' CO u9 b � N oM0 r"7 M u"I n n O+ U n N �D N •D N N N eo V7 Q GY "j .Oa o r/1 C5 N w N ns V'Y N M �D In VS m N Y1 �D N Y 0% C 'sy '? V1 C7 00 T tr'1 v �p 1p tp kn a C flC w r1 r•1 N N N N N M M m tJ 7 4 'D o+ P 0 T N v= r G v Q tri V] in N rn � d rte.. - C7 C% W to w r b 0 M ON c o n n n m Ln oO oa C: N r� N M r•� ry p r•1 eY e} O _ N M v 1r'1 b n L+O 41 °' Qaaoo�oo 00 -160- C C m Table 9 !If]!1 � � 1 r> r'i�l � C I:�►.►i� ii 1 Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years NOTES; (a) See Table 10 for debt applicable to legal debt margin. (b) See Table 5 for net taxable property values. (c) See Table 1 i for population data. Details regarding the County's outstanding debt can be found in the notes to the basic financial statements. Unaudited - see accompanying independent auditors' report. - 161 - Debt Percent of Applicable to Net Taxable Fiscal Legal Debt Property Per Year Margin (a) Value (b) Capita (c) 2010 277,481,633 1.0% 1,549 2011 305,615,691 1.2% 1,636 2012 317,699, 844 1.3% 1,679 2013 315,676,941 1.3% 1,654 2014 298,709,024 1.3% 1,538 2015 312,632,049 1.2% 1,592 2416 362,963,113 1.4% 1,829 2017 405,488,342 1.4% 2,1024 2018 414,446,063 1.4% 2,062 2019 425,153,552 1.3% NIA NOTES; (a) See Table 10 for debt applicable to legal debt margin. (b) See Table 5 for net taxable property values. (c) See Table 1 i for population data. Details regarding the County's outstanding debt can be found in the notes to the basic financial statements. Unaudited - see accompanying independent auditors' report. - 161 - 0 O ❑s � �r+ Ln ❑+ r�i v7 Oe c•o D N n N OHO R fn"+00 +n b°1 69 6R h9 FR 00 as �C -zr N C N ❑ 7 aON a H m H O � � � M Vi 49 ❑ p O C m n o 00 : +n I vi c Cl OC:plQ rn � iy iA Y1 00 N N M ui n Qom+ rn Y�'1 en ii} iR 00 N O ❑+ N n n N 1-%� t+1 00 e•�i m FA b9 � T 4 N M P rry 00 ❑+ N r� ❑ d N n N ry vi n 00 ❑, 1/i ^ d Wi m N 00 � 4A �o G %0 ry C n hi ci 0 n r 00 M 00 �"1 D Q eq N M �C N C 7\ n N DO vi m N vi wn 06 M w m u N C n : N c� ry n W" n N N fA FH E •� _ E � W � o ❑_ o `a l52 - v N ❑s � �r+ +n ri vi o0 O+ N D N n d OO � rn b°1 69 6R ii. C N ❑ 7 7 m H U � � � M ❑ ❑ p O C iy Table 1 1 COUNTY OF HAWAII Demographic and Economic Statistics Last Ten Fiscal Years Fiscal *Personal *Per Year *Resident Income Capita Ended Population (thousands Personal School Unemployment .lune 30, as of.luly 1 of dollars) Income Enrollment Rate 2009 183,629 $ 5,517,497 $ 30,047 30,138 9.9% 2010 185,381 $ 5,717,885 $ 30,844 29,741 10.0% 2011 187,229 $ 6,114,237 $ 32,656 30,103 9.7% 2012 189,191 $ 6,318,657 $ 33,398 30,314 8.3% 2013 190,821 $ 6,544,583 $ 34,297 33,948 6.6% 2014 194,190 $ 6,771,329 $ 34,870 29,985 6.5% 2015 196,428 $ 7,067,347 $ 35,979 29,865 5.2% 2016 198,449 $ 7,618,924 $ 38,392 29,753 4.7% 2017 200,381 $ 8,053,011 $ 40,188 29,666 3.5% 2018 200,983 $ 8,531,484 $ 42,449 29,601 3.7% * Amounts reflect subsequent adjustments Source: County of Hawaii, Department of Research and Development, Bureau of Economic Analysis, State of Hawaii Department of Labor, State of Hawaii DOE and University of Hawaii Hilo Unaudited - see accompanying independent auditors' report. - 163 - Table 12 COUNTY OF HAWAII Principal Employers, County of Hawaii June 30, 2019 and 2010 Source, • County of Hawaii, Department of Research and Development Unaudited - see accompanying independent auditors' report. - 164 - 2019 2010 Percentage Percentage of Total County of Total County Emplover Employees Rank Employment Employees Rank Employment State of Hawai' i 13,500 1 18.7/o 8,115 I 9AD O County of Hawaii 2,700 2 3.7% 2,745 2 3.2°0 United States Government 1,300 4 I.rIn 1,364 3 1.6% Four Seasons Resort Hualalai 1,300 3 1.8% 562 9 0.7% Mauna Kea and Hapuna Prince Resorts and Mauna Kea Services 1,012 5 1.4% - - - Hilton Waikoloa Village 921 6 1.3% 984 4 - KTA Super Stores 850 7 1.2% 800 6 1.1 ° o The Fairmont Orchid, Hawai' i 600 8 0.8% 577 8 0.9° 0 Mauna Lani Resort (Operations), Inc. - - - 685 7 0.8° o Hapuna Beach Prince Hotel - - - 487 10 0.6° o Waikoloa Beach Marriott Resort & Spa 320 9 0.4% - - - North Hawaii Community Hospital 313 10 0.4% - - - Wal-Mart - - - 852 5 1.0% Total 22,816 31.5% 17,171 19.9% Total employee count 72,050 86,325 Source, • County of Hawaii, Department of Research and Development Unaudited - see accompanying independent auditors' report. - 164 - -165- g°Oagun�'ooCDeg�r � C oC CD rn Q. N ri oc �O N O n as e0 N 00 O ed -- a p Kj M In [Y C n vti 4 ri n r ^ ry n e6 vc ri n oo d ry N eq N r1 ^ N +D N— ^ 00 ^ C N n N oppp pp p pp O CO, O C c/ g" p� pp Gp p M G P T pp O et pp p! G pp pp O N 1^ O. O tl; Ln N rf N rf rn�r O C a 4 Ol h r Nkq YMl b /'�f b r ca N r1 n �G N ti! owe �O rn N pp pp pp QQ p p pp V? pp O O N _r tei'1 r,7+ CD to N 10 T 6 rq uMN M N ? H N N pp pp00 0,pp pp pp > a 7 Yn5 pp M N N r u P rnh R O N ^ Ln +D -WN 10 N 4� ^ r ~ G N T rY �i b � -� v O ry �o ri ao ao a r o oo �O n .o � ec •..• � q n o v N M N u— n n ^ rn n ^ a v^ n o o ol o o o 2 °O =� Q. ari T er, U1 ea ry �o In •� r r [� oo n r ry M M o C� N pp pp pp p aa r1 Ci b oQ v7 y' �} n Q• n �D oo r N rt r N O G O v7 N N m C+ N Q a n v r i f i n o vi ry oo — e r� oa r kn fN c b GG _ V t '❑ `� � � N � � O v Q it � D ❑ C,l C.Y .� OC op r "..- 3 r,., ''-' 'n n n c w w ❑ O a V y O .G C Q eV 'C v O id 3 .� ❑ ofl i? CJ U U `i U LL d C[ 0. ,7 0. L.L .-1 {..7 P. V Q i17 7 Cn u — Q S? U -165- V i p] C rn o�O N en 7, 000 Q N M O n G 04 Od In n0 m T 70 00 N N N In 166- In kel n M — 0 Ory d+ r a p v7 In00 N n? vl " ^ b0 c9 N OO OO ON N G N N b fR ^ N N N n n � N m n C? '.� n N Yl r•7 OG er er N p Ga4 N N n H prq go In 00 S en S VW'i N %n GOO N M N M�� ^ N n to O r v7 �O r••� [1 -= t= ell r- oo N m 4:1 N — N DO V't �C p C7 Nm do N n M Oh 00 rn o in %D m 00 0 o er M v) n v y� d 0 n n N a d' N R r4 t ^ O OG ^ O, f4 tp vl �r p b C Lr O � v1 IJj — N - N (21, 00 0000 m W � eq OQO C• rry V' t•i O� OO r N V1 M N rn �p eV C O • M vkr) N 'n w, N In p t� CN W) �G `�r DO kn N n n , n^ M n ` 41 _ C r N n M p In � r4 tri — Vi ON — G n V' 10 Inf4 N N Cl! Q fs. R p %P 00 0 vn er N p In �D m N o0 O [h �n 'n Q ry O1 �4 rn C7 O� cA •-• n ['N c0 wn N O y� .Y L rtl — .. D �O N N N 4 N r+i in n N ;a C a an n O ��G O M �P C7 •� rh cn P4 � O ea p (} CD GO n R r i r+7 N 0. rd N — F. Q N r'1 O+ CO 01 4 r1 C] C7 n N n h1 PG N In 0P DO C7 C~ N OK O (n In r•1 C M �O C] OO W n CONr•1 N et t 6 N 10 IG N ^ ^ p C � V G � E W a r7 6u7 7 G 6 'O G pC G w r 7yJ7 Ll. iV+ G GL � eq y V p Z% Cf 7 T y G P. v 7 7 K N c Vt 7 d U y N y .y. .�yi a ❑ V G !�J "O .N. rn fs T� `�? cd .N n a U v A F a0. IL '2 oc aE L u. U a Vca7 ua eE, Lax 0. a. 166- �n o0 a a a ^ In N v1 O R 00 9 ^ N 90 .1 G, + N O F C1 � v r o � 4 00 O N ■ a a .a N � 00 N v�oj W `%t�Y W Q G N 00 cc 4 � a � N+t Nzr T � 'o N ON T ^ ell o imcq ] v 00 r4 m °° N � -161- CD a N d 7 Y] cq en r4 ON N u �i `v c a v y a 9 7 p 9 Ll 4 V7 D =q ro r 7, rr3 V a tI� R. i7 Lz Cl. C,7 Vi tf7 p t7 -161-