HomeMy WebLinkAbout2020-COH - Comprehensive Annual Financial Report County of Hawaii
State of Hawaii
Comprehensive Annual Financial Report
For the Fiscal Year
July 1, 2019 to June 30, 2020
COMPREHENSIVE
ANNUAL FINANCIAL REPORT
Fiscal Year Ended June 30, 2020
Fiscal year ended June 30, 2020
County seal
COUNTY OF HAWAII
Hilo, Hawaii
Harry Kim
Mayor
Roy Takemoto
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, 2020
Table of Contents
Page
INTRODUCTORY SECTION
Letter of Transmittal 1
GFOA Certificate of Achievement 7
Organization Chart 8
List of Elected Officials 9
List of Principal Officials 10
FINANCIAL SECTION
Report of Independent Auditors 11
Management's Discussion and Analysis 14
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position 26
Statement of Activities 28
Fund Financial Statements:
Balance Sheet-Governmental Funds 30
Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Position 31
Statement of Revenues, Expenditures, and Changes in Fund Balances-
Governmental Funds 32
Reconciliation of the Change in Fund Balances of Governmental
Funds to the Statement of Activities 34
Statement of Revenues, Expenditures,and Changes in Fund Balance-
Budget and Actual (Budgetary Basis) - General Fund 36
Statement of Net Position-Proprietary Funds 40
Statement of Revenues,Expenses,and Changes in Fund Net Position-
Proprietary Funds 41
Statement of Cash Flows-Proprietary Funds 42
Statement of Fiduciary Net Position-Fiduciary Funds 43
Statement of Changes in Fiduciary Net Position-Fiduciary Funds 44
Notes to the Basic Financial Statements 45
Required Supplementary Information 103
FINANCIAL SECTION (Continued)
Page
Combining and Individual Nonmajor Fund Statements and Schedules:
Combining Balance Sheet-Nonmajor Governmental Funds 114
Combining Statement of Revenues, Expenditures, and Changes in Fund
Balances-Nonmajor Governmental Funds 118
Schedules of Revenues, Expenditures, and Changes in Fund Balances-
Budget and Actual (Budgetary Basis):
Highway Fund 121
Sewer Fund 122
Solid Waste Fund 123
Cemetery Fund 124
Parking Meter Fund 125
Vehicle Disposal Fund 126
Bikeway Fund 127
Workforce Investment Act Fund 128
Golf Course Fund 129
Geothermal Relocation and Community Benefits Fund 130
Beautification Fund 131
Hawaii County Housing Agency 132
Park Dedication Fund 133
Short-term Vacation Rental Enforcement Fund 134
General Excise Tax Fund 135
Combining Statement of Agency Funds Net Position-Agency Funds 136
Combining Statement of Changes in Assets and Liabilities-Agency Funds 138
Combining Statement of Private Purpose Trust Net Position- Private Purpose Trusts 144
Combining Statement of Changes in Net Position-Private Purpose Trusts 145
STATISTICAL SECTION
Table I -Net Position by Component 147
Table 2-Changes in Net Position 148
Table 3 -Fund Balances, Governmental Funds 150
Table 4-Changes in Fund Balance,Governmental Funds 151
Table 5 -Real Property Assessed Values by Classification and Tax Rates 152
Table 6-Principal Taxpayers 156
Table 7-Property Tax Levies and Collections 157
Table 8-Ratios of Outstanding Debt by Type 158
Table 9-Ratios of General Bonded Debt Outstanding 159
Table 10-Legal Debt Margin Information 160
Table I I -Demographic and Economic Statistics 161
Table 12-Principal Employers,County of Hawaii 162
Table 13 -Full-Time Equivalent County Government Employees by Function 163
Table 14-Operating Indicators by Function 164
Table 15 -Capital Asset Statistics by Functions 165
INTRODUCTORY SECTION
Mitchell D. Roth Deanna S. Sako
Mayor Director
Steven A. Hunt
Deputy Director
County of Hawaii
Finance Department
25 Aupuni Street, Suite 2103 Hilo, Hawaii 96720
(808) 961-8234 Fax (808)961-8569
December 30, 2020
The Honorable Mayor and Members of the Council
County of Hawaii
25 Aupuni Street
Hilo, Hawaii 96720
We transmit herewith the Comprehensive Annual Financial Report for the County of Hawaii,
State of Hawaii (the County), for the fiscal year July 1, 2019 to June 30, 2020.
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, 2020 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.
Hawaii County is an equal opportunity provider and employer.
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The County provides a full range of municipal services. These include police and fire protection;
emergency medical care; public prosecutor;culture and recreation; sanitation; social services;
water;planning and zoning; construction and maintenance of highways, streets and
infrastructure; real property assessment and tax collection; and general administrative services.
However,the County does not provide such other traditional services as public education,
hospitals and courts. These services are provided by the State government.
The County consists of the island of Hawaii, 4,028 square miles in size. It is twice as large as
the combined area of all the other inhabited islands in the Hawaiian Archipelago. Since there is
no other local or municipal government within the County, there are no overlapping taxes and no
overlapping debt. The County has an elected mayor and a nine-member council.
Economic Condition and Outlook
The island of Hawaii,commonly known as the Big Island, is located 214 miles from Honolulu,
the state capital; 2,200 miles from the west coast of the continental United States; and 4,000
miles from Japan. The city of Hilo on the east side of the island serves as the county seat as well
as the transportation and financial center for the Big Island. Hilo's infrastructure includes Hilo
Harbor, a deep-water port, and Hilo International Airport,which is capable of handling fully-
loaded wide-bodied aircraft. Kailua-Kona and South Kohala, major tourist destination areas on
the west side of the Big Island, are served by flights from the United States mainland, Canada
and now Japan through the Kona International Airport. Scheduled freight services are available
between the islands by air and sea transport. Communities on the island are linked by a network
of State and County maintained streets and highways.
The Big Island is the most diversified of the neighbor island economies. As a result it is buffered
to some extent when any one industry lags. Although the unemployment rate for the County for
the current fiscal year is at approximately 13.2 percent, it preliminarily decreased to 9.8 percent
as of November 2020, which is according to the State of Hawaii Department of Labor and
Industrial Relations Office of Labor and Statistics.
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.
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 lava, the island has remained
open for business.
Then as the County was beginning to recover, COVID-19 began to spread throughout the world
and on January 30, 2020 the World Health Organization declared a Public Health Emergency of
International Concern. The County, as well as the rest of our nation, was challenged to balance
decreasing revenues from all major sources with increasing expenditures incurred in response to
dealing with the public health crisis facing the community. In order to aid the state and local
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governments in their struggle, the federal government passed the Coronavirus Aid, Relief and
Economic Security Act ("CARES Act"), which awarded the County with $80 million to address
medical, public health, economic support and other emergency response costs resulting from
COVID-19.
Major Initiatives
For the Year
Public Safety—The Hawai'i Police Department faced significant challenges during fiscal year
2020,one of which was the COVID 19 pandemic, which brought about some unique challenges
and responsibilities for the police department.
The Hawaii Fire Department had a number of significant accomplishments throughout fiscal
year 2019-20. By hosting multiple overlapping recruit classes,the Department achieved nearly
full staffing for the first time in a number of years. From the onset of the COVID-19 pandemic,
the Hawaii Fire Department led the County's prevention and education task force, which
established and implemented safety protocols to keep the local businesses open, while
simultaneously reducing the COVID-19 risk to the community.
Public Works— With a project cost of $14 million, the Prosecuting Attorney's Office at the West
Hawaii Civic Center was completed. With the recent opening of the judiciary building in
Kailua-Kona, it was convenient to have the Prosecuting Attorney's office nearby to reduce the
traveling time.
The Highways division started the process of implementing Geographic Information Systems
(GIS)to improve data collection and workflow processes throughout operations. The program
integrates with public safety and civil defense departments, and provides for better overall
coordination between agencies.
Culture and Recreation —Parks and Recreation opened Kuawa Street park fields for use. The
park includes a baseball/softball and multipurpose field. The Department provided response to
the COVID-19 pandemic by developing policy and rules for safe facility use and the
development and implementation of modified programs, such as the emergency meal plan for
our elderly and Summer Fun programs for our youth.
For the Future
Public Safety—With the acquisition of equipment, the Police Department plans to implement the
Department's Body Worn Camera(BWC) program in the upcoming fiscal year FY 21. The
Department will continue to strive towards the construction of a combined Fire and Police
Dispatch Center, which is currently in the bid proposal phase.
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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 (DOT) 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
project is expected to be complete during the second quarter of 2021.
• Originally built in 1937, AIN Drive culvert is being demolished due to being structurally
deficient. The new properly-sized structure will provide a wider stream flow opening, a
longer span and wider lane bridge with wider shoulders for pedestrians and bicyclists while
reducing area flood hazards. With an estimated cost of$8.97 million, the new bridge will
feature two 16-foot wide travel lanes, two 7-foot wide sidewalks, and new guardrails.
Culture and Recreation -The Department will continue to provide emergency meals, modified
programs, recreational opportunities and continue the maintenance and sanitization operations,
while adhering to government proclamations and guidelines as the pandemic continues.
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.
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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.
Significant Accounting Policies
The County has implemented Governmental Accounting Standards Board Statement No. 14, The
Financial Reporting Entity (GASB Statement No. 14), Statement No. 39, Determining Whether
Certain Organizations Are Component Units (GASB Statement No. 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.
Financial Highlights
Total revenues increased by $68.0 million from the prior year, which was mostly due to property
taxes increasing by approximately $17.5 million. Most notably, there were increases in the value
of net taxable buildings of $1.0 billion, with the largest increase occurring in the residential class
of $832 million. Second, there was an increase of $23.0 million from the prior year in revenues
from the general excise tax surcharge. The surcharge was in effect for 12 months in the current
fiscal year as compared to only 6 months in the prior year and the rate also doubled in the last 6
months of the current fiscal year from 0.25% to 0.50%. With a 13.0 percent ($68.0 million)
increase in revenues that was offset by a 6.0 percen t($33.2 million) increase in expenses, the
County experienced an increase in net position of$23.0 million, which represented a 296.1%
($34.8 million) increase over the prior year's decrease in net position.
The County's net investment in capital assets increased by $25.5 million from the prior year,
which represented a 2.9 percent increase. New and continued construction projects in the areas
of highways and streets and sanitation accounted for the majority of the increase.
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Other Information
Independent Audit
The County Charter requires an annual audit by independent certified public accountants, N&K
CPAs Inc. was selected in accordance with the County Charter and the procurement provisions
of the Hawaii Revised Statutes (HRS) and Hawaii Administrative Rules (HAR) to perform the
audit.
Employee Union Contracts
County employees are members of eight different bargaining units, of which all have contracts
that expire on June 30, 2021.
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, 2019.
This was the thirty second 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
, 6 ,
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 Elided
June 30, 2019
Christopher P. Morrill
Executive Director/CEO
. 7 .
County of Hawaii
Organization Chart
County Electorate
County Council Mayor Prosecuting Attorney
County Clerk Legislative Auditor Office of Management: Managing Director
Departments under direct supervision of the Managing Director: Corporation Counsel Finance Planning
Environmental Management Research and Development Public Works Parks and Recreation Infomation Technology
Agencies under direct supervision of the Managing Director: Civil Defense Office of Agiing Mass Transit Office of Housing and Community Development
Departments under commissions and administrative supervision of the Mayor: Human Resources Police Liquor Control Fire Water Supply (semi-autonomous)
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County of Hawaii
Elected Officials
June 30, 2020
Administrative Officers (Term: 2016-2020)
Harry Kim Mayor
Mitchell Roth Prosecuting Attorney
County Council (Term: 2018-2020)
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
9
Principal Officials
June 30, 2020
County Clerk Jon Henricks
Legislative Auditor Bonnie Nims
Managing Director Roy Takemoto
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 Magna
Director of Liquor Control Gerald Takase
Mass Transit Administrator Brenda Carreira
Executive on Aging William Farr III
Administrator, Office of Housing and
Community Development Duane Hosaka
Director of Information Technology Julie Ung
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FINANCIAL SECTION
999 BISHOP STREET,SUITE 2200
HONOLULU,HAWAII 96813
N&K CPAs, Inc. Telephone (808) 524-2255 Fax (808) 523-2090
ACCOUNTANTS I CONSULTANTS
INDEPENDENT AUDITOR'S REPORT
To the Chair and Members of the County Council
County of Hawaii
Report on the Financial Statements
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 Hawai'i, State of Hawai'i (County), as of
and for the fiscal year ended June 30, 2020, 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 auditors
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 Hawai'i, State of Hawaii, as of June 30, 2020, 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 14 through 24), schedule of changes in the net
OPEB liability and related ratios (pages 103 through 105), schedule of contributions (OPEB)
(pages 106 through 108), schedule of the County's and Department's proportionate share of the
net pension liability (ERS) (page 109), schedule of the employer pension contributions (ERS)
(pages 110 through 111), and schedule of changes in total pension liability (page 112), 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
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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, 2020, 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.
N&K CPAs, Inc.
Honolulu, Hawai'i
December 30, 2020
13 -
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, 2020. We encourage readers to consider the information presented here in
conjunction with additional information that we have furnished in our letter of transmittal.
FINANCIAL HIGHLIGHTS
• The assets of the County exceeded its liabilities at the end of the fiscal year by $153.0 million
(net position). This amount includes a negative balance of $834.5 million in unrestricted net
position,a decrease of$13,6 million from the prior year,which is explained in the sections
below. This amounts also includes $206.9 million and $21.4 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 $251.0 million, an increase of $26.6 million from the prior year.
Approximately 40 percent of this total amount, $88.9 million, is available for spending at the
County's discretion (unrestricted fund balance).
• At the end of the current fiscal year, unrestricted fund balance for the general fund was $61.4
million, or 72 percent of total general fund expenditures.
OVERVIEW OF THE FINANCIAL STATEMENTS
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 user
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 families.
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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 County, 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 (1) how cash and other financial assets can readily be
converted to available resources and (2) the balances left at year-end that are available for
spending. Such information may be useful in determining what financial resources are
available in the near future to finance 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 Ouli Ekahi Affordable Housing Project.
- 15 -
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 fund financial statements,
Other Suyvlementary 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
nonmajor governmental funds and budgetary comparison schedules for the nonmajor special
revenue funds are presented immediately following the required supplementary information.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
Condensed Statement of Net Position
June 30,2020 and 2019
Primary Government —
Governmental Activities Business-type Activities Total
2020 2019 2020 2009
Assets:
Current and other assets $401,959,382 $351,300,809 $1,347,120 $1,300,216 $403,306,502 $352,601,025
Capital assets, net 1,360,608,411 1,328,138,639 1,917,893 1,365,55 41,362,526,304 1,329,504,193
Total assets 1,762,567,793 1,679,439,448 3,265,013 2,665,770 1,765,832,806 1,682,105,218
Deferred Outflows
Of Resources: 206,923,055* 213,039,853* 206,923,055 213,039,853
Total Assets and Deferred
Outflows of Resources 1,969490 48j 892,479301 3,265,013 2665,770 972 755,861 1,895,145,071
_ .....
Liabilities:
Long-term liabilities
outstanding 1,675,729,743 1,677,521,661 582,961 697,777 1,676,312,704 1,678,219,438
Other liabilities 121,977,885 69,882,208 69,134 83,015 122,047,019 69,965,223
Total liabilities 1,797,707,628 1,747,403,869 652,095 780,792 1,798,359,723 1,748,194,661
Deferred Inflows
Of Resources: 21,372,121 16,970,935 -- 21,372,121 16,970,935
Total Liabilities and
Deferred Inflows
Of Resources 1,819,079,749 1,764,374,804 652,095 780,792 1,819,731,844 1,765,155,596
Net position:
Net investment in
capital assets 891,782,081 866,986,564 1,334,932 667,777 893,117,013 867,654,341
Restricted 94,431,592 83,230,067 — 94,431,592 83,230,067
Unrestricted (835,802,574)* (822,112,134)* 1,277,986 1,217,201 (834,524,588) (820,894,933)
Total net position $1,894,978 $153,024,017
*See explanation on page 17.
- 16 -
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 County, assets exceeded liabilities by $153.0 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 in two of its
three categories of net position, both for the government as a whole, as well as for its separate
governmental activities. All three categories of net position are positive for its business-type
activities.
The County's net position increased by $23.0 million from the prior year,which was an increase
of $34.7 million (297%) from the decrease that was experienced last fiscal year. The main
reasons for the large increase in the current year's increase over last year's decrease, was due to
several increases in revenue sources. Property taxes increased in the current fiscal year by $17.5
million due to a $1.0 billion increase in the assessed value of the net taxable buildings. Revenues
from the general excise tax surcharge increased by $23.0 million from the prior year due to fact
that the surcharge was in effect for 12 months in the current fiscal year and also doubled in the
last 6 months.
The County's net capital assets increased by $33.0 million (2 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 24.
The County's long-term liabilities outstanding decreased by $1.9 million (0.1 percent) due
primarily to principal payments of bonds and SRF loans and amortization of related bond
premiums totaling $30.5 million that were offset by a $32.6 million increase in the County's net
pension liability. The remaining decrease in this category is comprised of net changes in the
other long-term liability balances,of which most notable is the $6.4 million increase in other
post-employment benefit obligation and a $17.6 million decrease in landfill closure payable due
to current year payments. See further discussion of the increase in long-term debt outstanding on
page 25.
- 17 -
Condensed Statements of Activities
For the Fiscal Years Ended June 30,2020 and 2019
Primary Government
Governmental Activities Business-type Activities- Total
2020 2019 2020 2019 2020 2019
Revenues:
Program revenues:
Charges for services $56,476,328 $55,359,674 $482,150 $510,352 $56,958,478 $ 55,870,026
Operating grants and contributions 75,553,629 64,285,842 269,273 261,848 75,822,902 64,547,690
Capital grants and contributions 43,498,993 28,375,566 43,498,993 28,375,566
General revenues:
Property taxes 333,515,661 315,969,118 - 333,515,661 315,969,118
Other taxes 73,873,234 47,796,847 - 73,873,234 47,796,847
Grants and contributions,unrestricted 16,530,357 19,748,211 - - 16,530,357 19,748,211
Investment earnings 3,220,862 3,420,693 5,193 8,234 3,226,055 3,428,927
Other 2,127,119 1,848,245 - - 2.127,119 1,848,245
Transfers (616,776) - 616,776
Total revenues and transfers 604,179,407 536,804,196 1,373,392 780,434 605,552,799 537,584,630
Expenses:
General government 86,747,456 88,660,088 86,747,456 88,660,088
Public safety 274,259,439 248,111,465 - 274,259,439 248,111,465
Highways and streets 67,161,387 62,066,700 - - 67,161,387 62,066,700
Health,education and welfare 37,042,326 37,919,675 645,452 609,486 37,687,778 38,529,161
Culture and recreation 33,613,224 35,908,061 - 33,613,224 35,908,061
Sanitation 68,870,497 62,775,074 68,870,497 62,775,074
Interest on long-term debt 14,178,476 13,277,652 14,178,476 13,277,652
Total expenses 581,872,803 548,7 18,715 64_3,452 -609,486 582,518,257 549,328,201
Increase(Decrease)in net position 22,306,602 (11,914,519) 727,940 170,948 23,034,542 (11,743,571)
Net position at beginning of year 128,104,497 140,019,016 1,884,978 1,714,030 129,989,475 141,733,046
Net position at end of year $ 150,411,099 $128,104,497 $ 2,612,918 $ 1,884,978 $153,024,017 $ 129,989,475
Analysis of Changes in Net Position
Governmental activities. Governmental activities increased the County's net position by $223
million, which represented all of the total decrease in net position of the County.
The primary reasons for the $68.0 million (13 percent) increase in total revenues was due to a
$1.0 billion increase in the assessed value of the net taxable buildings, with the most notable
increase of $832 million occurring in the residential class. With no changes in the tax rates from
the prior year,the increase in real property tax revenues of $17.5 million was attributable solely
to increases in the assessed values of land and buildings. Revenues from the general excise tax
surcharge increased by $23.0 million from the prior year due to fact that the surcharge was in
effect for 12 months in the current fiscal year and also doubled in the last 6 months from 0.25% to
0.50%.
Total expenses increased by $33.2 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, including approximately $3.0 million of
expenditures incurred by the County in responding to the COVID-19 pandemic.
- 19
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 (47 percent),
followed by general government (15 percent) and sanitation (12 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 (55 percent), followed by operating grants
and contributions (12 percent) and other taxes (12 percent).
Expenses and Program Revenues—Governmental Activities
Year Ended June 30, 2020
$300,000,000
$250,000,000
Expenses Program revenues
$200,000,000
$150,000,000
$100,000,000
$50,000.1000
Revenue by Source—Governmental Activities
Year Ended June 30, 2020
other $2,127,119
Charges for services $56,476,328
operating grants and contributions $75,553,629
Capital grants and contributions $43,498,993
Property taxes $333,515,661
Other taxes, $73,873,234
Grants and contributions not restricted to spedfic programs $16,530,357
Investment earnings $3,220,862
- 19 -
Business-type activities. Business-type activities increased the County's net position by
$727,940 versus an increase of $170,948 in the prior year. Expenses for health, education and
welfare account for all of the $645,452 of expenses which represents a 6 percent increase from
the prior year,due to increases in repairs and maintenance and administrative charges. Charges
for services were $482,150 and operating grants and contributions were $269,273, which were
comparable to the prior year.
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 $251.0 million, an increase of $26.6 million (12 percent) in comparison
with prior year. Approximately 35 percent of this total amount ($88.9 million) constitutes
unrestricted fund balance. The unrestricted portion of the fund balance is comprised of (1) $60.5
million in committed fund balance, (2) $46.0 million in assigned fund balance,and (3) negative
$17.6 million in unassigned fund balance.The remainder of the fund balance is divided between
$8.2 million in nonspendable fund balance for inventory and $154.0 million in restricted fund
balance. Approximately 74 percent of the total restricted fund balance is due to restrictions
relating to highways, streets and abandoned vehicles ($75.7 million) and debt service ($38.8
million). $15.5 million of the fund balance restricted for highways, streets and abandoned
vehicles was due to the General Excise Tax fund that was created in the prior year,which
accounts for the general excise tax surcharge that became effective in fiscal year 2019. The fund
balance of the General Excise Tax Fund increased by $9.5 million due to the fact that the
surcharge was in effect for a full 12 months in fiscal year 2020 and doubled during the last 6
months.
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 $61.4 million,while total fund balance
increased to $84.9 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 17 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 $8.7 million during the current fiscal
year as compared to an increase of $15.1 million in the prior year. Key factors in this decrease
($6.4 million) over last year's increase are as follows:
• A positive increase of $14.3 million (5 percent) in real property tax revenues and $9.2 million
(15 percent) in intergovernmentai revenues. As explained previously,the increase in real
property tax revenues is due to an increase (5%) in the value of net taxable real property as
evidenced in the accompanying statistical tables. $5.1 million was also received from the
State to reimburse the County for costs incurred in connection with the situation on Mauna
Kea.
- 20 -
The positive impact of the increase in revenues was offset by increases of $33.6 million (10
percent) in expenditures. $6.8 million of the total increase in expenditures is due to increases
in salaries and wages from the prior year and $7.9 million in associated employee and retiree
benefits. The County also faced the continuation of funding costs related to emergency
protective measures resulting from the COVID-19 pandemic as opposed to the lava eruption
and hurricanes in the prior years.
The fund balance of the County's capital projects fund decreased by $5.3 million (10 percent)
during the current fiscal year. The decrease is primarily due to an increase of $21.8 million in
expenditures from the prior year. See discussion regarding construction activity during the
current year in the capital asset section below. The increase in expenditures were offset by an
other financing source of $30.3 million related to the bond anticipation notes (BANs) that were
issued in the prior year and considered a current liability because the legal steps regarding the
issuance of the bonds to pay off these notes were not completed at the time the audited financial
statements were issued. The legal steps will be completed prior to the issuance of this year's
financials. There was also an increase in transfers in from the General Excise Tax (GET) fund of
$8.6 million as a direct result of increases to the surcharge revenue in the GET fund.
The debt service funds consist of the Bond Redemption Fund and the Interest Fund. These funds
have combined total fund balances of $38.8 million, all of which is restricted for the payment of
debt service. The net increase in the combined fund balances during the current year in the debt
service funds was $5.6 million, which was a 17 percent change from the prior year and due to an
increase of transfers in of $3.8 million.
Proprietaryfunds. 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 $668,562, and $609,424 for the Ouli Ekahi Affordable Housing Project (Ouli
Ekahi). The total net position for Kulaimano increased by $130,526 and the net position for Ouli
Ekahi increased by $597,414. 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 $42.1 million increase in appropriations,the most significant reasons were due to $16.9
million in increases in the grant appropriations from the State relating to the County's response to
the situation at Mauna Kea and relating to the County's share of the State's allocation of federal
funds received under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Differences between the final budget and the actual (budgetary basis) resulted in approximately
$18.8 million less revenues than expected and $27,1 million less expenditures than appropriated.
This is primarily due to the following factors:
The negative variance of $18.8 million in revenues is comprised mostly of $11.8 million from
intergovernmental revenues, of which $3.2 million was unrecognized in the General Fund
relating to the State's Transient Accommodations Tax (TAT) grant and $3.7 million from
various federal capital grants related to Section 5309.
- 21 -
• $13.4 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. The
following functions are responsible for the majority of the variance: public safety ($8.3
million)and general government ($3.4 million).
• $7.2 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.
• $2.8 million is due to the fact that the increase in health premiums for employees were lower
than originally anticipated.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital assets. The County's investment in capital assets for its governmental and business-type
activities as of June 30,2020 amounts to$1.4 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 2
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 $6.1 million with $2.6 million
coming from the current fiscal year.
• Construction continued on the Mdmalahoa Highway Widening;construction in progress as of
the end of the current fiscal year had reached $13.9 million with $5.9 million coming from
the current fiscal year.
• Construction continued on the Office of the Prosecuting Attorney; construction in progress as
of the end of the current fiscal year had reached $14.5 million with $7.4 million coming from
the current fiscal year.
• Construction continued on the Hawaii County Radio System 1Jpgrade project;construction
in progress as of the current fiscal year had reached $12.9 million with $0.8 million coming
from the current fiscal year.
• Construction continued on the Hawaiian Ocean View Estates Transfer Station; constructions
in progress as of the end of the current fiscal year had reached $2.1 million with $1.9 million
coming from the current fiscal year; project was transferred to Buildings.
• 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 $6.9 million, with
$2.4 million coming from the current fiscal year.
• Construction continued on the Lona Kona Subdivision Sewer Improvements project;
construction in progress as of the end of the current fiscal year had reached $8.4 million with
$7.1 million coming from the current fiscal year; project was transferred to Buildings.
• $20.7 million of dedicated roads were received by the County in the current fiscal year.
- 22 -
Capita Assets
(net of depreciation)
June 30, 2020 and 2019
Primary Government
Governmental Activities Business-type Activities Total
2020 2019 2020 2019 2020 2019
Land and improvements $ 278,888,359 $263,470,318 $753,877 $753,877 $ 279,642,236 $264,224,195
Infrastructure assets 296,257,213 312,878,757 - - 296,257,213 312,878,757
Ground and site improvements - - 44,852 49,199 44,852 49,199
Buildings and improvements 635,602,987 627,746,572 1,032,447 538,410 636,635,434 628,284,992
Easements 11,116,725 6,250,078 - - 11,116,725 6,250,078
Equipment 58,412,276 59,337,103 86,717 24,068 58,498,993 59,361,171
Construction work in progress 80,330,851 58,455,811 - - 80,330,851 58,455,811
Total $1,360,608,411 $1,328,139,639 $1,917,893 $1,365,554 $1,362,526,304 $1,3290504,193
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 $359,2 million, State
Revolving Fund loans of $37.4 million and Bond Anticipation Notes of $30.0 million. At the end
of the current fiscal year, the County had total bonded debt outstanding of $359.2 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 $23.2 million (6 percent) during the current fiscal
year due to the retirement of that amount of bonds.
At the end of the fiscal year,the County held an "AA" rating from Standard & Poor's, an "AA+"
rating from Fitch and an"Aa2"rating from Moody's for general obligation 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 on the last
tax assessment rolls. The current debt limitation for the County is $5.0 billion, which is in excess
of the County's outstanding general obligation debt. Currently the County's outstanding debt
represents 6 percent of our debt limitation.
Additional information on 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 13.2
percent,which is 9 percent higher than at the end of the prior fiscal year. This increase is
a result of the current COVID-19 pandemic that is plaguing the world.
The number of domestic and international visitors to the County for the current fiscal
year was approximately 1.29 million,with an approximately 23 percent decrease from the
previous year's count of 1.67 million.
- 23 -
With the COVID-19 pandemic plaguing not only our nation but the entire world,the
County is preparing to deal with the fiscal and economic impact that will continue to
impact our island beyond the upcoming fiscal year of 2021. Concerns in the area of
increasing unemployment, ability of businesses to continue to operate, fulfilling the basic
needs of the island citizens and working to protect the population will impact the budget.
The County administration will continue to monitor the effects of the pandemic and plan
accordingly to prepare for the tough decisions that will need to be made regarding the
health and safety of the people.
These factors were considered in preparing the County's budget for the 2021 fiscal year.
At the end of the current fiscal year,unrestricted fund balance in the general fund was $61.4
million. The County has appropriated $30.5 million of this amount for spending in the 2021
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 Aupuni Street, Suite 2103, Hilo, Hawaii 96720.
- 24 -
BASIC FINANCIAL STATEMENTS
COUNTY OF HAWAII
Statement of Net Position
June 30, 2020
Primary Government
Governmental Business-type Component
Activities Activities Total Unit
...........................
Assets
Current assets:
Cash and cash equivalents (notes 3 and 14) $118,630,879 $1,222,541 $119,853,420 $19,663,115
Restricted cash and cash equivalents (note 3) 115,097,008 42,988 115,139,996
Investments (note 3) 28,245,013 28,245,013 7,000,000
Restricted investments (note 3) 31,185,737 31,185,737 -
Receivables, net (note 4) 83,047,819 10,771 83,058,590 8,525,253
Receivable from improvement district
(notes 4 and 10) 112,317 112,317 -
Intemal balances (note 5) 4,000 (4,000) - -
Inventories 8,187,482 - 8,187,482 1,537,355
Prepaid expenses 49,343 2,133 51,476 45,116
Other 1,541,638 1,541,638 -
Total current assets 386,101 236 1,274,433 387,375,669 36,770,839
Investments (note 3) 14,083,348 - 14,083,348 15,000,000
Restricted cash and cash equivalents (note 3 and 14) - 72,687 72,687 888,225
Receivable from improvement district,excluding
current portion (notes 4 and 10) 1,774,798 - 1,774,798 -
Capital assets (note 6, 8 and 14):
Utility plant in service, net - 239,507,889
Infrastructure assets, net 296,257,213 - 296,257,213
Ground and site improvements, net - 44,852 44,852
Buildings and improvements, net 635,602,987 1,032,447 636,635,434
Equipment, net 58,412,276 86,717 58,498,993
Easements, net 11,116,725 - 11,116,725 -
Preliminary survey and investigation charges - - 6,417,849
Land and improvements 278,888,359 753,877 279,642,236 5,261,319
Construction work in progress 80,330,851 80,330,851 50,320,130
Total capital assets, net 1,360,608,411 1,917,893 1,362,526,304 301,507,187
Total noncurrent assets 1,376,466,557 1,990,580 1,378,457,137 317,395,412
-------------- ------ -------- ---------------___
Total assets 1,762,567,793 3,265,013 1,765.832.806 354,166,251
Deferred Outflows of Resources
Deferred loss on refunding 5,291,893 5,291,893
Deferred outflow related to pensions and other
post employment benefits (notes 13 and 14) 201,631,162 201,631,162 10,093,069
Total deferred outflows of resources 206,923,055 206,923,055 10,093,069
Total Assets and Deferred Outflows of Resources 1,969,490,848 3,265,013 1,972,755,861 364,259,320
(Continued)
26
COUNTY OF HAWAII
Statement of Net Position
June 30, 2020
(Concluded)
Primary Government
Governmental Business-type Component
Activities Activities Total Unit
.................................
Liabilities
Current liabilities:
Accounts payable and accrued liabilities $ 20,780,557 $59,765 $20,840,322 $ 6,033,555
Accrued payroll 11,388,603 - 11,388,603 1,740,978
Advance collections-intergovernmental 79,615,161 1,809 79,616,970
Interest due on long-term debt 6,176,903 7,560 6,184.463 545.682,
Bonds and loans payable,current portion net
(notes 10 and 14) 62,144,108 86,452 62,230,560 5,828,067
Compensated absences,current portion (note 10) 10,950,611 10,950,611 524,869
Claims andjudgments,current portion
(notes 10, 12 and 14) 4,375,447 4,375,447 147,642
Capital leases,current portion (notes 8 and 10) 3,665,315 3,665,315 -
Landfill costs payable ,current portion
(notes 9 and 10) 1,505,257 1,505,257
Customers' deposits - 230,525
Other 7,398,010 - 7,398,010
------------- .................................................
Total current liabilities 207,999,972 155,586 208,155,558 15,051,318
Noncurrent liabilities:
Bonds and loans payable, net
(notes 10 and 14) 417,662,152 496,509 418.158,661 60,605,626
Compensated absences (note 10) 34,542,088 - 34,542,088 1,285,023
Claims and judgments (notes 10, 12 and 14) 23,433,979 23,433,979 512,358
Capital leases(notes 8 and 10) 7,105,794 7,105,794 -
Landfill
LandfilI costs payable (notes 9 and 10) 11,849,743 11,849,743
Unearned revenue, noncurrent - 1,583,953
Customers'deposits - 15,865,108
Net pension liability (notes 13 and 14) 669,239,185 669,239,185 32,029,248
Net OPER liability (notes 13 and 14) 407,266,249 407,266,249 16,079,747
Other 18,608,466 18,608,466 -
................ .... .................................
Total noncurrent liabilities 1,589,707,656 496,509 1,590,204,165 127,961,063
.......... .....
Total liabilities 1,797,707,628 652,095 1,798,359,723 143,012,381
.................................... .............................. .. ...............____............................
Deferred Inflows of Resources
Deferred inflows related to pensions and other
post employment benefits (notes 13 and 14) 19,305,022 19,305,022 3,848,277
Deferred inflows-other 2,067,099 2,067,099 62,849
-
Total Deferred lnflows of Resources 21,372,121 21,372,121 3,911,126
Total Liabilities and Deferred
Inflows of Resources 1,819,079,749 652,095 1,819,731,844 146,923,507
Net Position
Net investment in capital assets 891,782,081 1,334,932 893,117,013 235,961,719
Restricted for:
Debt service (note 10) 38,846,557 38,846,557 -
Highways, streets and abandoned vehicles 36,899,769 36,899,769
Public access open space 14,341,394 14,341,394
Other 4,343,872 4,343,872
Unrestricted (835,802,574) 1,277,986 (834,524,588) (18,625,906)
Total net position $ 150,411,099 $2,612,918 $153,024,017 $217,335,813
See accomrian ing notes to the basic financial statements
.27 .
COUNTY OF HAWAII
Statement of Activities
For the Fiscal Year Ended June 30,2020
Program Revenues
Functions/Programs Expense Charges for services Operating Grants and Contributions Capital Grants and Contributions
Primary government:
Governmental activities:
General government $ 86,747,456 $ 4,320,738 $ 6,638,918 $ 4,398,247
Public safety 274,259,439 5,917,482 35,447,400 2,264,898
Highways and streets 67,161,387 16,585,633 6,789,686 35,949,579
Health, education and welfare 37,042,326 2,522,672 25,885,494 224,641
Culture and recreation 33,613,224 1,451,429 26,029 661,628
Sanitation 68,870,497 25,678,374 766,102
Interest on long-term debt 14,178,476 -
................................................
Total governmental activities 581,872,805 56,476,328 75,553,629 43,498,993
Business-type activities:
Health, education and welfare 645,452 482,150 269,273
Total primary government $ 582,518,257 $ 56,958,478 $ 75,822,902 $ 43,498,993
Component unit:
Water (note 14) $ 60,324,787 $ 49,753,448 $ $ 3,202,379
General revenues:
Taxes:
Property taxes, levied for general purposes
Public service company taxes
Franchise taxes
Fuel taxes
General excise tax surcharge
Grants and contributions not restricted to specific programs
Investment earnings (expense)
Miscellaneous
Transfers
Total general revenues and transfers
Change in net position
Net position, beginning of year
Net position, end of year
See accompanying notes to the basic financial statements,
28 .
Net (Expense) Revenue and Changes in Net Position
Primary Government
Governmental Activities Business-type Activities Total Component Unit
$ (71,389,553) $ $(71,389,553) $
(230,629,659) - (230,629,659)
(7,836,489) - (7,836,489)
(8,409,519) - (8,409,519)
(31,474,138) (31,474,138)
(42,426,021) (42,426,021)
(14,178,476) - 14,178,476
(406,343,855) (406,343,855)
105,971 105,971
(406,343,855) 105,971 (406,237,884
S7,368,960
333,515,661 333,515,661
8,862,416 8,862,416
9,364,811 9,364,811
20,108,062 20,108,062
35,537,945 35,537,945
16,530,357 16,530,357 -
3,220,862 5,193 3,226,055 775,456
2,127,119 - 2,127,119 -
(616,776) 616,776 - -
428,650,457 621,969 429,272,426 775,456
22,306,602 727,940 23,034,542 (6,593,504)
128,104,497 1,884,978 129,989,475 223,929,317
$ 150,411,099 $ 2,612,918 $153,024,017 217,335 813
- 29-
COUNTY OFHAWAII
Governmental Funds
Balance Sheet
June 30, 2O2O
General Capital Projects Other Government funds Total Governmental Funds
Assets
Cash and cash equivalents (note 3) $102,634,030 $51,948,355 $79,545,502 $233,727,087
Investments (note 3) 42,315,624 - 31,198,474 73,514,090
Receivables, net (note 4) 28,435,750 - 2,014,255 31,058,005
Due from other governmental funds (note 5) 2,175.623 6,723,688 2,418,607 11,317,918
Due from other nongovernmental funds (note 5) - - 4,000 4,000
Receivables from other governments (note 4) 26,460,253 6,842,866 18,894,695 51,991,814
Inventories 8,187,482 - - 8,187,482
Other 635,8997 797,666 157,416 1,590,981
Total assets $210,844,661 $65,912,575 $134,63194 $411,390,185
Liabilities, Deferred Inflows and Fund Balances
Liabilities:
Accounts payable $6,245,867 $10,577,451 $3,957,239 $20,780,557
Accrued payroll 5,608,455 - 1,780,148 11,388,603
Due mother governmental funds (note 5) 2,192.921 595,690 8,529,307 11,317,918
Advance collections-intergovernmental 74.474.520 4,548,959 591,682 79,615,161
Other
Total liabilities $95,482,744 16,101,475 15,534,681 127,118,900
Deferred Inflows of Resources:
Unavailable revenue (note 7) 30,502,84 2,729,436 33,232,285
Fund balances:
Nonmpcndub|u: Inventory 8,187,482 - - 8,187,482
Restricted for:
Debt service (note 10) - - 38,846,557 38,846,557
Highways.streets and abandoned vehicles - 38,770,075 36,899,769 75,669,844
Public access open space 14,341,394 - - 14,341,394
Other 956,286 21,771,160 3,307,586 25,115,082
Committed to:
Budget stabilization 7,212,348 - - 7,212.340
Disaster and emergencies 6,534,823 - - 6,534,823
Lower Puna area - - 4,274,235 4,274,235
Rental assistance and subsidy - - 1,267,826 1,267,826
Sanitation - - 20,286,433 20,286,433
Self Insurnance 280,890 - - 260,890
Highways, streets and abandoned vehicles - 1,054,149 11,866,016 12,120,105
Parks and recreational projects - 2,091,494 61,068 7,152,662
Zoning change impact mitigation (fair share) - 3,960,058 - 3,960,050
Other 510,163 1,636,871 279,342 1426,376
Assigned to:
Subsequent year's budget 30,548,282 - - 30,548,182
Other 15,444,635 - - 15,444,635
Unassigned 862,773 (18,472,707) - (17,609,934)
Total fund balances 84,859,068 49,811,100 116,368,832 251,039,000
Total liabilities.deferred inflows, and fund balances $210,844,661 $65,912,575 $134,632.949 $411,390,185
See accompanying notes to the basic financial statements.
.30~
COUNTY OF HAWAII
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position
June 30, 2020
Total fund balances-governmental funds $ 251,039,000
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 278,888,359
Infrastructure assets,net 296,257,213
Buildings and improvements,net 635,602,987
Equipment, net 58,412,276
Easements, net 11,116,725
Construction work in progress 80,330 851
Total capital assets, net 1,360,608,411
Deferred amounts on refunding and pension are reported as deferred
outflows of resources in the government-wide financial statements but are not
are not reported in the governmental fund statements 206,923,055
Some of the County's revenues will be collected after year-end but are
not available soon enough to pay for the current period's expenditures
and therefore are deferred (unearned) in the funds. (note 7) 31,165,186
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 (477,919,145)
Interest due on long-term debt (6,176,903)
Capital leases (10,771,109)
Compensated absences (45,492,699)
Claims and judgments (27,809,426)
Landfill costs payable (13,355,000)
Pollution remediation (19,341,349)
Underground storage tank liability (1,775,000)
Other Postemployment Benefit Obligation (OPER) (407,266,249)
Net pension obligation (669,239,185)
Total long-term liabilities (1,679,146,065)
Unamortized gain on refunding (873,466)
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 (19,305,022)
Net position of governmental activities $ 150,411,099
See accompanying notes to the basic financial statements.
. 31 -
COUNTY OF HAWAII
Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Fiscal Year Ended June 30, 2020
General Capital Projects Other Governmental Funds Total Governmental Funds
Revenues
Property taxes $327,886,496 $ - $ 327,886,496
Public service company taxes 8,862,416 - - 8,862,416
Fuel taxes - - 20,108,062 20,108,062
Public utility franchise taxes - - 9,364,811 9,364,811
Licenses and permits 8,709,346 - 16,445l710 25,155,056
General excise tax surcharge - ' 35,537,945 35,537,945
Intergovernmental 69,657,109 10,280,246 35,694,656 113,632,011
Charges for services 5,771,752 - 24,307,960 30,079,712
Investment earnings 3,414.245 12,052 54,843 3,481,140
Other 1,979,081 1,161,721, 1,033,028 4,17,871
Total revenue 426,280,445 19,454,060 132,547,015 578,281,520
------------
Expenditures
Current:
General government 46,746,254 - 636,800 47,383,054
Public safety 144,581,068 - 10,339,473 154,920,541
H|ghways and streets 4,398,831 - 23,563,514 27,962,345
Health, education and welfare 7,808,415 - 23,134,152 30,942,567
Culture and recreation 21,365,678 - 1,167,748 22,533,426
Sanitation 1,150,508 - 42,607,378 43,757,963
Pension and retirement
contributions (note 13) 53,800,205 - 8,012,517 61,812,722
Employees' health insurance 15,768,173 - 3,078,292 18,846,485
Other post employment benefits 41,804,474 - ' 41,604,474
Other 6,759,950 - 1,981,836 8,741,786
Debt service:
Principal 1,526,641 - 27,695,216 29,221,857
Interest 87,597 - 18,501,939 18,589.536
Capital outlay 8,178,884 71,357,563 79,536,477
Total expenditures 353,776,755 71,357,563 160,718,865 585,853,183
Excess (deficiency) of revenues
over (under) expenditures 72,503.690 (51,903,503) (28,171,850) (7,571,663)
(Continued)
-32-
COUNTY OFHAWAII
Governmental Funds
Statement of Revenues, Expenditures and Changes ln Fund Balances
For the Fiscal Year Ended June 30, 2020
(Concluded)
General Capital Projects Other Governmental Funds Other Governmental Funds
Other Financing Sources (Uses)
Sale of assets $ 10,280 $ 10,288
Increase iocapital leases (notes 8 and 10) 1,502,463 - 1,318,960 2,821,423
State Revolving Fund loans (note 10) - 174,021 - 174,021
Reclassoydebt from current to
long-term - 30,270,868 30,278,868
Transfers in (note 1) - 16,119,391 74,079,574 90,198,965
Transfers out (note 5) (66,235,767) - (23,963,198) (90,198,965)
Total other financing sources (64,723,016) 46,572,280 51,435,336 33,284,600
Net change infund balances 7,788,674 (5,331,223) 23,261,486 25,712,937
Fund balances a (beginning of year 70,188,742 55,142,323 93,105,346 224,436,411
Increase in reserve for inventories 889,652 116,368,832 251,039,000
Fund balances at end of year $84,859,068 $49,811,100 $116,368,832 $251,039,000
See accompanying notes to the basic financial statements.
. 33~
COUNTY OF HAWAII
Reconciliation of the Change in Fund Balances of Governmental Funds
to the Statement of Activities
For the Fiscal Year Ended June 30, 2020
Net change in fund balances-total governmental funds $ 25,712,937
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 of activities, the cost of capital assets is
allocated over their estimated useful lives as depreciation expense. In
the current period, these amounts are:
Capital outlay 59,865,516
Dedicated and contributed property 21,564,947
Depreciation expense and loss on disposals (48,960,691)
Excess of capital outlay over depreciation expense 32,469,772
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:
Reclass of notes payable to long-term debt (note 10) (30,000,000)
State Revolving Fund loans (174,021)
Capital leases (2,821,423)
Total debt proceeds (32,995,444)
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 23,092,308
State Revolving Fund loan repayments/forgiveness 2,499,903
Capital lease payments 3,629,646
Total long-term debt repayment 29,221,857
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 "deferred" in the governmental funds. Unearned revenues increased by
this amount this year. 1,994,423
(Continued)
-34-
COUNTY OF HAWAII
Reconciliation of the Change in Fund Balances of Governmental Funds
to the Statement of Activities
For the Fiscal Year Ended June 30, 2020
(Concluded)
Some items reported in the statement of activities do not involve current
financial resources and therefore are not reported as expenditures in
governmental funds. These activities are:
Increase in inventories 889,652
Increase in compensated absences (3,079,986)
Decrease in claims and judgments 3,675,057
Decrease in landfill closure/postclosure care costs 17,660,000
Increase in pollution remediation costs (6,900,616)
Increase in underground storage tank liability (1,775,000)
Amortization of premium from bond issuance 4,800,919
Amortization of deferred loss on refunding (705,654)
Amortization of gain on refunding 102,761
Net increase in accrued interest (65,834)
Net decrease to expense, related to Other Postemployment
Benefit Obligation 8,196,912
Net increase to expenses related to pension and salaries and wages (56,895,154)
Net additional expenses (34,096,943)
Change in net position of governmental activities $22,306,602
See accompanying notes to the basic financial statements.
.35-
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, 2020
Original Budget Final Budget Actual (Budgetary Basis) Positive Variance (Negative)
Revenues:
Taxes and assessments:
Property taxes $330,700,000 $330,700,000 $327,886,496 $(2,813,504)
Public service company taxes 8,840,000 8,840,000 8,862,416 22,416
Total taxes and assessments 339,540,000 339,540,000 336,748,912 (2,791,088)
Licenses and permits:
Nonbusiness licenses and permits 4,321,305 4,321,305 3,864,032 (457,273)
Business licenses 2,095,329 2,045,339 1,788,744 (306,585)
Street use 3,064,450 3,064,450 3,056.570 (7,800)
Total licenses and permits 9,481,084 9,481,084 8,709,346 (771,738)
Intergovernmental:
Federal:
Programs for the aged 2,629,032 2,649,032 2,622,502 (26,530)
Community development block grants - 2,773,130 2,773,136 -
Law enforcement 3,420,535 5,451,959 3,738,790 (1,713,169)
Other
Total federal 11,277,229 43,184,146 37,496,079 (5,688,067)
State:
State General Fund - Act 185,
SLH 1990 10,158,000 19,158,000 15,965,000 (3,193,000)
Emergency medical services 16,830,274 20,000,957 20,800,957 -
Other 8,753,365 14,601,315 11,653,242 (2,948,073)
Total State 44,741,639 54,560,272 48,419,199 (6,141,073)
Total intergovernmental revenue 56,018,868
Charges for services:
General government 5,090.354 5,090354 4,111,410 (978,944)
Culture and recreation 1,826,600 1,826,600 857,530 (969,070)
Highways and streets 1,212,000 1,212,000 912.874 (299,126)
Public safety
Total charges for services 8,240,722 8,240,722 5,966,410 (2,24,312)
Fines and forfeitures 2,310,300 2,310,300 736,782 (1,573,518)
Rents 189,500 189,500 201,281 11,781
(Continued)
~36-
COUNTY QFHAWAII
General Fund
Statement of Revenues, Expenditures and Changes in Fund Balance-
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2020
Original Budget Final Budget Actual (Budgetary Basis) Variance Positive (Negative)
Revenues (continued):
Interest and penalties
Miscellaneous
Total revenues
Expenditures:
Current:
General government:
Finance 21,753,329 13,440,807 10,947,086 2,499,801
General government building 5,740,454 6,792,505 6,194,027 598,478
Legislative 4,679,768 3,835,666 3,368.266 467,400
Automotive equipment 4,844,900 3,943,850 3,775,449 168,351
Law 3,168,392 3,119,892 2,583,480 536,412
Research and development 2,768,086 2,949,786 2,566,838 382,948
Planning and zoning 4.204,467 4,320,287 4,024,717 295,570
Mayor's office 1,806,787 1,906,707 1,740,796 185,911
Engineering 1,779,186 1,603,186 1,141,715 460,471
Information technology 3,413,388 3,425388 2,740488 684,908
Human resources 2,229,159 2,232,234 1,697,250 534,484
Public works administration 1,596,193 1,616,443 1,444,937 171,506
Elections 980,672 1,174,860 927,959 246,901
Legislative auditor 875,846 875,846 629,562 246,284
total general government 59,845,145 51,236,537 43,782,612 7,453,925
Public safety:
Police department 70,068,586 73,289,204 68,005,101 5,184,103
Fire department 43,781,397 53,627,243 80,193,520 3,433,723
Prosecuting attorney 10,830,841 12,360,437 9,884,982 2,473,455
Protective inspection 4,177,497 4,234,747 3,727,510 507,237
Liquor control 2,044,329 2,249,709 1,832,360 417,343
Flood control 330,000 330,000 324,840 5,160
Civil defense agency 2,401,659 2,656,910 2,899,210 557,700
Disaster Response - 18,896,732 15,458,424 1,438,308
Animal control
2,185,706 2,185,706 2,081,627 104,079
Total public safety 135,829,935 167,838,688 153,617,580 14,221,108
Highways and streets
Mass transit 3,358,000 17,092,500 13,421,422 3,671.078
(Continued)
37
COUNTY OFHAWAII
General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balance-
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2020
Original Budget Final Budget Actual (Budetary Basis) Variance Positive (Negatively)
Expenditures (continued):
Current (continued):
Health, education and welfare
Elderly activities $5,008,686 $5,830,586 $3,994,505 $1,036,081
Office of aging 4,101,071 4,126714 3,591,532 535,182
Education 58,500 58,500 32,511 25,989
Social programs 1,500,000 1,500,000 1,499,945 55
Ccmwchca 420,087 440,687 394,995 45,692
Physical examination 133,825 133,825 133,825 -
Total health, education and welfare 11,222,369 11,290,312 9,647,313 1,642,99
Culture and recreation:
Community music 273,536 301,005 235,050 65,947
Organized recreation:
Maintenance 10,773,178 11,112,978 10,573,079 539,899
Recreation 3,284,584 3,399,634 3,028,018 371,816
Aquatics 2,563,447 2.427,297 2,052,276 375,821
Hou|u|upark complex 1,008,526 1,049,526 1,005,124 44,402
Administration 2,337,703 2.420,441 2.076461 344,980
Children's zoo 810,740 827,740 809,314 18,426
Summer / Intersession 532,093 538,093 331,521 206,572
Culture and arts 301,143 908.643 227,663 80,980
Elderly activities administration 662,154 668,844 559,798 109,106
Total culture and recreation
Sanitation:
Environmental management 1,182,880 1,197,880 1,153,224 2,161,949
Pension and retirement contributions 60,811,132 61,3234 53,5637 8,270,507
Employees' health insurance 18,495,526 18,495,536 15,731,805 2,763,721
Other postemployment benefits 41,676,474 41,676,474 41,604,474 72,000
Other 11,262,824 9,737,238 4,335,260 5,401,978
Total current 366,233,189 403,58,090 357,754,169 45,703,921
(Continued)
38
COUNTY OFHAWAII
General Fund
Statement of Revenues, Expenditures,and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2020
(Concluded)
Original Budget Final Budget Actual (Budgetary Basis) Variance Positive (Negative)
Expenditures (continued):
Capital Outlay:
Community Development Block
grants (HUD) $150,000 $4,566,169 $4,401,567 $164,602
HOME Program 50,000 130,000 50,300 79,700
Total capital outlay 366,433,189 4,696,169 4,451,867 244,302
Total expenditure 366,433,189 408,154,259 362,206,036 45,948,223
Excess of revenues over expenditure 56,383,709 56,794,689 83,932,995 27,138,306
Other financing sources (uses):
Transfer out;
Housing Fund (2,283,619) (2,289,619) (1,17,810) 771,809
Solid Waste Fund (19,862,687) (19,862,887) (19,862,687) -
Sewer Fund (2,586,419) (2,586,419) (2,586,410) -
Golf Course Fund (650,205) (1,000,205) (1,080,385) -
Capital Project Fund - (54,980) (54,980) -
Disaster/Emergency Fund (250,008) (250,000) (250,000) -
Public Access, Open Space, and Natural Resources Preservation Fund
(6,014,000) (6,614,000) (6,557,730) 56,270
Public Access, Open Space, and Natural
Resources Preservation Maintenance Fund (826,750) (828,750) (262,526) 584,224
Budget Stabilization Fund (250,000) (250,000) (250,000) -
Debt Service Fund (44,879,547) (44,879,547) 44,879,547
Total transfers out (78,203,227) (78,614,207) (77,221,904) 1,392,303
Total other financing uses (78,203,227) (78,614,207) (77,221,904) 1,392,303
Excess (deficiency) of revenues and other
sources over (under) expenditures and other uses (21.819'518) (21,019,518) 6,711,091 28,530,609
Fund balance at beginning of year 76,08,742 76,188,742 76,188,742
Fund balance mend of year $54,369,224 $54,369,224 $82,899,833 $28,530,609
See accompanying notes`othe basic financial statements.
39
COUNTY OF HAWAII
Proprietary Funds
Statement of Net Position
June 30, 2020
Business-type activities - Enterprise Funds
Kulaimano Elderly Housing Project
Ouli Ehahi Affordable Housing Project
Total
Assets
Current assets:
Cash and cash equivalents (note 3) $680,115 $542,276 $1,222,391
Restricted cash and cash equivalents (note) 13,758 29,230 42,988
|mpncmfund (note 3) 50 100 150
Receivables.net (note 4) 2,143 8,629 10,771
Prepaid expenses 2,133 - 2,133
Total current assets 698,198 580,235 1,278,433
Noncurrent assets:
Restricted cash and cash equivalents (note 3) - 72,687 71,687
Capital assets (note 6):
Land and site improvements 511,000 515,727 1,026,727
Buildings and equipment 1,242,864 1,024,144 2,267,008
Less accumulated depreciation (1,150,891) (124,951) (1,375,842)
Total capital assets 502,973 1,414,920 1,917,893
Total noncurrent assets 502,973 1,487,607 1,990,580
Total assets 1,201,17 2,067,842 3,269,013
Liabilities
Current liabilities
Accounts payable 3,977 14,180 18,157
Due mother governmental funds (note 5) 4,000 4,008
Security deposits payable from restricted assets 13,758 27,850 41,608
Deferred revenue 341 1,468 1,809
Interest payable 7,560 - 7,560
Notes payable.current portion (note 10) 69,952 16,500 86,452
Total current liabilities 99,588 59,998 159,586
Noncurrent liabilities
Notes payable (note 10) 393,736 102,773 496,509
Total current liabilities 493,324 162,771 656,095
Net Position
Net investment incapital assets 39,285 1,295,647 1,334,932
Unrestricted 668,562 609,424 1,277,986
Total net position $707,847 $1,905,071 $2,612,918
See accompanying notes wthe basic financial statements.
-40-
COUNTY 0FHAWAII
Proprietary Funds
Statement of Revenues, Expenses, and Changes in Fund Net Position
For the Fiscal Year Ended June 30, 2020
Business-type Activities - Enterprise Funds
Kulaimano Elderly Housing Project
Ouli Ekahi Affordable Housing Project
Total -
Operating revenues:
Rental receipts from tenants $138,212 $337,100 $475,312
Rental subsidy from federal government-HUD 369,273 - 269,273
Laundry receipts 3,123 - 3,123
Other 222 3,493 3,715
Total operating revenues 410,830 340,593 751,423
Operating expenses:
Utilities 40,217 51,209 91,026
General and administration 176,018 91,254 267,272
Maintenance and repairs 78,367 116,384 194,751
Depreciation (note 6)
Total operating expenses
Operating income
Nonoperating revenues (expenses):
Investment income 5,174 19 5,193
Interest expense (24,614) - (24,614)
(Loss) on disposal of assets (4,934) - (4,934)
Total nonoperating revenues (expenses) (24,374) 19 (24,355)
Capital contributions
Transfers 80,740 536,036 616,776
Change in net position 130.526 597.414 727,940
Net position, beginning of year 577,321 1,307,657 1,884,978
Net position end of year $707,847 $1,905,071 $2,612,918
See accompanying notes the basic financial statements.
~41 ~
COUNTY Of HAWAII
Proprietary Funds
Statement or Cash Flows
For the Fiscal Year Ended June 30, 2020
Business-type Activities-Enterprise Funds
Kulaimano Elderly Housing Projects
Ouli Ekahi Affordable Housing Project
Total
Cash Flows from Operating Activities
Receipts from tenants $141,602 $338,130 $479.737
Receipts from federal government-HUD 269,273 - 269,273
Payments to suppliers for goods and services (307,746) (260,304) (568,050)
Net cash provided byoperating activities 103,129 77,826 180,955
Cash Flows from Capital and Related Financing Activities
Principal paid onnotes payable (66,186) (48,630) (114,816)
Interest paid on notes payable (25,869) - (25,869)
Purchase of capital assets (715) (2,237) (143,637)
Net cash used incapital and related financing activities
Cash Flows from Investing Activities
Proceeds from maturities of investments 1,600,000 - 1,600,000
Purchase of capital assets (1,600,000) - (1,600,080)
Interest on investments 5,376 19 5,395
.
Net cash provided by investing activities 5,376 19 5,395
Net increase (decrease) in cash and cash equivalents 15,735 26,970 42,713
Cash and cash equivalents mbeginning of year (including
restricted cash and cash equivalents) 678,188 617,315 1,295,503
Cash and cash equivalents at end of year (including
restricted cash and cash equivalents)
Reconciliation of Operating Income to Net Cash
Provided by Operating Activities
Operating income 74,160 61,359 135,519
Adjustments to reconcile operating income in net cash
provided by operating activities:
Depreciation expense 42,068 20,307 62,455
Change in assets and liabilities:
Receivables, net (1,984) (3,835) (5,019)
Prepaid expenses (74) - (74)
Accounts and other payables (10,999) (1,457) (12,456)
Deferred revenue (42) 572 530
Net cash provided byoperating activities $103,129 $77,826 $180,955
Supplemental Disclosure of Noncash Capital and Related
Financing Activities
Capital contributions $80,740 $536,036 $616,776
See accompanying notes to the basic financial statements.
42
COUNTY OF HAWAII
Fiduciary Funds
Statement of Fiduciary Net Position
June 30, 2020
Private-Purpose Trusts Agency Funds
Assets
Cash and cash equivalents (note 3) $ 2,581,795 $ 4,530,870
Investments (note 3) 2,192,849 285,468
Receivables:
Due from other agency funds 15,396
Other receivables 2,898 68,734
Total receivables 2,898 84,130
Total assets 4,777,542 $ 4.900,468
Liabilities
Vouchers payable 2,258
Due to other agency funds 15,396
Accrued liabilities 3,047,776
Advances payable 232,203
Assets held for the benefit of improvement districts 1,602,835
Total liabilities 4,900,468
Net Position
Held in trust for other parties 4,777,542
Total net position 4,777,542
See accompanying notes to the basic financial statements
43 -
COUNTY 0F HAWAII
Fiduciary Funds
Statement of Chan&csinFiduciary Net Position
For the Fiscal Year Ended June 30, 2020
Private.
Purpose
—Trusts—
Additions
Contributions:
Puna Geothermal Venture 50,000
Investment earnings:
Net increase in fair value of investments 77,308
Dividends and interest 69,292
Total additions
Deductions
Grant payments 45,724
Investment Fees 14,273
Total deductions 59,997
Change innet position 136,603
Net position, beginning of year 4,640,939
Net position, end of year 4,777,542
See accompanying notes in the basic financial statements.
-44-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
The accounting policies of the County of Hawaii (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).
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Financial Reporting Entity
The County has implemented Governmental Accounting Standards Board Statement No. 14,
The Financial Reporting Entity(GASB Statement No. 14), 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.
Primary Government The County operates under the Mayor-Council form of government
under a charter that became effective on January 2, 1969, and was amended in 1979, 1982,
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 can significantly influence the programs, projects, activities or level of
services performed or provided by the organization. An organization has a financial benefit or
burden relationship with the primary government if any one of three conditions exist: (1)The
primary government is legally entitled to or can otherwise access the organization's resources;
(2)The primary government is legally obligated or has otherwise assumed the obligation to
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
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 Presented 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 Kekeanao'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.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
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
which these funds are normally budgeted. This presentation is deemed most appropriate to (a)
demonstrate legal and covenant compliance, (b) demonstrate the source and use of liquid
resources, and (c) demonstrate how the County's actual experience conforms to the budget
fiscal plan. Since the governmental fund statements are presented using a different
measurement focus and basis of accounting than the government-wide statements'
governmental activities column, a reconciliation is presented on the page following each
statement, which briefly explains the adjustments necessary to transform the fund based
financial statements into the governmental activities column of the government-wide
presentation.
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 and fundfinancial statements—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 consolidation. Governmental activities,which normally are
supported by taxes and intergovernmental revenues, are reported separately from business-
type activities,which rely to a significant extent on fees and charges for support. Likewise,
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.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
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 expenditures/expenses. The various funds are reported by
generic classification within the financial statements.
GASB Statement No. 34, Basic Financial Statements and Management's Discussion and
Analysis--for State and Local Governments, sets forth minimum criteria (percentage of the
assets, deferred outflows of resources, liabilities,deferred inflows of resources, revenues or
expenditures/expenses 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 Fund—The general fund is the general operating fund of the County. It is used
to account for all activities of the general government, except those required to be
accounted for in other funds.
Capital Projects Fund— Used to account for the costs of constructing County capital
improvements financed with general obligation bond proceeds, federal and state grants,
and general and special revenue fund revenues. 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'imano Elderly Housing Project—Used to account for the operation of a rental
housing project for low-income senior citizens located north of Hilo.
Ouli Ekahi Affordable Housing Project—Used to account for the operation of a 33-unit
single-family affordable rental housing project located in Waimea.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
The County reports the following fiduciary funds:
Private-Purpose Trust Funds—Used to account for funds received from geothermal
developers to mitigate the effects of geothermal energy development. Also used to
account for investment income on funds received from import businesses at the port of
Hilo and the related expenditures to promote health and safety on the Island of Hawaii.
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 I-Kailua
Basis of Accounting
Basis of accounting refers to the period in which revenues and expenditures (or expenses) are
recognized in the accounts and reported in the basic financial statements. Basis of accounting
relates to the 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.
Mod fed 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.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
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 both 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,Codifcation of Accounting and Financial Reporting Guidance Contained
in Pre-November 30, 1989 FASB (Financial Accounting Standards Board) and AICPA
(American Institute of Certified Public Accountants) 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.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
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 less 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 June 30 are delinquent. Each delinquent installment bears
interest at I% per month and penalties of up to 10% of the amount due. Assessments are
based on 100%of estimated fair market values prior to the application of exemptions or
preferential assessments,
The 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,
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
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 I
of the tax year following the approval of the dedication. The dedicated exempt property or
portion of the property approved shall be subject to the minimum tax provisions of Section 19-
90(e) of the Hawaii 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 Role 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 Hawaii
County Code. The 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 forthis 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 I 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 Agricultural 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
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
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,
2020 is as follows:
Tax Abatement Program Amount of Taxes Abated -as defined by GASB 77
Enterprise Zone $3,638
Historic Residential Dedication $241,000
Low and Moderate Income Housing $828,907
Agricultural Use Programs $28,817,799
Solar Water Heater Credit $14,035
Inventories
Inventories consist of materials and supplies and are reported as expenditures at the time of
purchase (purchase method). Police and fire department inventories are stated using the first
in, first out (FIFO) method. Other inventories are stated at average cost.
Liquor Control
Section 281 of the Hawaii Revised Statutes requires that liquor license revenues collected be
used only for costs and expenses directly relating to operational and administrative costs
actually incurred by the liquor commission collecting such fees. The unexpended fees at
June 30, 2020 of $956,286 are reflected as a restriction of general fund balance.
- 53 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
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 Years
Infrastructure 20 to 100 years
Buildings and improvements 50 to 100 years
Ground and site improvements 20 to 50 years
Equipment 5 to 40 years
Easements 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 loss 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 (OPEB).
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
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 of
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, 2020 totaled $78,613,000 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 Note 8). Capital leases are recorded as
capital asset additions at their estimated fair value at the inception of the lease and the related
present value of the future 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 measuring the net pension liability,deferred outflows of resources and
deferred inflows of resources related to pensions, and pension expense, information about the
fiduciary net position of the Employees' Retirement System of the State of Hawaii (ERS)and
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
additions to and deductions from ERS'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 OPEB, and OPEB expense, information about the
fiduciary net position of the Hawaii Employer-Union Health Benefits Trust Fund ("EUTF")
and additions to/deductions from EUTFs 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 the
proprietary funds. Operating revenues generally result from providing services in connection
with the proprietary funds' principal ongoing operations. The principal operating revenues of
the proprietary funds are fees charged to residents for rent 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 the 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
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
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 Fund 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.
- 57 .
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
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 May 2020,GASB issued Statement No. 95, Postponement of the Effective Dales qf Certain
Authoritative Guidance. The primary objective of this Statement is to provide temporary
relief to governments and other stakeholders in connection with the COVID-19 pandemic.
This Statement postponed the effective dates of the following Statements that may have an
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, 2019, as postponed by
GASB 95. The County has not yet determined the effect this Statement will have on its
financial statements.
In August 2018, GASB issued Statement No. 90, Majority Equity Interests An
Amendment of GASB Stalemenls 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, 2019, as postponed by
GASB 95. The County has not yet determined the effect this Statement will have on its
financial statements,
In January 2020, GASB issued Statement No. 92, Omnibus 2020. The objective of this
Statement are to enhance comparability in accounting and financial reporting and to
improve the consistency of authoritative literature. The requirements of this Statement
relating to leases,reinsurance recoveries,and derivative instruments are effective upon
issuance. The other requirements are either effective for fiscal years or reporting periods
beginning after June 15,2021. The County has not yet determined the effect these
requirements 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 June 15,2021. The County has not yet
determined the effect this Statement will have on its financial statements.
. 58 -
COUNTY OF HAWAPI
Notes to the Basic Financial Statements
June 30, 2020
In June 2018,GASB issued Statement No. 89, Accounting for Interest Cost Incurred Before
the End of a Construction 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, 2020, as postponed by GASB 95. 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.
In March 2020, GASB issued Statement No. 93, Replacement of Interbank Offered Rates.
The objective of this Statement are to address accounting and financial reporting implications
resulting from the replacement on an interbank offered rate (IBOR). The requirements of this
Statement are effective beginning with reporting periods that begin after December 31, 2021.
The County has not yet determined the effect this Statement will have on its financial
statements.
In March 2020, GASB issued Statement No. 94, Public-Private and Public-Public
Partnerships and Availability Payment Arrangements. The objective of this Statement is to
improve financial reporting by addressing issues related to public-private and public-public
partnership arrangements. The requirements of this Statement are effective for fiscal years
beginning after June 15, 2022. The County has not yet determined the effect this Statement
will have on its financial statements.
In May 2020, GASB issued Statement No. 96, Subscription-Based Information Technology
Arrangements. The objective of this Statement is to provide uniform guidance for accounting
and financial reporting for transactions that meet the definition of a subscription-based
information technology arrangement. The requirements of this Statement are effective for
fiscal years beginning after June 15, 2022. The County has not yet determined the effect this
Statement will have on its financial statements.
In June 2020, GASB issued Statement No. 97, Certain Component Unit Criteria,and
Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred
Compensation Plans—An Amendment of GASB Statements No. 14 and No. 84, and a
Supersession of GASB Statement No. 32. The primary objective of this Statement is to create
more consistent financial reporting of defined contribution pension plans,defined contribution
OPEB plans and other employee benefit plans, while mitigating associated costs. The
requirements of this Statement are effective for reporting periods beginning after June 15,
2021. The County has not yet determined the effect this Statement will have on its financial
statements.
- 59 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
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 I 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 2019-20 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 $42.1 million in the general fund and $3.8
million in the special revenue funds. Legally adopted budgets include the General Fund,
Highway Fund, Sewer Fund, Solid Waste Fund,Cemetery Fund, Parking Meter Fund,
Vehicle Disposal Fund, Bikeway Fund, Workforce Investment Act Fund, Golf Course
Fund,Geothermal Relocation and Community Benefits Fund, Beautification Fund,
Hawaii County Housing Agency Fund, Park Dedication Fund,General Excise Tax Fund,
and Short-Tenn 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.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
• Formal budgetary integration is employed as a management control device during the
year for the General Fund, special revenue funds, and Capital Projects Fund. Formal
budgetary integration is not employed for debt service funds because effective budgetary
control is alternatively achieved through general obligation bond indenture provisions.
• The accompanying statement of revenues,expenditures and changes in fund balances
budget and actual (budgetary basis) for the General Fund presents a comparison of 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, 2020:
Ending fund balance - GAAP basis $84,859,068
Encumbrance adjustments:
Beginning encumbrances and unexpended allotments 1,156,030
Ending encumbrances and unexpended allotments (1,589,411)
Other adjustments (1,525,854)
Ending fund balance-Non-GAAP budgetary basis $82,899,833
3. CASH AND INVESTMENTS
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
County. Under Section 46-50 of the Hawaii Revised 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.
- 61 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
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 June 30,2020 was $297,816,686 for the primary government and
$7,362,914 for the fiduciary funds,
Information relating to bank balance, insurance and collateral of cash deposits is determined
on a county-wide basis. Total bank balances of deposits for the primary government and
fiduciary funds amounted to $319,384,870 at June 30,2020. Of that amount, $317,951,440
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 $1,433,430
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.
- 62 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
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 1 —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 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 $11,149,082 and certificates of deposits of
$63,048,130: Valued using quoted prices at the end of the fiscal year for identical or
similar assets in markets that are not active (Level 2).
Equity securities of $1,795,203: Valued using quoted prices in active markets for
identical assets or liabilities that a government can access at the measurement date (Level
1).
- 63 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
The County's investments and maturities at June 30, 2020 are as follows:
Maturity in years,
Fair Value Less than I 1 —5
Investments Primary Government:
Certificates of deposit $ 62,797,882 $ 56,419,890 $ 6,377,992
Government sponsored securities 10,716,216 3,010860 7,705 356
Investments— Private-Purpose Trusts:
Government sponsored securities $ 397,646 $ $ 397,646
Equity securities 1,795 203 1,795203
Investments— Agency Funds:
Certificates of deposit $ 250,248 $ 250,248 $
Government sponsored securities 35,220 35,200
$285,468 $250,248 $35,200
Interest 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: Custodial 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.
Concentration of Credit 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, 2020,
investments were distributed as follows: FTN Financial, 0.9%; Multi Bank Securities, 7.1%;
First Hawaiian Bank, 30.4%; Raymond James, 2.0%; Stifel Nicolaus & Company, 3.1%; Bank
of Hawaii, 18.8%; Territorial Savings 12.2%; US Bank, 2.5% and Central Pacific Bank,
23.0%.
- 64 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
Restricted Cash and Cash Equivalents and Investments
Cash and cash equivalents and investments classified as restricted assets for the primary
government at June 30, 2020 amounted to $146,398,420.
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 $48,023,575 at June 30, 2020.
Cash and investments in the Bond Redemption Fund and the Interest Fund are restricted to
debt service related payments and amounted to $39,094,547.
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 $25,773,612.
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 $4,298,639.
The restricted cash 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
lands or property entitlements for public outdoor recreation and education. Such amounts
totaled $956,286 and $28,136,086, respectively.
Tenant security deposits received by the County for the Kula'imano Elderly Housing Project
and the Ouli Ekahi Affordable Housing Project are recorded as restricted assets. Such funds
amounted to$13,758 and $29,230, respectively,at June 30, 2020.
An operating reserve fund was established by the Ouli 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 $72,687 at June
30, 2020.
- 65 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2020
4. RECEIVABLES
Receivables as of June 30,2020, 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:
GeneralFund Capital Projects Fund Other Governmental Funds Total
Real property taxes $36,233,872 $ $ $36,233,872
Accounts receivable:
Sewer 2,465,560 2,465,560
Solid waste 929,591 929,591
Intergovernmental 26,460,253 6,842,866 18,694,695 51,997.,814
Gross receivables 62,694,125 6,842,866 22,089,846 91,626,837
Less: allowance for
uncollectibles (7,798,122) (780,896) (8,579,018)
Net total receivables $54,896,003 $6,842,866 $21,308,950 $83,047,819
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, 2020, the outstanding balance for both Improvement Districts of $1,887,115 is reflected in
the government-wide statement of net position as a receivable (see Note 10).
Business-type activities:
Enterprise
Funds
Accounts receivable:
Rent $17,277
Other 346
Gross receivables 17,623
Less: allowance for
uncollectibles (6,852)
Net total receivables $10 771
- 66-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
5. INTERFUND RECEIVABLES AND PAYABLES
Interfund receivables and payables consist of the following at June 30, 2020:
Receivable Fund Payable Fund Amount
General fund Capital projects fund Other governmental funds $590,169
2,175,623
Capital projects fund Other governmental funds 6,723,688
Other governmental funds General fund 2,192,921
Capital projects fund 5,521
Other governmental funds 220,165
2,418,607
Total $11,317,918
Other governmental funds Enterprise funds $4,000
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 June 30, 2020 consisted of the following:
General Fund Transfers out: Capital Projects Fund Other Governmental Funds Total
Transfers in:
Capital Projects Fund $ 54,980 $ $16,064,411 $16,119,391
Other governmental funds 66,180,787 7,898,787 74,079,574
$66,235,767 $ $23,963,198 $90,198,965
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.
- 67 -
COUNTY OF HAWAVI
Notes to the Basic Financial Statements
June 30, 2020
6, CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2020 for the County was as follows:
Balance Balance
July 1, Retirements/ June 30,
2019 Additions Transfers 2020
Governmental activities:
Capital assets not being depreciated:
Land and
improvements $ 263,470,318 $ 15,418,041 $ $ 278,888,359
Easements 6,232,881 4,866,505 11,099,386
Construction work in
progress 58,455,811 42,822,755 A20,947,71580,330,851
Total capital assets not
being depreciated 328,159,010 63,107,301 (20,947,715) 370,318,596
Capital assets being depreciated:
Buildings and
improvements 768,798,968 21,165,414 (86,003) 789,878,379
Equipment 164,575,138 8,533,727 (3,782,993) 169,325,872
Easements 456,497 142 456,639
Infrastructure 653-345,967 9,571,594 (446,497) 662,471,064
Total capital assets
being depreciated 1,587,176,570 39,270,877 (4,315,493) 1,622,131,954
Less accumulated depreciation for:
Buildings and
improvements (141,052,396) (13,231,151) 8,155 (154,275,392)
Equipment (105,238,035) (9,247,966) 3,572,405 (110,913,596)
Easements (439,300) -- (439,300)
Infrastructure (340,467,210) (25,833,054) --- 86,413 (366,213,851)
Total accumulated
depreciation (587J96,941) (48,312,171) 3,666,973 (631,842,119J
Total capital assets
being depreciated,
net 999,979,629 (9,041,294) (648,520) 990,289,815
Governmental
activities capital
assets, net $1,328,138,639 $54,066,007 ($21,596,235) $1,360,608,411
- 68 -.
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2020
Balance July 1, 2019 Additions Retirements/Transfers Balance June 30, 2020
Business-type activities:
Capital assets not being depreciated:
Land $ 753,877 $ - $ $ 753,877
Capital assets being depreciated:
Buildings and
improvements 1,593,187 536,037 2,129,224
Ground and site
improvements 272,850 272,850
Equipment 119,909 83,691 (65,816) 137,784
Total capital assets
being depreciated 1,985,946 619,728 (65,816) 2,539,858
Less accumulated depreciation for:
Buildings and
improvements (1,054,777) (42,000) (1,096,777)
Ground and site
improvements (223,651) (4,347) (227,998)
Equipment (95,841) (16,108) 60,882 (51,067)
Total accumulated
Depreciation (1,374,269) (62,455) 60,882 (1,375,842
Total capital assets
being depreciated,
net 611,677 557.273 (4,934) 1,164,016
Business-type
activities capital
assets, net $1,365,554 $557,237 $(4,934) $1,917,893
69
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
Depreciation expense was charged to functions/programs of the primary government as
follows:
Governmental activities:
General government $ 2,659,290
Public safety 4,563,086
Highways and streets 27,668,832
Sanitation 7,587,474
Health, education and welfare 2,255,247
Culture and recreation 3,578,242
Total depreciation expense--governmental activities $48,112,1771
Business-type activities:
Kula'imano Elderly Housing Project $42,068
Ouli Ekahi Affordable Housing Project 20,387
Total depreciation expense-business-type activities
7. DEFERRED INFLOW OF RESOURCES
Deferred inflow of resources consists of the following at June 30, 2020:
Governmental activities:
Capital Other Total
General Projects Governmental Governmental
Fund Fund Funds Funds
Real property taxes $ 30,350,593 $ $ $ 30,350,593
Liquor control revenue 152,256 152,256
Sewer revenue 1,723,643 1,723,643
Housing revenue 115,182 115,182
Solid waste revenue 890,611 890,611
Total presented in
fund financial
statements 30,502,849 2,729,436 33,232,285
Add deferred inflows
of resources related
to pensions & OPEB 19,305,022 19,305,022
Less adjustments for
accrual of revenues (28,435,750) (2,729,436) (31,165,1861
Total government-
wide financial
statements
- 70 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
8. LEASES
The County leases machinery and equipment under noncancellable leases expiring at various
dates through May 2025, 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 $19,426,559 and $3,347,907, respectively,
and the related present value of the remaining obligations under the capital leases amounting
to $10,771,109 at June 30, 2020 are included in capital assets and long-term debt, respectively.
The County also leases land, office facilities and other equipment under noticancellable
operating leases expiring through August 2045. Expenditures for such operating leases were
$1,774,357 for the fiscal year ended June 30, 2020.
The future minimum payments under capital and operating leases at June 30, 2020 are as
follows:
Capital Operating
Leased Leases
Year Ending June 30:
2021 $3,909,435 $ 1,769,251
2022 3,078,528 1,564,197
2023 2,551,669 884,563
2024 1,312,657 597,981
2025 410,489 138,917
2026-2030 -- 62,796
2031 -2035 902
2036 -2040 900
2041 -2045 900
2046-2049 31
Total minimum lease payments 11,262,778 $5,020,438
Less amount representing interest (491,669)
Obligations under capital leases $10,771,109
9. SOLID WASTE LANDFILL CLOSURE AND POSTCLOSURE CARE COSTS
Hilo Landfill In December 2019,the County closed its landfill located in the city of Hilo.
Under state and federal requirements, the County would have to monitor and maintain this site
for thirty years from the closure date. The estimated cost of closure and postclosure is
$25,823,000, based on what it would cost to perform the required closure and postclosure care
in 2020. Actual costs may be higher due to inflation,changes in technology,or changes in
regulations. Through June 30, 2020, $20,716,000 was spent on closure and postclosure care
of the landfill. The remaining estimated liability of$5,107,000 is included in the government-
wide statement of net position. During the year ended June 30, 2020, $19,800,000 was spent
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
on closure of the landfill. The County is providing financial assurance for postclosure care
and remediation through self insurance as explained below.
Kealakehe In October 1993, the County closed its Kealakehe landfill in Kona. Under state
and federal requirements, the County would have to monitor and maintain this site for ten
years from the closure date. However,the County anticipates monitoring and maintaining the
site for thirty years because there is presently a subterranean fire which requires active
management. The estimated cost of closure and postclosure is $17,250,000, based on what it
would cost to perform the required closure and postclosure care in 2020. Actual costs may be
higher due to inflation,changes in technology, or changes in regulations. Through
June 30, 2020, $9,002,000 was spent on closure and postclosure care of the landfill.
The remaining estimated liability of $8,248,000 is included in the government-wide statement
of net position. During the year ended June 30, 2020, $114,000 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 Puuanahulu 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 terms of the contract, the County has no responsibility for
remediation,closure or postclosure care. Accordingly, no liability for this landfill is included
in the County's financial statements.
Financial Assurance For fiscal year 2020, 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 recordkeeping
component. Local governments are required to satisfy each of the three components to pass
the annual test. Management believes that the County has satisfied each of the components of
the local government financial assurance requirements.
In fiscal year 2013, the County closed its two metal salvage facilities located near the Hilo and
Kealakehe Transfer Stations. State law requires the County to perform necessary closure
activities, including, but not limited to,the removal of all remaining solid waste and
performing appropriate site assessments and remedial activities. The estimated liability of
approximately $19,341,000 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.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
The County currently maintains and utilizes 7 underground fuel storage tanks to fuel both
official and private vehicles that are used for County business. The tanks range in size from
1,000 to 8,000 gallons. The estimated liability of $1,775,000 for the cost to check for ground
contamination and potential cleanup is included in the County's financial statements.
10. LONG-TERM DEBT
General Obligation Bonds
The County issues general obligation bonds to provide funds for the acquisition and
construction of major capital facilities. These bonds have been issued by the County for 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 2009. 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 30,2020:
Bonds Authorized Issue Amount Bond Balance July 1, 2019 Issues Retirements Bond Balance June 30, 2020 Due Within One Year
2007 Series C S 10,787,388 $ 2,344,659 $ $ 2,344,659 $ 1,144,611
2010 Series A 26,493,750 1,455,000 (1,455,000)
2010 Series B 18,506,250 14,190,000 (978,750) 13,211,250 1,023,750
2013 Series A 58,509,892 4,375,126 (2,323,914) 2,051,312 2,445,048
2013 Series B 21,010,000 11,655,000 (2,145,000) 9,510,000 2,235,000
2013 Series C 18,470,000 11,980,000 (1,805,000) 10,175,000 1,875,000
2013 P1 Series A 1,169,000 1,080,564 (23,649) 1,056,915 24,300
2016 Series A 99,620,000 99,620,000 99,620.000 4,180,000
2016 Series B 13,497,500 11,257,500 (1,187,500) 10,070,000 1,240,000
2016 Series C 44,835,000 41,290,000 (3,725,000) 37,565,000 3,915,000
2016 Series D 28,860,000 28,860,000 (2,280,000) 26,580,000 2,400,000
2016 Series E 19,061,250 19,061,250 19,061,250 1,545,000
2016 Series F 10,040,000 3,390,000 (3,390,000)
2017 Series A 90,000,000 87,315,000 (2,820,000) 84,495,000 2,965,000
2017 Series C 2,083,779 1,066,347 (1,066,347)
2017 Series D 43,475,000 43,475,000
43,475,000
Add unamoritized 506.418,809 382,415,446 (23,200,060) 359.215,386 24,992,709
premium 87,853.899 58 024,081 (4,800,919) 53,223,162 4,75 7,434
$594,272,708 $44,0439,527 ($28,000,979) $412,438,548 $29,750,143
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
General obligation bonds payable reported in the governmental activities section on the
government-wide statement of net position at June 30, 2020 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 B at 3.335% to 6.1%, due through 2030 13,211,250
2013 Series A at 2.0% to 5.0% ,due through 2020 2,051,312
2013 Series B at 3.0% to 5.0%, due through 2023 9,510,000
2013 Series C at 4.0% to 5.0%, due through 2024 10,175,000
2013 PI Series A at 2.75%, due through 2048 1,056,915
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 10,070,000
2016 Refunding Series C at 5.0%, due through 2027 37,565,000
2016 Refunding Series D at 5.0%, due through 2028 26,580,000
2016 Refunding Series E at 2.0% to 5.0%, due through 2029 19,061,250
2017 Series A at 5.0%, due through 2037 84,495,000
2017 Refunding Series D at 3.0% to 5.0%, due through 2032 43,475,000
Total general obligation bonds payable $359,215,386
Annual debt service requirements to maturity for the above general obligation bonds are as
follows:
Governmental Activities
Fiscal year ending June 30: Principal Interest
2021 $ 24,992,709 $ 16,351,526
2022 26,406,084 15,111,597
2023 26,457,516 13,836,161
2024 27,753,775 12,539,036
2025 26,482,300 11,233,098
2026-2030 119,736,472 37,979,465
2031-2035 78,303,373 15,177,060
2036-2040 28,662,834 1,764,938
2041-2045 220,848 42,941
2046-2049 199,475 11,153
Total $359,215,386 $124,046,975
Refunded Bonds
In periods prior to the year ended June 30, 2020, 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 30,2020,approximately $61.1 million of bonds outstanding were considered defeased.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
Bond Premiums
At June 30, 2020, total unamortized bond premiums were $53,223,162, 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 $646.1 million in general obligation bonds
to finance both specified and unspecified capital improvement projects. At June 30, 2020,
$301.4 million was not yet issued.
Subsequent Events On November 4, 2020, the County issued a total of $77,135,000 in
general obligation bonds. The interest rates range from 0.34 to 5.0%. The bonds are due
through 2040, The bonds were authorized as noted above. The proceeds from these
bonds were used to retire the previously issued Bond Anticipation Notes(BANS)that
were considered a liability at the governmental fund level.
General Obligation Bond Anticipation Notes
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, 2020:
Note No. Issue Amount Balance July 1, 2019 Issues Retirements Balance June 30, 2020
Series E, Note R-I $ 6,000,000 $ 6,000,000 ($ 6,000.000) $
Series E, Note R-2 6,000,000 6,000,000 (6,000,000)
Series E, Note R-3 6,000,000 6,000,000 (6,000,000)
Series E, Note R4 6,000,000 6,000,000 (6M0,000)
Series E, Note R-5 4,000,000 4,000,000 (4,000,000)
Series E, Note R-6 500,000 500,000 (500,000)
Series E, Note R-7 500,000 500,000 (500,000)
Series E, Note R-8 500,000 500,000 (500,000)
Series F, Note R-9 500,000 500,000 (500,000)
Series E, Note R-10 6,000,000 6,000,000 6,000,000
Series E, Note R-11 6,000,000 6,000,000 6,000,000
Series E, Note R-12 6,000,000 6,000,000 6,000,000
Series E, Note R-13 6,000,000 6,000,000 6,000,000
Series E, Note R-14 4,000,000 4,000,000 4,000,000
Series E, Note R-15 500,000 500,000 500,000
Series E, Note R-16 500,000 500,000 500,000
Series E, Note R-17 500,000 500.000 500,000
Series E, Note R-18 500,00
$60,000,000 $30,000,000 $30,000,000 ($30,000,000) $30,000,000
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
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
state to finance construction of wastewater projects. The County has eleven projects approved
for funding with these loans.
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 Loans are secured by the gross
revenues of the County.
The schedule below shows the County's SRF transactions for the fiscal year ended June 30,
2020:
Loans Authorized Approved Amount Loan Balance July 1, 2019 Additions Retirements/Forgiveness Loan Balance June 30, 2020 Due Within One Year
Cesspool
Conversion $ 8,363.773 $ 3,362,875 $ (441,144) $ 2,921,731 $ 443,418
Honoka'a 1,CC 4,513.138 2,329,811 (181,085) 2,148,726 181,988
Queen
Liliuokalani 9,421,732 5,534,023 (490,712) 5,043,311 493,161
Kalanianole 7,847,045 5,142,509 (355,560) 4,786,949 357,334
Kealakehe
WWTPAU 21,162,934 14,128,775 (866,599) 13,262,176 868,898
North Kona 2,690,404 1,616,102 (79,449) 1,536,653 80,046
Kealakehe
Effluent Reuse 8,677,918 1,833,484 (85,354) 1,748,130 86,458
SH Landfill
Closure 21.209,015 448,092 174,021 622,113 29,046
Kealakehe Scrap
Metal 8,000,973 1,297,923 5,297,923 247,352
$91,886,952 $39,693,594 $174,021 $(2,499,903) $37,367,712 $2,787,701 _ZU7_
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
2021 $ 2,787,701 $ 293,892
2022 2,801,418 272,134
2023 2,815,303 250,178
2024 2,829,211 228,170
2025 2,843,375 205,877
2026-2030 12,816,084 710,930
2031-2035 8,377,655 276,703
2036-2040 2,096,965 47,714
Total $3,367,712
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
Other General Long-Term Obligations
The following is a summary of other general long-term obligations transactions for the fiscal
year ended June 30, 2020:
Balance July 1,2019 Additions* Payments Balance June 30, 2020 Due Within One Year
Governmental activities:
Compensated absences $42,412,713 $15,834,465 $(12,754,479) $45,492,699 $10,950,611
Claims and judgments
(see Note 12) 31,484,483 4,400,261 (8,075,318) 27,809,426 4,375,447
Capital leases
(see Note 8) 11,579,332 2,821,423 (3,629,646) 10,771,109 3,665,315
Landfill costs payable
(see Note 9) 31,015,000 2,259,489 (19,919,489) 13,355,000 1,505,257
Pollution remediation
(see Note 9) 12,440,733 8,556,351 (1,655,735) 19,341,349 3,381,349
Underground Storage
Tank (see Note 9) 1,775,000 1,775,000
Total $128,932,261 $35,646,989 $(46,034,667) $118,544,583 $23,877,979
Net of new claims liability and existing claims resolved at less than previous estimate.
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 June 30, 2020 includes $33,715,214, which is
reserved for principal payments on general obligation bonds and $5,131,343, which is
reserved for the payment of interest on the bonds.
Enterprise Fund Notes,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
payments of$7,826 on the old notes at 5.547% interest. Under this payment schedule,the
Project will make contributions through 2025 of the bonds 2032 maturity date.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
The following is a summary of the Project's bond payable transactions for the fiscal year
ended June 30, 2020:
Balance at July 1, 2019 $ 529,874
Deductions (66,186)
Balance at June 30, 2020 463,688
Less current portion (69,952)
Note payable, net of
current portion $393,736
The following is a summary of the annual maturities for the enterprise fund bond payable:
Business-type Activities
Fiscal year ending June 30: Principal Interest
2021 $ 69,952 1,997
2022 73,932 17,905
2023 78,139 13,580
2024 82,586 9,009
2025 87,285 4,178
2026 71,794 288
Total
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 30, 2020:
Balance at July 1, 2019 $167,903
Deductions (48,630)
Balance at June 30, 2020 119,273
Less current portion (16,500)
Loan payable, net of
current portion $102,773
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
The following is a summary of the annual maturities for the enterprise fund loan payable:
Business-type Activities
Fiscal year ending June 30: Principal
2021 $16,500
2022 16,500
2023 16,500
2024 16,500
2025 16,500
2026—2028 36,773
Total
Special Assessment Bonds
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 $830,200 at June 30,2020.
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
$1,056,915 at June 30, 2020.
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, 2020:
Balance at July 1, 2019 $1,994,867
Deductions (107,752)
Balance at June 30, 2020 $1,877,115
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
The following is a summary of the annual maturities for the improvement district general
obligation bonds:
Fiscal year ending June 30: Principal Interest
2021 $ 112,317 $ 65,336
2022 117,083 60,466
2023 122,057 55,382
2024 127,251 50,074
2025 132,673 44,532
2026—2030 494,204 142,528
2031 --2035 168,374 96,136
2036—2040 192,834 71,339
2041 -- 2045 220,848 42,940
2046- 2049 199,474 11,153
Total $1,887,115 $639,886
11. COMMITMENTS AND CONTINGENCIES
Contractual commitments—Contractual commitments for capital projects, expenses, and
supplies at June 30, 2020, 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 $15,444,635
Capital projects fund 145,749,348
Nonmajor funds 12,120,942
$173,314,925
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 claims 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.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
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 2000. The self-evaluation and transition plan for
programs, practices and procedures was completed and approved by the County Council. The
cost impact of implementation is not material because the necessary modifications were
primarily procedural. The second part of this stipulated agreement required 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 modifications and renovations was 12 years from the date the
County Council accepted the self-evaluation. The initial (1997-2000) estimated cost of the
modifications necessary to provide equal access to these facilities was $15.1 million, which
would have been spent over the 12-year period, Funding allocated by the County over the
initial few years for facilities modifications was $17.5 million,with another $4 million of
federal funding provided through community development block grants over the next 2 years.
The Department of Public Works requested an additional $2 million a year for non-Parks &
Recreation County facilities' ADA renovation projects. 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 form of both a time extension and reprioritization
of sites. As a result,the County obtained approval of a modified 4-year plan wherein
accessibility improvements at the then remaining 35 park sites were required to be completed
by December 31, 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 improvement/enhancement 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 (Francis Wong Stadium at
Ho'olulu Complex) that was reintroduced into the transition plan via the court, 19 have been
completed, I has been permanently omitted due to lava inundation, 11 are in design and
permitting or are having the bid documents finalized,and 5 have either been awarded, in
process of construction or construction is set to begin in fiscal year 2021. The County has
encumbered or spent more than $19M on these remaining 35 projects to date. The County
had spent $42.0 million for construction and design consultant costs to complete the 50 park
facilities (some having multiple ADA work being completed) prior to the development of the
modified four year plan. Additionally, the County's ADA coordinator (Equal Opportunity
Officer) has access to an operational 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 Department of Human Resources' web page
under the heading"Procedure for Requesting Modifications to County of Hawaii Facilities,
Programs,or Services". Also, Parks has a Recreation Specialist who reviews and investigates
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
requests for reasonable accommodations,and recommends specific actions on those requests,
amongst other duties.
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
buses and subsidized police vehicles,and auto physical damage coverage on police fleet
vehicles and the Kohala Ranch fire truck. The County ensures property insurance is obtained
on housing 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, 2020, the amount
of this liability was $27,809,426. This is the County's best estimate based on available
information. Changes in the reported liability since July 1, 2018 are given below.
General Liability Workers' Compensation Total Liability
Balance at July 1, 2018 $1,897,723 $16,237,686 $18,135,409
Incurred claims (including IBNR)* 14,128,499 3,060,489 17,188,988
Claim payments (199,932) (3,639,982) (3,839,914)
Balance at June 30,2019 $15,826,290 $15,658,193 $31,484,483
Incurred claims(including IBNR)* 736,144 3,664,117 4,400,261
Claim payments (3,154,614) (4,920,704) (8,075318)
Balance at June 30, 2020 $13,407,820 $14,401,606 $27,809,426
*Net of new claims liability and existing claims resolved at less than previous estimate.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
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 terms,
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 ERSs 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 service.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 Iieu 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 the original retirement allowance without a
ceiling (2.5% of the original retirement allowance the first year, 5.0% the second year, 7.5%
the third year, etc.). For 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 service are eligible to retire at age 62. 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
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
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
spouse/reciprocal beneficiary receives 100% joint and survivor lifetime pension.
Contributory Plan for Employees Hired Prior to July 1, 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 aver-age 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 55.
Disability 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.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 services 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.
Ordinary death benefits are available to employees who were active at time of death with
at least I year of service. Ordinary death benefits consist of a lump sum payment of the
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
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.
Hybrid Plan for Employees Hired Prior to Jules, 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,
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
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 service are eligible to retire at age 60. Sewer workers, water
safety officers,and EMTs may retire with 25 years of credited service at age 55,
Disability and Death Benefits- Provisions for disability and death 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 lifetime 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 2020 were 36.00% for police and firefighters and 22.0% for
all other employees. Contributions to the pension plan from the County for the year ended
June 30,2020,2019,and 2018 were $52,778,035, $44,853,953, and $41,562,933,
respectively.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
The employer is required to make all contributions for members in the noncontributory plan.
For contributory plan employees hired prior to July 1, 2012, general employees are required to
contribute 7.8% 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 outflows of resources and deferred
inflows of resources related to pensions—At June 30, 2020, the County reported a liability of
$668,213,164 for its proportionate share of the net pension liability. The net pension liability
was measured as of June 30, 2019, 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, 2019, the
County's proportion was 4.72%, which was a decrease of .05% from its proportion measured
as of June 30, 2018.
For the year ended June 30, 2020, the County recognized pension expense of $109,621,758.
At June 30, 2020, the County reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources:
Deferred Outflowsof Resources Deferred Inflows of Resources
Differences between expected and actual experience $ 32,494,705 $ 563,501
Net difference between projected and actual investment
earnings on pension plan investments -- 1,753,675
Changes in assumptions 46,055,421 513,885
Changes in proportion and differences between employer
contributions and proportionate share of contributions 11,940,916 13,860,078
County contributions subsequent to the measurement date 52,778,035
Total $143,269,077 $16,691,139
$52,778,035 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, 2021.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
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:
Fiscal Year Ending, June 30, Net Deferred Outflows of Resources
2021 $42,180,334
2022 19,859,728
2023 6,457,817
2024 4,791,456
2025 510,568
$73,799,903
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% - 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, 2019 were based on the
following:
Active membersMultiples of the RP 2014 mortality table for active employees based
on the occupation of the member.
Healthy retirees - The 2019 Public Retirees of Hawaii mortality table,generational
projection using the BB projection table from the year 2019 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 2019. Minimum
mortality rate of 3.5% for males and 2.5% for females.
The actuarial assumptions used in the June 30, 2019 valuation were based on the results of an
actuarial experience study as of June 30,2018, with most assumptions based on the period
from July 1, 2013, through June 30, 2018, The major changes to assumptions resulting from
the 2018 actuarial experience study were (1) to update the base mortality tables with client-
specific mortality tables developed using the actual mortality experience of non-disabled
retirees in ERS and (2) to update pre-retirement mortality tables for active employees to the
recently published Pub-2010 mortality tables for active employees, by job classification.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
The long-term expected rate of return on pension plan investments was determined using a
"top down approach" 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 nominal real rates of return by the target asset allocation
percentage.
The target allocation and best estimates of geometric rates of return for each major asset class
are summarized in the following table:
Strategic Allocation Target Allocation Expected Long-Term Rate of Return* Long-Term Expected Real Rate of Return
(Risk-Based Classes)
Broad growth 63.00% 7.65%
Crisis risk offset 20.00% 5.15% 2.90%
Real return 10.00% 4.55% 2.30%
Principal protection 7.00% 3.00% 0.75%
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 well as what the County's
proportionate share of the net pension liability would be if it were calculated using a discount
rate that is 1-percentage-point lower (6.00%) or 1-percentage-point higher (8.00%) than the
current rate:
1% Decrease Current Discount 1% Increase
County's proportionate share of (6.00%) Rate (7.00%) (8.00%)
the net pension liability $878,868,976 $668,213,164 $516,544,882
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
Pension plan fiduciary netposition— 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 30,2020, the annual amount payable to the ERS
totaled $4,620,657, which represents the employer contribution for the second half of the
month of June 2020, as required by HRS,and the excess pension cost under Act 153/SLH 2-
12 REFER HRS Section 88-100 for fiscal year ended June 30, 2020.
Other Pension Plans-County of Hawaii Bandsmen Pension System
The County also sponsors a nonqualified, 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 July 1,2019, 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 ou0ows of resources and deferred
inflows of resources related to pensions—At June 30,2020, the County reported a liability of
$1,026,021. The total pension liability was measured as of June 30, 2020 based on an
actuarial valuation as of July 1,2019.
For the year ended June 30, 2020, the County recognized pension payments of $49,612 and
pension expense of $123,892.
Actuarial assumptions—The total pension liability in the June 30, 2020 actuarial report was
determined using the following actuarial assumptions,applied to all periods included in the
measurement:
Inflation 2.50%
Salary increases 3.50%, including inflation
The discount rate used to measure the County's total pension liability was 2.45% based on the
daily municipal bond rate closest to but not later than the measurement date of the Fidelity
"20-Year Municipal GO AA Index".
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
The following presents the County's total pension liability calculated using the discount rate
of 2.45%, as well as what the County's total pension liability would be if it were calculated
using a discount rate that is I-percentage-point lower (1.45%) or 1-percentage-point higher
(3.45%) than the current rate:
1% Decrease Current Discount 1% Increase
(1.45%) Rate (2.45%) (3.45%)
County's total pension liability $1,177,850 $1,026,021 $901,550
Schedule of Changes in Total Pension Liability
Measurement year ending June 30, 2020
Total Pension Liability
Service cost $7,577
Interest 29,250
Changes of assumptions 87,065
Benefit payments (49,612)
Net Change in Total Pension Liability 74,280
Total Pension Liability—Beginning 951,741
Total Pension Liability—Ending $1,026,021
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 employees, 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.
The following table provides a summary of the number of employees covered by the benefit
terms as of July 1, 2019.
Inactive employees or beneficiaries currently receiving benefits 1,693
Inactive employees entitled but not yet receiving benefit payments 229
Active employees 1,406
4,328
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
Contributions The County's contribution 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 liability over the next thirty years. For the fiscal year ended June 30, 2020,
contributions to the OPER Plan from the County totaled $41,604,474 which resulted in an
average contribution rate of approximately 22.0% of covered-employee payroll.
Subsequent Events On July 13,2020 ,to address the budget shortfalls resulting from the
COVID-19 pandemic, the Governor of the State of Hawaii approved an emergency
proclamation that suspended the law requiring employers to pay the OPER pre-funding in
fiscal year 2021.
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 hired 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.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
Net OPEB liability,The County's net OPEB liability was measured as of July 1, 2019, 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, 2019, and the reporting date, June 30, 2020, that are expected to have a significant effect on
the net OPEB liability.
Actuarial assumptions-The total OPEB liability in the July 1, 2019 actuarial valuation was
determined using the following actuarial assumptions, applied to all periods included in the
measurement, unless otherwise specified:
Inflation 2.50%
Salary increases 3.50%-7.00%, including inflation
Payroll growth rate 3.50%
Investment rate of return 7.00%
Healthcare cost trend rates
PPO Initial rates of 8.00%; declining to a rate of 4.86% after
12 years
HMO Initial rate of 8.00%;declining to a rate of 4.86% after
12 years
Part B& base monthly Initial rates of 5.00%;declining to a rate of 4.70%
contribution after I I years
Dental Initial rates of 5.00% for the first two years; followed
by 4.00%
Vision Initial rates of 0.00% for the first two years; followed
by 2.50%
Life insurance 0.00%
Mortality rates used in the actuarial valuation as of July 1,2019 were based on the following:
Active members -Multiples of the Pub-2010, Employee Tables for active employees
based on the occupation of the member.
Healthy retirees--The 2019 Public Retirees of Hawaii mortality table,generational
projection using the BB projection table from the year 2019 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 2019. Minimum
mortality rate of 3.5% for males and 2.5% for females.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
The actuarial assumptions used in the July 1, 2019 valuation were based on the experience
study covering the five year period ending June 30, 2018 as conducted for the Hawaii
Employees' Retirement System (ERS).
The long-term expected rate of return on OPER 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:
Strategic Allocation
(Risk-Based Classes) Target Allocation Long-Term Expected Real Rate of Return
International Equity 17.00% 6.90%
U.S. Equity 15.00% 5.35%
Private Equity 10.00% 8.80%
Core Real Estate 10.00% 3.90%
Trend Following 9.00% 3.25%
U.S. Microcap 7.00% 7.30%
Global Options 7.00% 4.75%
Private Credit 6.00% 5.60%
Long Treasuries 6.00% 2.00%
Alternative Risk
Premium 5,00% 2.75%
TIPS 5.00% 1.20%
Core Bonds 3.00% 1.50%
100.00%
Discount rate --The discount rate used to measure the total OPER 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.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
Changes in the Net OPEB Liability:
The following schedule presents the changes in the net OPEB liability for the fiscal year
ending June 30, 2020:
Total OPEB Liability (a) Increase (Decrease) Plan FiduciaryNet Position (b) Net OPEB Liability (a)-(b)
Balance at June 30, 2019 $ 551,431,353 $150,596,543 $ 400,834,810
Changes for the fiscal year:
Service cost 12,402,599 12,402,599
Interest on the total OPEB liability 38,381,475 38,381,475
Employer contributions 39,770,000 (39,770,000)
Net investment income 7,187,610 (7,187,610)
Benefit payments (18,651,726) (18,651,726)
Administrative expense (49,623) 49,623
Difference between expected
and actual experience 9,224,217 9,224,217
Changes of assumptions 1,862,836 1,862,836
Other 8,531,701 (8,531,701)
Net changes $ 43,219,401 $36,787,962 $6,431,439
Balance at June 30, 2020 $594,650,754 $187,384,505 $407,266,249
Sensitivity of the net OPEB liability to changes in the discount rate - 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 discount rate that is 1-percentage-point lower (6.00%) or I-
percentage-point higher (8.00%) than the current discount rate:
1% Decrease Current Discount I% Increase
County's net OPEB liability (6.00%) Rate(7.00%) (8.00%)
$504,650,754 $187,384,505 $407,266,249
Sensitivity of the net OPEB 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 I-
percentage-point lower or I-percentage-point higher than the current healthcare cost trend
rate:
1% Decrease Current Healthcare Cost Trend Rate 1% Increase
County's net OPEB liability $327,882,420 $407,266,249 $510,047,985
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
For the year ended June 30, 2020, the County recognized OPER expense of $33,407,562. At
June 30,2020,the County reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources:
Deferred Outflowsof Resources Deferred Inflows of Resources
Difference between expected and actual experience $ 7,885,842 $ 2,613,883
Changes of assumptions 6,737,018
Net difference between projected and actual earnings on
OPEB plan investments 2,134,751
County contributions subsequent to the measurement date 41,604,474
Total $58,362,085 $2,613,883
$41,604,474 reported as deferred outflows of resources related to the County's contributions
to the OPER plan subsequent to the measurement date will be recognized as a reduction of the
net OPEB liability in the fiscal year ended June 30, 2021.
Other amounts reported as deferred outflows of resources and deferred inflows of resources
related to pensions will be recognized in pension expense as follows:
Fiscal Year Ending June 30, Net deferred outflows of resources
2021 $2,384,727
2022 2,384,728
2023 2,919,876
2024 2,942,608
2025 2,076,702
Thereafter 1,435,087
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 2121, Honolulu, HI 96805-2121.
Deferred Compensation Plan
County employees are permitted to participate in a deferred compensation plan of the State of
Hawaii,adopted pursuant to Internal Revenue Code (IRC) section 457. The plan permits
eligible employees to defer a portion of their salary until future years by contributing to a fund
96
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
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, 2020, the carrying amount of cash,time certificates of deposit and money market
funds of $42,551,340, with bank balances of $43,261,291 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 $888,225 at June 30, 2020.
At June 30, 2019, the Department had $22,000,000 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.
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
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
The capital assets of the Department at June 30, 2020 were as follows:
Utility plant in service $516,049,178
Less: accumulated depreciation (276,541,289)
239,507,889
Preliminary survey and investigation charges 6,417,849
Construction work in progress 50,320,130
Land and rights 5,261,319
Net capital assets $301,507,187
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 $22,198,633 at June
30, 2020.
General obligation bonds payable issued on behalf of the Department and other long-term debt
at June 30, 2020 are comprised of the following:
Public improvement bonds:
2008 Series A at 4.125%, due through 2043 $ 120,792
2010 Series B at 3.33% to 6.1%, due through 2030 4,403350
Total public improvement bonds 4,524,542
Public improvement refunding bonds:
2007 Series C at 4.0% to 5.0%, due through 2021 1,250,341
2016 Series B at 3.0% to 5.0%, due through 2026 10,070,000
2016 Series E at 2.0% to 5.0%, due through 2029 6,353,750
Revolving fund loans:
State revolving fund loans, interest up to 1.37%,
due through 2038 42,909,525
Total long-term debt 65,108,158
Add: Unamortized premium 1,325,535
Total $66,433,693
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
At June 30, 2020, future principal and interest payments for long-term debt are scheduled as
follows:
Fiscal year ending June 30: Princinai Interest Total
2021 $ 5,828,067 $1,635,044 $7,463,111
2022 5,950,883 1,427,219 7,378,102
2023 4,937,015 1,235,745 6,172,760
2024 5,085,892 1,069,450 6,155,342
2025 5,232,673 903,665 6,136,338
2026-2030 22,303,427 2,421,375 24,724,802
2031-2035 11,160,520 655,105 11,815,625
2036-2040 4,586,971 93,748 4,680,719
2041-2044 22,710 1,895 24,605
Total $65,108,158 $9,443,246 $74,551,404
Contributions in Aid of Construction
The Department recognized $3,202,379 of contributions in aid of construction for the fiscal
year ended June 30, 2020.
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, 2020 for workers' compensation claims of $660,000
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 $42,807,730 at
June 30, 2020.
Pension Plan
Pension liabilities, pension expense, and deferred outflows of resources and deferred
inflows of resources related to pensions—At June 30, 2020, the Department reported a
liability of $32,029,248 for its proportionate share of the net pension liability. The net pension
liability was measured as of June 30,2019,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.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
At June 30, 2019, the Department's proportion was .23%, which decreased by 0.02% from its
proportion measured as of June 30, 2018.
For the year ended June 30, 2020, the Department recognized pension expense of $4,855,184.
At June 30, 2020, the Department reported deferred outflows of resources and deferred
inflows of resources related to pensions from the following sources:
Deferred Outflows Inflows of Resources Deferred of Resources
Differences between expected and actual experience $560,393 $64,104
Net difference between projected and actual investment
earnings on pension plan investments -- 87,921
Changes in assumptions 2,180,671 --
Changes in proportion and differences between employer
contributions and proportionate share of contributions 2,442,051 2,602,620
Department contributions subsequent to the measurement date 2,258,593
$7,441,708 $2,754,645
Total
The $2,258,593 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, 2021.
Other amounts reported as deferred outflows of resources and deferred inflows of resources
related to pensions will be recognized in pension expense as follows:
Fiscal Year Ending June 30 Net Deferred Outflows (Inflows) of Resources
2021 $ 1,458,414
2022 888,038
2023 306,430
2024 (81,909)
2025 (142,503)
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
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2020
share of the net pension liability would be if it were calculated using a discount rate that is 1-
percentage-point lower (6.00%) or 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 $41,554,140 $32,029,248 $25,171,502
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, 2020,the annual amount payable to the ERS
totaled $239,615, which represents the employer contribution for the month of June 2020, as
required by HRS.
Post-Retirement Benefits Other than Pensions (OPEB)
Net OPEB liability, OPEB expense, and deferred ouy7ows of resources and deferred inflows
of resources related to OPEB—At June 30, 2020,the Department reported a net OPEB
liability of $16,079,747. The net OPEB liability was measured as of July 1, 2019, and the
total OPEB liability used to calculate the net OPEB liability was determined by an actuarial
valuation as of that date. For the year ended June 30, 2020, the Department recognized OPEB
expense of $1,229,776.
At June 30, 2020,the Department reported deferred outflows of resources and deferred
inflows of resources related to pensions from the following sources:
Deferred Outflow of Resources Deferred Inflows of Resources
Difference between expected and actual experience $ $ 1,093,632
Changes of assumptions 418,394
Net difference between projected and actual earnings on OPEB
plan investments 255,967
Employer contributions subsequent to the measurement date 1,977,000
Total $2,651,361 $1,093,632
$1,977,000 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 OPEB liability in the fiscal year ended June 30, 2021.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
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:
Fiscal YearEnding June 30, Net Deferred Inflows of Resources
2021 $ 106,916
2022 106,918
2023 47,201
2024 44,770
2025 98,134
Thereafter 15 332
$419,271
Sensitivity of the net OPEB liability to changes in the discount rate—The following presents
the net OPEB liability of the Department,as well as what the Department's net OPEB liability
would be if it were calculated using a discount rate that is I-percentage-point lower (6.00%) or
I-percentage-point higher (8.00%) than the current discount rate:
1% Decrease (6.00%) Current Discount Rate (7.00%) 1% Increase (8.00%)
Department's net OPEB liability $21,678,839 $16,079,747 $11,620,115
Sensitivity of the net OPEB liability to changes in the healthcare cost trend rates- The
following presents the net OPEB liability of the Department, as well as what the Department's
net OPEB liability would be if it were calculated using a healthcare cost trend rate that is 1-
percentage-point lower or I-percentage-point higher than the current healthcare cost trend
rate:
1% Decrease Current Healthcare Cost Trend Rate 1% Increase
Department's net OPEB liability $11,367,109 $16,079,747 $22,124,313
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 2121, Honolulu, HI 96805-2121.
102
COUNTY OF HAWAII
Required Supplementary Information
June 30, 2020
Schedule of Changes in the Net OPEB Liability and Related Ratios
Last 10 Fiscal Years*
2020
Total OPEB Liability County Department
Service Cost $12,402,599 $746,672
Interest on the total OPEB liability 38,381,475 2,349,959
Benefit payments (18,651,726) (1,012,084)
Difference between expected and actual
experience 9,224,217 (314,598)
Change in assumptions 1,862,836 137,542
Net change in total OPEB liability 43,219,401 1,907,491
Total OPEB liability- Beginning 551,431,353 33,703,543
Total OPEB liability - Ending $ 594,650,754 $35,611,034
Plan fiduciary net position
Contributions-employer $39,770,000 $1,990,000
Net investment income 7,187,610 764,696
Benefit payments (18,651,726) (1,012,084)
Administrative expense (49,623) (5,493)
Other 8,531,701 522,371
Net change in plan fiduciary net position 36,787,962 2,259,490
Plan fiduciary net position - Beginning 150,596,543 17,271,797
Plan fiduciary net position- Ending $187,384,505 $19,531,287
Net OPEB liability $ 407,266,249 $16,079,747
Plan fiduciary net position as a percentage of
the total OPEB liability 31.5% 54.9%
Covered-employee payroll $185,575,775 $10,264,425
Net OPEB liability as a percentage of
Covered-employee payroll 219.5% 156.7%
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COUNTY OF HAWAII
Required Supplementary Information
June 30, 2020
2019
County 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 7.240 956 432,233
Net change in total OPEB liability 33,656,439 1,193,988
Total OPEB liability - Beginning 517,774914 32,509555
Total OPEB 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 1,111,306
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 126,320,614 15,243,827
Plan fiduciary net position - Ending $ 150,596,543 $ 17,271,797
Net OPEB liability $ 400,834,810 $ 16,431,746
Plan fiduciary net position as a percentage of
the total OPEB liability 27.3% 51.3%
Covered-employee payroll $ 178,889,344 $ 10,212,595
Net OPEB liability as a percentage of
Covered-employee payroll 224.1% 160.9%
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COUNTY OF HAWAII
Required Supplementary Information
June 30, 2020
2018
County Department
Total OPEB Liability
Service Cost $ 11,757,502 $ 687,414
Interest on the total OPEB liability 34,046,407 2,135,490
Benefit payments (17,054,407) (953,288)
Net change in total OPEB liability 28,748,922 1,869,616
Total OPEB liability- Beginning 489,025992 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 16,37
Net change in plan fiduciary net position 22,118,934 2,174,034
Plan fiduciary net position - Beginning 104,201,680 13,069,793
Plan fiduciary net position - Ending $ 126,320,614 $ 15,243,827
Net OPEB liability $ 391,454,300 $ 17,265,728
Plan fiduciary net position as a percentage of
the total OPEB liability 24.4% 46.9%
Covered-employee payroll $ 172,678,405 $ 9,791,132
Net OPEB liability as a percentage of
Covered-employee payroll 226.70% 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
- 105 -
COUNTY OF HAWAII
Required Supplementary Information
June 30, 2020
Schedule of Contributions (OPEB) Last 10 Fiscal Years
Fiscal Year Ended Actuarially Determined Contributions Contributions in Relation to the Actuarially Determined Contribution Contribution Definicieny (Excess Covered Employee Payroll Contributions as a %age of Covered Employee PayrollPayroll
June 30 2020 $ 41,464,000 $ 41,604,474 $ 140,474 $ 189,053,873 22.0%
June 30, 2019 $ 39,770,000 $ 39,770,000 $ -- $ 185,575,775 21.4%
June 30, 2018 $ 37,748,000 $ 32,829,013 $4,918,987 $ 178,889,344 21.1%
June 30, 2017 $36,472,000 $ 28,549,987 $ 7,922,013 $ 172,678,405 21.1%
June 30, 2016 $33,614,000 $ 22,747,340 $ 10,866,660 $59,744,324 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 $ 13,730,009 $22,463,000 $ 124,452,126 11.0%
June 30, 2011 $ 34,969,000 $ 31,104,000 $ 3,865,000 $127,859,606 24.3%
Department:
Fiscal Year Ended Actuarially Determined Contributions Contributions in Relation to the Actuarially Determined Contribution Contribution Definicieny (Excess Covered Employee Payroll Contributions as a %age of Covered Employee PayrollPayroll
June 30, 2020 $ 1,977,000 $ 1977000 $ $10,970,714 18.0%
June 30, 2019 $ 1,990,000 $ 1,990,000 $10,264,425 19.3%
June 30, 2018 $ 1,933,000 $ 1,936,548 ($ 3,548) $10,212,595 19.0%
June 30, 2017 $ 1,867,000 $ 1,867,788 788 $9,791,132 19.1%
June 30, 2016 $ 1,914,000 $ 1,913,204 $ 796 $9,464,649 20.2%
June 30, 2015 $ 1,850,000 $ 1,848,389 $ 1,611 $9,426,509 19.6%
June 30, 2014 $ 1,899,000 $ 1,900,758 ($ 1,758) $8,635,402 22.0%
June30, 2013 $ 1,834,000 $ 1,833,733 $ 267 $ 7,966,529 23.0%
June 30, 2012 $ 2,400,000 $ 2,401,487 ($ 1,487) $ 8,182,968 29.4%
June 30, 2011 $ 2,319,000 $ 2,067678 $ 251,322 $8,056,398 25.7%
See accompanying notes to required supplementary information
- 106 -
COUNTY OF HAWAII
Required Supplementary Information
June 30, 2020
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 I of each year.
The following summarizes the significant methods and assumptions used to determine the
actuarially determined contribution for the fiscal year ended June 30, 2020:
Actuarial valuation date July 1, 2018
Actuarial cost method Entry Age Normal
Amortization method Level percent,closed
Equivalent single amortization period 19.3 and 17.9 for the County and Department,
respectively
Asset valuation method Smoothed
Inflation rate 2.50%
Investment rate of return 7.00%
Payroll growth 3.50%
Salary increases 3.50%to 7.00% including inflation
Healthcare cost trend rates
PPO Initial rates of 10.00%; declining to a rate of
4.86% after 13 years
HMO Initial rate of 10.00%;declining to a rate of
4.86%after 13 years
Part B Initial rate of 4.00% and 5.00%; declining to a
rate of 4.70%after 12 years
Dental 5.00% for the first 3 years; then 4,00% for all
future years
Vision 0.00% for the first 3 years;then 2.50% for all
future years
Life Insurance 0.00%
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COUNTY OF HAWAII
Required Supplementary Information
June 30, 2020
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 utilizing scale
BB to project generational mortality improvement
Participation rates 98% healthcare participation assumption for
retirees that receive 100% of the Base Monthly
Compensation. Healthcare participation rates of
25%, 65%, and 90% for retirees that receive 0%,
50%, or 75% of the base monthly contribution,
respectively. 100% for life insurance and 98%
for Medicare Part B.
There were no other factors that significantly affected trends in the amounts reported in the
schedule of changes in the net OPER liability and related ratios or the schedule of contributions
(OPER).
- 108 -
COUNTY OF HAWAII
Required Supplementary Information
June 30, 2020
Schedule of the County's and Department's Proportionate Share
of the Net Pension Liability (ERS)
Last 10 Fiscal Years
County:
Proportionate
Share of the Plan
County's County's Net Pension Fiduciary Net
Proportion of Proportionate Liability as a Position as a
the Net Share of the County's %age of %age of the
Measurement Pension Net Pension Covered Covered Total Pension
Period Ended Liability(%) Liability ($) Payroll Payroll Liability
June 30, 2019 4.7% $669,213,164 $172,197,101 388.1% 54.9%
June 30, 2018 4.8% $635,693,501 $168,484,880 377.3% 55.5%
June 30, 2017 4.7% $609,904,199 $163,626,447 372.7% 54.8%
June 30, 2016 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% $377,065,856 $129,153,763 292.0% 58.0%
Department:
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 %age of %age of the
Measurement Pension Net Pension Covered Covered Total Pension
Period Ended Lia I Liabili
June 30,2019 0.2% $ 32,029,248 $10,318,136 310.4% 54.9%
June 30, 2018 0.3% $ 33,522,053 $ 9,742,400 344.1% 55.5%
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, 2014 0.3% $ 20,526,993 $ 8,272,307 248.1% 63.9%
June 30, 2013 0.2% $ 18,469,400 $ 7,640,477 241.7% 58.0%
* This schedule is intended to present information for 10 years, as of the measurement date 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
. 109 -
COUNTY OF HAWAII
Required Supplementary Information
June 30, 2020
Schedule of the Employer Pension Contributions (ERS)
Last Ten Fiscal Years
County:
Actual
County Contributions
Statutorily Contributions Contribution as a%age of
Fiscal Year Required Recognized Deficiency County's Covered
Ended Contribution Covered Pa roll Paro11
June,— 30,2020 $ 52,778,035 52,778,035 $ $ 180,285,326 29.3%
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 30,2016 $ 34,013,001 $ 34,013,001 $ $ 156,556,514 21.7%
June 30, 2015 $ 31,456,148 $ 31,456,148 $ $ 149,760,317 21.0%
June 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%
Department:
Actual
County Contributions
Statutorily Contributions Contribution as a%age of
Fiscal Year Required Recognized Deficiency County's Covered
Ended Contribution by the Plan Excess) Covered Pa roll Pa roll
June 30,2020 $ 2,258,593 $ 2,258,593 $ 10,439,473 21.6%
June 30, 2019 $ 1,950,358 $ 1,950,358 $ $ 10,318,136 18.9%
June 30,2018 $ 1,757,461 $ 1,757,461 $ $ 9,742,400 18.0%
June 30,2017 $ 1,603,278 $ 1,603,278 $ $ 9,358,187 17.1%
June 30,2016 $ 1,553,128 $ 1,553,128 $ $ 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 $ $ 7,640,477 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%
See accompanying notes to required supplementary information
- 110-
COUNTY OF HAWAII
Required Supplementary Information
June 30, 2020
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 June 30,2017), there were
no other factors, including the use of different assumptions that significantly affect trends reported
in these schedules.
COUNTY OF HAWAII
Required Supplementary Information
June 30, 2020
Schedule of Changes in Total Pension Liability (Bandsmen Pension)
Last Ten Fiscal Years*
Measurement year ending 2020 2019 2018 2017
June 30,
Total Pension Liability
Service Cost $ 7,577 $ 7,392 $ — $ 16,416
Interest on the Total
Pension Liability 29,250 38,149 — 36,289
Differences between
expected and actual
experience -- (89,947) --Assumption Changes 87,065 (44,293) (113,807)
Benefit Payments --(49,612) (47,532) (58.808) (53,347)
Net Change in Total
Pension Liability 74,280 (136,231) (58,808) (114,449)
Total Pension Liability—
Beginning 951,741 1,087,972 1 146.780 1,261,229
Total Pension Liability—
Ending $1,026,021 $951,741 $1,087,972 $1,146,780
Covered Payroll $ 26,349 $ 26,349 $ 49,505 $ 49,505
Total Pension Liability as
a Percentage of Covered
Employee Payroll 3,894.0% 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
- 112 -
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 Ees
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 fora geothermal relocation program and to benefit the lower Puna area.
BEA UTIFICA TION 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 8pneral 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 Wneral 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.
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- 113-
COUNTY QFHAWAII
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2020
Special ReveFunds
Highway Fund Sewer Fund Solid Waste Fund Cemetery Fund Parking Meter Fund Vehicle Disposal Fund
Assets
Cash and cash equivalents $ 18,171,640 $11,350,492 $12,912,585 $ 161,909 $314,650 $11,000,536
Investments - - - - - -
|mpn:a|yund - 400 250
Receivables:
Due from other governments 3,698,703 348,983 435,683 - - -
Due from other govemmenru| funds 499,206 73,151 68,695 - - 1,058
Due from other nongovernmental funds - 4,000 - - - -
Trade net allowance for doubtful accounts ' 1,723,643 898,812 - - -
Other - - -
4,197,914 2,049,777 1,394,950 1,058
Total assets $22,369,554 $13,408,669 14,307,785 161,909 314,650 11,001,594
Liabilities, Deferred Inflows and Fund Balances
Liabilities-
Accounts payable
$ 602,041 $ 293,235 $ 2,519,059 $ - $ - $ 193,122
Accrued payroll 764,083 213,376 461,548 - - 5.919
Due to other governmental funds 533,293 475,199 779,085 - - 51,187
Advance Collections-Intergovernmental 149,254 - 11,998 - - -
Other .
Total liabilities
Deferred Inflows of Resources
Unavailable Revenue
Fund balances:
Restricted for:
Debt service
Highways.streets and abandoned vehicles 20,319,863 - - - - -
Housing and rental assistance - - - - - -
Committed to:
Sanitation - 10,640,941 9,645,492
Aighwuyastreets and abandoned vehicles - - - - 314650 10,751,366
Rental assistance and subsidy - - - - - -
Cemetery - - - 161,909 - -
Golf Course - - - - - -
Lower Puna area - - - - - -
Parks and recreational projects - - - - - -
Total fund balances 20,319,863 10,640,941 9,645,492 161,909 314,650 10,751,366
Total liabilities, deferred inflows
and fund balances S 22,369,554 $13,408,669 114,307,785 S 161,909 $314,650 $11,001,594
114
Special Revenue Funds
Bikeway Fund Workforce Innovation & Opport Fund Golf Course Fund Geothermal Reloc & Community Benefits Fund Beautification Fund Hawaii County Housing Agency Park Dedication Fund
$633,885 $ $ 170,869 $ 4,274,235 $ 468,303 $ 3,855,753 $ 48,238
- - - - 12,737
- 2,000 800 -
- 174,100 - 107,772
27,000 - 3,046 144,804
38,993 330 117,790 93
27,000 213,093 3,376370,366 93
-- --- --------- --------
$660,885 $ 213,093 $ 176,245 $ 4,274,235 $ 468,303 $ 4,226,919 $ 61,068
$ 724 $ - $ 5,455 $ - $ 2,175 $ 142,268 $
- - 53,357 211,186
213,093 81,531 44,295
- - 430,430
- - -- ------- ------------ 363,279 ...........
-
724 213,093 58,812 83,706 1,191,458.
115,182
................ ............. . ..............
660,161 384,597
- 1,652,453
1,267,826
117,433
- 4,274,235
61,068
660,161 117,433 4,274,235 384
---- ------- . . 1
........................ ..... ....................... 597 2 920,279 61,068
......
$660,885 $1 213,093 176,245 4,274,235 $ 468,303 14,226,919 $ 61,068
(Continued)
115 -
COJUNTY0FHAWAII
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2020
(Concluded)
Special Revenue Funds Debt Service Fund
General Excise Tax Fund Short-term Vacation Rental Interest Fund Bond Redemption Fund Total Nonmajor Governmental Funds
Assets
Cash and cash equivalents $ 6,499,784 $ 1,762,364 $2,794,332 $ 5,114,477 $ 79,542,052
Investments - ' 2,408,000 28,785,737 31,198,474
Imprest fund - ' - - 3,450
Receivables:
Due from other governments 14 29,449 - - - 18,694,695
Due from other governmental funds 1,601,687 - - - 2,418,607
Due from other nongovernmental funds - - - - 4,008
Trade.net allowance for doubtful accounts - - - - 2,614,255
Other 57,416
- - 210
15,631,136 - 210 23,888,973
Total assets $22,130,920 1,762,364 5,194,542 33,900,214 134,632,949
.
Liabilities,Deferred Inflows and Fund Balances
Liabilities:
Accounts payable $ 196,940 $ 2.220 % - $ - $ 3,957,239
Accrued payroll 57,960 13,747 - - 1,780,148
Due to other governmental funds 6,340,360 11,264 - - 8,529,307
Advance Collections-Intergovernmental - - - - 591,682
Other _____512 - 63,199 185,000 676,305
Total liabilities 27 63,199 185,000 15,534,681
Deferred Inflows of Resources
Unavailable Revenue 2,729,436
Fund balances:
Restricted for:
Debt service - - 5,131.343 33,715,214 30,846,557
Highways,streets and abandoned vehicles 15,535.148 - - - 36,899,769
Housing and rental assistance - 1,735,133 ' - 3,387,586
Committed to:
Sanitation - - - - 20,286`433
Highways streets and abandoned vehicles - - - - 11.066.016
Rental assistance and subsidy ' - - - 1.267,826
Cemetery - - - - 161,909
Golf Course - - - - 117,433
Lower Puna area ' - - - 4,274,235
Parks and recreational projects
------ --- ------ - -----__- _ 61,068
Total fund balances 15,535,148 1,735,133 5,131,343 33,715,214 116,368,832
Total liabilities, deferred inflows
and fund balances $22,130,920 1,762,364 $5,194,542 $33,900,214 $134,632,949
See accompanying independent auditors' report.
- 116 -
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- j 17-
COUNTY OF HAWAII
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Fiscal Year Ended June 30, 2020
Special Revenue Funds
Highway Fund Sewer Fund Solid Waste Fund Cemetery Fund Parking Meter Fund
Revenues
Fuel taxes $ 20,108,062 $ - $ - $ - $
Public utility franchise taxes 9,364,811 - - - -
Licenses and permits 12,042,878 - - - -
General excise tax surcharge
Intergovernmental 1,956,861 76,073 690,029 - -
Charges for services - 10,186,681 13,507,604 - 15,591
Investment earnings (loss) - - - - -
Other 307,763 8,272 146,997 9,500 -
Total revenues 43,780,375 10,271,026 14,344,630 9,500 15,591
Expenditures
Current:
General Government 342,834 - - - -
Public safety 10,339,473 - - - -
Highways and streets 17,962,409 - - - -
Health,education and welfare - - - -
Culture and recreation - -
Sanitation - 10,058,737 30,896,540 - -
Pension and retirement contributions 3,514,100 984,783 2,102,574 - -
Employees' health insurance 1,361,056 317,356 823,923 - -
Other 1,032,145 458,024 471,087 - -
Debt service:
Principal 510,902 181,466 1,365,448 - -
Interest 59,675 21,488 139,250 - -
Total expenditures 35,122,594 12,021,854 35,798,822 - -
Excess (deficiency) of revenues
over (under) expenditures 8,657,781 (1,750,828) 211454,192) 9,500 15,591
Other Financing Sources (Uses)
Transfers in - 2,586,419 19,862,687 - -
Increases in capital leases 179,377 1,139,583 - - -
Transfers out (3,373,356) - - -
Total other financing sources (uses) (3,193,979) 3,726,002 19,862„687 - -
Net change in fund balances 5,463,802 1,975,174 (1,591,505) 9,500 15,591
Fund balances at beginning of year 14,856,061 8,665,767 11,236,997 152,409 299,059
Fund balances at end of year $ 20,319,863 $10,640,941 $ 9,645,492 $ 161,909 $314,650
- 118
Special Revenue Funds
Vehicle Workforce Golf Geothermal Reloc, Beauti- Hawaii County Park
Disposal Bikeway Innovation & Course & Community fication Housing Dedication
Fund Fund Opport Act Fund Fund _Denerits Fund _ Fund _ Agency _ Fund
$ - $ - $ - $ - $ ~ % $ -
2,364,625 52,914 ~ - - 197,043 - '
- ~
798,620 - ~ - 21,832,097 '
4.957 - ~ 593,117 - - - -
~ ~ - - - ' 3,811 772
2,373,043 52,914 _ 197,043 22,392,943 772
- 43,123 - - - 138,082 ' -
~ - 798,629 ' ~ - 22,335,523 '
- - - 1,027,701 - 140,047 - -
1,652,101 - ~ - ' - - -
26,220 - - 262,404 - - 044,992 -
11,325 ~ - 120,979 ~ - 961,792 '
' - ~ - - - 5,536 -
- ' - 37,278 - - 7,911 -
' - - 4,940 - ' 315 -
_____ _____
798,620 1,453,302 278,129 23,556,029
683,388 9,791 (860,175) (81,086) (1,163,086) 772
1,000,205 1,517,810
(31,055)
(298,787) (31,055)
(298,787) 1,000,205 1,517,810
384,681 9,791 - 140,830 - (81,086) 354,724 (30,283)
$10,751,366 660,161 -$117,433 $4,274,235 $384,597 $2,920,279 $61,068
(Continued)
- 119 -
COUNTY OF HAWAII
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Fiscal Year Ended June 30, 2020
(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
.......................................................... .Funds..
Revenues
Fuel taxes $ $ $ $ $ 20,108,062
Public utility franchise taxes - 9,364,811
Licenses and permits 1,788,250 16,445,710
General excise tax surcharge 35,537,945 - 35,537,945
Intergovernmental - 340,967 25,694,656
Charges for services 24,307,960
Investment earnings (loss) 50,260 54,843
Other - 1,033,028
......................... ................................. .......................... ......................... ..............................
Total revenues 35,5
37,945 1,788,250 391,227 132,547,015
Expenditures
Current:
General Government - 293,966 636,800
Public safety - - 10,339,473
Highways and streets 5,419,900 23,563,514
Health, education and welfare - - 23,134,152
Culture and recreation - 1,167,748
Sanitation - - - 42,607,378
Pension and retirement contributions 268,781 8,694 - 8,012,517
Employees'health insurance 80,253 1,608 3,078,292
Other 15,044 - - 1,981,836
Debt service:
Principal 25,592,211 27,695,216
Interest - - 18,276,271 - 18,501,939
Total expenditures 5,783,978 304,268 18,276,271 25,592,211 160,718,865
Excess (deficiency) of revenues
over (under) expenditures 29,753,967 1,483,982 (17,885,044) (25,592,211) (28,171,850)
Other Financing Sources (Uses)
Transfers in - 19,368,409 29,744,044 74,079,574
Increases in capital leases - 1,318,960
Transfers out (20,260,000) - - - (23,963,198
Total other financing sources (uses) (20,260,000) - 19,368,409 29,744,044 51,435,336
Net change in fund balances 9,493,967 1,483,982 1,483,365 4,151,833 23,263,486
Fund balances at beginning of year 6,041,181 251,151 3,647,978 29,563,381 93,105,346
Fund balances at end of year $15,535,148 1,735,133 $ 5,131,343 $33,715,214 116,368,832
See accompanying independent auditors'report.
- 120 -
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, 2020
Original Budget Final Budget Actual (Budgetary Basis) Variance Positive (Negative)
Revenues:
Taxes:
Fuel taxes $23,209,658 $ 23,209,658 $20,108,062 $(3,101,596)
Public utility franchise taxes 8,000,000 8,000,000 9,364,811 1,364,811
Total taxes 31,209,658 31,209,658 29,472,873 (1,736,785)
Licenses and permits-motor vehicle weight taxes 12,000,000 12,000,000 12,042,878 42,878
Intergovernmental 1,375,000 1,375,000 2,106,115 731,115
Charges for services 410,000 410,000 205,065 (204,935)
Other 130,000 135,000 102,698 (32,302)
Total revenues 45,124,658 45,129,658 43,929,629 (1,200,029)
Expenditures:
General government-engineering 894,248 1,386,779 598,667 788,112
Public safety-police traffic enforcement 1,318,815 1,318,815 1,185,130 133,685
Public safety-protective inspection 41,700 49,169 45,166 4,003
Public safety-traffic engineering 9,938,757 10,788,757 9,443,179 1,345,578
Highways and streets 16,956,293 16,661,293 12,601,829 4,059,464
Highways and streets-mass transit 7,447,185 7,447,185 7,398,172 49,013
Pension and retirement contributions 3,609,000 3,759,000 3,461,985 297,015
Employees'health insurance 1,700,000 1,550,000 1,348,434 201,566
Other 2,022,000 1,822,000 923,512 898,488
Total expenditures 43,927,998 44,782,998 37,006,074 7,776,924
Excess (deficiency) of revenues over (under)
expenditures 1,196,660 346,660 6,923,555 6,576,895
Other financing sources (uses)-transfers in (out)-
Transfers out-Capital Projects Fund (3,900,000) (3,900,000) (3,373,356) 526,644
Deficiency of revenues and other sources
under expenditures and other uses (2,703,340) (3,553,340) 3,550,199 7,103,539
Fund balance at beginning of year 14,856,061 14,856,061 14,856,061 -
Fund balance at end of year $12,152,721 $ 11,302,721 $ 18,406,260 $ 7,103,539
See accompanying independent auditors'report.
121 -
COUNTY OF HAWAII
Sewer Fond
Schedule of Revenues, Expenditures, and Changes in Fund Balance-
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2020
Original Budget Final Budget Actual (BudgetaryBasis) Positive Variance (Negative)
Revenues:
Intergovernmental $ - $ - $ 76,073 $ 76,073
Charges for services-sewer fees 9,562,200 9,562,200 10,186,681 624,481
Other - - 8,272 8,272
Total revenues 9,562,200 9,562,200 10,271,026 708,826
Expenditures:
Sanitation 13,243,750 13,243,750 11,656,721 1,587,029
Pension and retirement contributions 1,236,673 1,236,673 979,136 257,537
Employees`health insurance 584,832 554,832 316,213 238,619
Other 681,000 711,600 303,468 408,132
Total expenditures 15,746,255 15,746,855 13,255,538 2,491,317
Deficiency of revenues under expenditures (6,184,055) (6,184,655) (2,984,512) 3,200,143
Other financing sources:
Transfers in-General Fund 2,586,419 2,586,419 2,586,419 -
Excess (deficiency) of revenues and other
sources over (under) expenditures (3,597,636) (3,598,236) (398,093) 3,200,143
Fund balance at beginning of year 8,665,767 8,665,767 8,665,767 -
Fund balance at end of year $ 5,068,131 $ 5,067,531 $ 8,267,674 $ 3,200,143
See accompanying independent auditors'report.
- 122 -
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, 2020
Original Budget Final Budget Actual (Budgetary Basis) Variance Positive (Negative)
Revenues:
Intergovernmental $ 729,883 $ 729,883 $ 616,470 $ (113,413)
Charges for services-tipping fees 12,118,000 12,118,000 13,507,604 1,389,604
Other 226,104 226,104 146,997 (79,107)
Total revenues 13,073,987 13,073,987 14,271,071 1,197,084
Expenditures:
Sanitation 32,968,214 32,998,214 31,141,638 1,856,576
Pension and retirement contributions 2,119,967 2,119,967 2,082,732 37,235
Employees'health insurance 854,400 854,400 821,014 33,386
Other 791,950 761,950 494,882 267,068
Total expenditures 36,734,531 36,734,531 34,540,266 2,194,265
Deficiency of revenues under expenditures (23,660,544) (23,660,544) (20,269,195) 3,391,349
Other financing sources:
Transfers in-General Fund 19,862,687 19,862,687 19,862,687 -
Excess (deficiency) of revenues and other
sources over (under) expenditures (3,797,857) (3,797,857) (406,508) 3,391,349
Fund balance at beginning of year 11,236,997 11,236,997 11,236,997 -
Fund balance at end of year $7,439,140 $7,439,140 $10,830,489 $3,391,349
See accompanying independent auditors'report
- 123 -
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 30,2020
Original Budget Final Budget Actual (Budgetary Basis) Positive Variance(Negative)
Revenues-other-sale of cemetery plots $ 10,000 $ 10,000 $ 9,500 $ (500)
Expenditures-health, education and welfare 10,000 10,000 10,000
Excess of revenues over expenditures - - 9,500 9,500
Fund balance at beginning of year 152,409 152,409 152,409 -
Fund balance at end of year $ 152,409 $ 152,409 $ 161,909 $ 9,500
See accompanying independent auditors' report.
- 124 -
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, 2020
Original Budget Final Budget Actual (Budgetary Basis) Positive Variance (Negative)
Revenues-Charges for services-highways and streets $ - $ - $ 15,591 $ 15,591
Excess of revenues over expenditures - - 15,591 15,591
Fund balance at beginning of year 299,059 299,059 299,059 -
Fund balance at end of year $299,059 $ 299,059 $314,650 $ 15,591
See accompanying independent auditors' report.
- 125 -
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, 2020
Original Budget Final Budget Actual (Budgetary Basis) Variance Positive (Negative)
Revenues:
Licenses and permits-vehicle disposal fee $2,300,000 $ 2,300,000 $ 2,364,625 64,625
Charges for services-towing charges 2,000 2,000 4,957 2,957
Miscellaneous 21,200 21,200 3,460 (17,740)
Total revenues 2,323,200 2,323,200 2,373,042 49,842
Expenditures:
Sanitation 2,901,510 2,901,510 1,367,489 1,534,021
Pension and retirement contributions 37,600 37,600 26,426 11,174
Employees'health insurance 25,000 25,000 11,494 13,506
Other 8,500 8,500 8,500
Total expenditures 2,972,610 2,972,610 1,405,409 1,567,201
Excess (deficiency) of revenues
over (under) expenditures (649,410) (649,410) 967,633 1,617,043
Other financing (uses) - transfers (out)-
Transfers out-Serial Bond Redemption Fund (325,000) (325,000) (247,352) 77,648
Transfers out-Interest Fund (90,000) (90,000) (51,434) 38,566
Deficiency of revenues and other sources
under expenditures and other uses (1,064,410) (1,064,410) 668,847 1,500,829
Fund balance at beginning of year 10,366,765 10,366,765 10,366,765 -
Fund balance at end of year $9,302,355 9,302,355 11,035,612 1,500,829
See accompanying independent auditors'report.
- 126 -
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, 2020
Variance
Original Budget Final Budget Actual (Budgetary Basis) Variance Positive (Negative)
Revenues-licenses and permits-bicycle tax $ 73,000 $ 73,000 $ 52,914 $ (20,086)
Expenditures-highways and streets 226,000 226,000 28,000 198,000
Excess (deficiency) of revenues over (under)
expenditures (153,000) (153,000) 24,914 177,914
Fund balance at beginning of year 650,370 650,370 650,370
Fund balance at end of year $497,370 $497,370 $675,284 $177,914
See accompanying independent auditors' report.
127
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, 2020
Original Budget Final Budget Actual (Budgetary Basis) Variance Positive (Negative)
Revenues-intergovernmental $ - $ 1,218,978 $ 531,206 $ (687,772)
Expenditures:
Health, education and welfare - 1,218,978 543,175 675,803
Pension and retirement contributions - - (11,569) 11,569
Employees' health insurance - - 400
Total expenditures - 1218,978 531,206 687,772
Excess ofrevenues over expenditures - - - -
Fund balance at beginning of year ' - - -
Fund balance and end of year $ - $ - $ - $ -
See accompanying independent auditors' report.
- 128 -
COUNTY OF HAWAII
Golf Course Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance-
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2020
Original Budget Final Budget Actual (Budgetary Basis) Variance Positive (Negative)
Revenues:
Charges for services $ 852,277 $ 502,277 $ 593,127 $ 90,850
Expenditures:
Culture and recreation 1,093,604 1,118,380 1,067,178 51,202
Pension and retirement contributions 260,102 262,302 261,468 834
Employees' health insurance 118,000 120,600 120,504 96
Other 30,776 1,200 - 1,200
Total expenditures 1,502,482 1,502,482 1,449,150 53,332
Deficiency of revenues under expenditures (650,205) (1,000,205) (856,023) 144,182
Other financing sources:
Transfers in-General Fund 650,205 1,000,205 1,000,205 -
Excess of revenues and other sources
over expenditures - - 144,182 144,182
Fund balance at beginning of year (22,597) (22,597) (22,597) -
Fund balance at end of year $ (22,597) $ (22,597) $ 121,585 $ 144,182
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.
- 129-
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, 2020
Original Budget Final Budget Actual (Budgetary Basis) Variance Positive (Negative)
Revenues
Miscellaneous:
Geothermal royalties $ 300,000 $ 300,000 $ $ (300,000)
Expenditures:
General government:
Planning and zoning 700,000 700,000 700,000
Excess (deficiency) of revenues over
(under) expenditures (400,000) (400,000) 400,000
Fund balance at beginning of year 4,274,235 4,274,235 4,274,235 -
Fund balance at end of year $ 3,874,235 $3,874,235 $ 4,274,235 $ 400,000
See accompanying independent auditors' report.
- 130 -
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 30,2020
Original Budget Final Budget Actual (Budgetary Basis) Variance Positive (Negative)
Revenues-licenses and permits-highway
beautification $ 191,000 $ 191,000 $ 197,043 $ 6,043
Expenditures:
Highways and streets 236,300 236,300 138,614 97,686
Culture and recreation 157,650 157,650 38,493 119,157
Total expenditures 393,950 393,950 177,107 216,843
Deficiency of revenues under expenditures (202,950) (202,950) 19,936 222,886
Fund balance at beginning of year 465,683 465,683 465,683 -
Fund balance at end of year $ 262,733 $ 262,733 $ 485,619 $222,886
See accompanying independent auditors'report.
- 131 -
COUNTY OF HAWAII
Hawaii County Housing Agency
Schedule of Revenues, Expenditures, and Changes in Fund Balance-
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2020
Original Budget Final Budget Actual (Budgetary Basis) Variance Positive (Negative)
Revenues:
Intergovernmental-
Federal-HUD-Voucher program $ 20,783,442 $ 22,412,449 $ 22,248,891 $ (163,558)
Investment earnings 1,620 1,620 3,811 2,191
Resale of property - - 40,000 40,000
Other 1,582,434 1,582,434 517,034 (1,065,400)
Total revenues 22,367,496 23,996,503 22,809,736 (1,186,767)
Expenditures:
Health,education and welfare 23,337,190 25,057,129 22,791,508 2,265,621
Pension and retirement contributions 901,575 901,575 835,833 65,742
Employees' health insurance 412,350 412,350 361,234 51,116
Total expenditures 24,651,115 26,371,054 23,988,575 2,382,479
Deficiency of revenues under expenditures (2,283,619) (2,374,551) (1,178,839) 1,195,712
Other financing sources-transfers in-
Transfers in-General Fund 2,283,619 2,289,619 1,517,810 (771,809)
Excess (deficiency) of revenues and other sources
over (under) expenditures - (84,932) 338,971 423,903
Fund balance at beginning of year 2,565,555 2,565,555 2,565,555 -
Fund balance at end of year $ 2,565,555 $ 2,480,623 $ 2,904,526 $ 423,903
See accompanying independent auditors'report.
- 132 -
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, 2020
Original Budget Final Budget Actual (Budgetary Basis) Variance Positive (Negative)
Revenues-investment earnings $ - $ - $ 802 $ 802
Excess of revenues over expenditures - 802 802
Other financing (uses) -transfers (out)-
Transfers out-Serial Bond Redemption Fund (32,000) (31,055) 945
Deficiency of revenues and other sources - (32,000) (30,253) 1,747
under expenditures and other uses
Fund balance at beginning of year 91,351 91,351 91,351 -
Fund balance at end of year $ 91,351 $ 59,351 $ 61,098 $ 1,747
See accompanying independent auditors' report,
133
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, 2020
Original Budget Final Budget Actual (Budgetary Basis) Variance Positive (Negative)
Revenues-GET surcharge $32,000,000 32,000,000 37,948,026 5,948,026
Expenditures:
Highways and streets-mass transit 11,235,956 11,235,956 5,096,020 6,139,936
Pension and retirement contributions 325,000 325,000 257,178 67,822
Employees'health insurance 120,000 120,000 76,853 43,147
Other 59,044 59,044 14,988 44,056
Total expenditures 11,740,000 11,740,000 5,445,039 6,294,961
Excess (deficiency) of revenues over(under)
expenditures 20,260,000 20,260,000 32,502,987 12,242,987
Other financing sources (uses) -transfers in (out)-
Transfers out-Capital Projects Fund (12,660,000) (12,660,000) (12,660,000) -
Transfers out-Serial Bond Redemption Fund (5,600,000) (5,600,000) (5,600,000) -
Transfers out-Interest Fund (2,000,000) (2,000,000) (2,000,000) -
Deficiency of revenues and other sources
under expenditures and other uses - 12,242,987 12,242,987
Fund balance at beginning of year 6,041,181 6,041,181 6,041,181 -
Fund balance at end of year $ 6,041,181 $ 6,041,181 $ 18,284,168 $ 12,242,987
See accompanying independent auditors' report.
. 134 -
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 June 30, 2020
Original Budget Final Budget Actual (Budgetary Basis) Variance Positive (Negative)
Revenues:
Licenses-ST vacation rental fees $800,000 $ 800,000 $1,788,250 988,250
Fines and forfeitures 45,850 45,850 - (45,850)
Total revenues 845,850 845,850 1,788,250 942,400
Expenditures:
General government:
ST vacation rental enforcement 672,850 672,850 361,044 311,806
Pension and retirement contributions 91,900 91,900 6,065 85,835
Employees'health insurance 65,500 65,500 626 64,874
Other 15,600 15,600 - 15,600
Total expenditures 845,850 845,850 367,735 478,115
Excess (deficiency) of revenues over
(under) expenditures 1,420,515 1,420,515
Fund balance at beginning of year 251,151 251,151 251,151 -
Fund balance at end of year $251,151 $ 251,151 $1,671,666 $ 1,420,515
See accompanying independent auditors' report.
- 135 -
COUNTY OF HAWAII
Agency Funds
Combining Statement of Agency Funds Net Position
June 30, 2020
State Weight District Tax Fund Improvement District No.18 Fund Improvement District No.19 Fund District Improvement No.20 Fund Improvement District Revolving Fund Performance and Refundable Deposits Funds
Assets
Cash and cash equivalents $2,107,133 $ 508,920 $ 397,109 $ 276,264 $ 148,336 $ 216,431
Investments - 250,248 - 35,220
Due from other agency funds - - - -
Other receivables 5,931 6,476 28 257 232
Total assets $2,107,133 $ 514,851 $ 653,833 $ 276,292 $ 183,813 $ 216,663
Liabilities
Vouchers payable $ $ $ • $ $ $
Due to other agency funds - - 8,400
Accrued liabilities 2,107,133 7,195 5,606 104
Advances payable - 13,075 10,969 - 208,159
Assets held for the benefit of
improvement districts 494,581 637,258 276,292 183,813 -
Total liabilities $2,107,133 $ 514,851 $ 653,833 $ 276,292. $ 183,813 $ 216,663
See accompanying independent auditors'report.
- 136 -
Non-Profit Organ and Business
Payroll Flexible Lapsed License Tissue Improvement
Clearance Spending Warrants Plates Education District
Fund Account Fund Fund Fund 1 -Kailua Total
S 114,205 $380,702 $ 365,298 $ 11,355 $ 4,793 $ 324 $ 4,530,870
- - - - - - 285,468
- - 15,396 - - - 15,396
7,093 37,826 - - 10,891 68,734
$ 121,298 $380,702 $ 418,520 $ 11,355 $ 4,793 $ 11,215 $ 4,900,468
$ 2,258 $ - $ - $ - $ - $ - $ 2,258
6,856 - - 140 - - 15,396
112,184 380,702 418,520 11,215 4,793 324 3,047,776
- - - - - - 232,203
- - - - - 10,891 1,602,835
$ 121,298 $380,702 $ 418,520 $ 11,355 $ 4,793 $ 11,215 $ 4,900,468
137 -
COUNTY OF HAWAII
Agency Funds
Combining Statement of Changes in Assets and Liabilities
For the Fiscal Year Ended June 30, 2020
Balance July 1, 2019 Additions Deductions Balance June 30, 2020
State Weight Tax Fund
Assets
Cash and cash equivalents $1,775,915 $ 24,623,876 $ 24,292,658 $2,107,133
Liabilities
Vouchers payable $ $ 24,152,768 $ 24,152,768 $
Due to other agency funds 8 - 8
Accrued liabilities-due to State of Hawaii 1,775,907 24,625,294 24,294,068 2,107,133
Total liabilities $1,775,915 $ 48,778,062 $ 48,446,844 $2,107,133
Improvement District No. 18 Fund
Assets
Cash and cash equivalents $ 515,498 $ 153,882 $ 160,460 $ 508,920
Other receivables 6,182 155,780 156,031 5,931
Total assets $ 521,680 $ 309,662 $ 316,491 $ 514,851
Liabilities
Vouchers Payable $ - $ 410 $ 410 $ -
Due to other non-agency funds 1,341 1,264 1,341 1,264
Accrued liabilities 6,182 122,106 122,357 5,931
Advances payable 15,224 - 2,149 13,075
Assets held for the benefit
of improvement districts 498,933 122,358 126,710 494,581
Total liabilities $ 521,680 $ 246,138 $ 252,967 $ 514,851
- 138-
COUNTY OF HAWAII
Agency Funds
Combining Statement of Changes in Assets and Liabilities
For the Fiscal Year Ended June 30, 2020
Balance July 1, 2019 Additions Deductions Balance June 30, 2020
Improvement District No. 19 Fund
Assets
Cash and cash equivalents $ 364,999 $ 99,459 $ 67,349 $ 397,109
Investments 250,060 188 - 250,248
Due from other non-agency funds 14,227 - 14,227 -
Other receivables 8,281 69,338 71,143 6,476
Total assets $ 637,567 $ 168,985 $ 152,719 $ 653,833
Liabilities
Vouchers Payable $ - $ 2,296 $ 2,296 $ -
Due to other non-agency funds 1,769 1,673 1,769 1,673
Accrued liabilities 5,754 66,795 68,616 3,933
Advances payable 9,880 10,969 9,880 10,969
Assets held for the benefit
of improvement districts 620,164 74,466 57,372 637,258
Total liabilities $ 637,567 $ 156,199 $ 139,933 $ 653,833
Improvement District No. 20 Fund
Assets
Cash and cash equivalents $ 14,746 $ 263,748 $ 2,230 $ 276,264
Investments 225,000 - 225,000 -
Other receivables 579 28 579 28
Total assets $ 240,325 $ 263,776 $ 227,809 $ 276,292
Liabilities
Vouchers Payable $ 75,000 $ - $ 75,000 $ -
Advances payable 2,148 - 2,148 -
Assets held for the benefit
of improvement districts 163,177 113,197 82 276,292
Total liabilities $ 240,325 $ 113,197 $ 77,230 $ 276,292
- 139 -
COUNTY OF HAWAII
Agency Funds
Combining Statement of Changes in Assets and Liabilities
For the Fiscal Year Ended June 30, 2020
Balance July 1, 2019 Additions Deductions Balance June 30, 2020
Improvement District Revolving Fund
Assets
Cash and cash equivalents $ 10,478 $ 137,858 $ $ 148,336
Investments 169,949 134,729 35,220
Other receivables 519 257 519 257
Total assets $ 180,946 $ 138,115 $ 135,248 $ 183,813
Liabilities
Assets held for the benefit
of improvement districts $ 180,946 $ 2,867 $ 183,813
Performance and Refundable
Deposits Fund
A=
Cash and cash equivalents $ 332,554 $ 432,555 $ 548,678 $ 216,431
Due from other non-agency funds - $ 75,487 $ 75,255 232
$ 332,554 $ 508,042 $ 623,933 $ 216,663
Liabilities
Vouchers payable $ - $ 539,689 $ 539,689 $
Due to other agency funds 5,850 8,400 5,850 8,400
Due to other non-agency funds - 104 - 104
Advances payable 326,704 423,493 542,038 208,159
Total liabilities $ 332,554 $ 971,686 1,087,577 $ 216,663
- 140 -
COUNTY OF HAWAII
Agency Funds
Combining Statement of Changes in Assets and Liabilities
For the Fiscal Year Ended June 30, 2020
Balance July 1, 2019 Additions Deductions Balance June 30, 2020
Payroll Clearance Fund
Assets
Cash and cash equivalents $ 554,271 $331,599,469 $332,039,535 $ 114,205
Due from other non-agency funds - 317,794,554 317,790,666 3,888
Other receivables 3,205 - - 3,205
Total assets $ 557,476 $649,394,023 $649,830,201 $ 121,298
Liabilities
Vouchers payable $ 1,315 $ 163,576,141 $ 163,575,198 $ 2,258
Due to other agency funds 1,224 6,856 1,224 6,856
Due to other non-agency funds - 2,176 - 2,176
Accrued liabilities 554,937 363,283,873 363,728,802 110,008
Total liabilities $ 557,476 $526,869,046 $527,305,224 $ 121,298
Flexible Spending Account
Assets
Cash and cash equivalents $ 382,314 $ 433,474 $ 435,086 $ 380,702
Liabilities
Accrued liabilities $ 382,314 $ 433,474 $ 435,086 $ 380,702
Lapsed Warrants Fund
Assets
Cash and cash equivalents $ 346,242 $ 20,884 $ 1,828 $ 365,298
Due from other agency funds 7,242 15,396 7,242 15,396
Due from other non-agency funds 13,429 37,826 13,429 37,826
Total assets $ 366,913 $ 74,106 $ 22,499 $ 418,520
Liabilities
Vouchers payable $ - $ 1,603 $ 1,603 $ -
Accrued liabilities 366,913 65,436 13,829 418,520
Total liabilities $ 366,913 $ 67,039 $ 15,432 $ 418,520
- 141
COUNTY OF HAWAII
Agency Funds
Combining Statement of Changes in Assets and Liabilities
For the Fiscal Year Ended June 30, 2020
Balance July 1, 2019 Additions Deductions Balance June 30, 2020
Assets
Cash and cash equivalents $ 18,580 $ 69,210 $ 76,435 $ 11,355
Liabilities
Vouchers payable $ 75,925 $ 75,925
Due to other agency funds 160 140 160 140
Accrued liabilities:
Due to non-profit agency 18,420 69,070 76,275 11,215
Total liabilities $ 18,580 $ 145,135 $ 152,360 $ 11,355
Organ and Tissue Education Fund
Assets
Cash and cash equivalents $ 2,001 $ 12,066 $ 9,274 $ 4,793
Liabilities
Vouchers payable $ $ 9,226 $ 9,226 $
Accrued liabilities-due to State of Hawaii 2,001 12,066 9,274 4,793
Total liabilities $ 2,001 $ 21,292 $ 18,500 4,793
Business Improvement District I-Kailua
Assets
Cash and cash equivalents $ 944 $ 1,115,434 $ 1,116,054 $ 324
Other receivables-BID I-Kailua Assessment 6,048 1,243,001 1,238,158 10,891
Due from other non-agency funds - 121,914 121,914 -
Total assets $ 6,992 $ 2,480,349 $ 2,476,126 $ 11,215
Liabilities
Vouchers payable $ $ 1,102,066 $ 1,102,066 $
Accrued liabilities-due to KVBID 944 324 944 324
Accrued liabilities 8 8 -
Assets held for the benefit
of improvement districts 6,048 834,478 829,635 10,891
Total liabilities $ 6,992 $ 1,936,876 $ 1,932,653 $ 11,215
- 142 -
COUNTY OF HAWAII
Agency Funds
Combining Statement of Changes in Assets and Liabilities
For the Fiscal Year Ended June 30, 2020
Balance July 1, 2019 Additions Deductions Balance June 30, 2020
Total-All Agency Funds
Assets
Cash and cash equivalents $4,318,542 $358,961,915 $358,749,587 $4,530,870
Investments 645,009 188 359,729 285,468
Due from other agency funds 7,242 15,396 7,242 15,396
Due from other non-agency funds 27,656 318,029,781 318,015,491 41,946
Other receivables-BID 1-Kailua Assessment 6,048 1,243,001 1,238,158 10,891
Other receivables 18,766 225,403 228,272 15,897
Total assets $5,023,263 $678,475,684 $678,598,479 $4,900,468
Liabilities
Vouchers payable $ 76,315 $ 189,460,124 $ 189,534,181 $ 2,258
Due to other agency funds 7,242 15,396 7,242 15,396
Due to other non-agency funds 3,110 5,217 3,110 5,217
Accrued liabilities 1,316,100 363,971,692 364,368,698 919,094
Accrued liabilities-due to non-profit agency 18,420 69,070 76,275 11,215
Accrued liabilities-due to State of Hawaii 1,777,908 24,637,360 24,303,342 2,111,926
Accrued liabilities-due to KVBID 944 324 944 324
Advances payable 353,956 434,462 556,215 232,203
Assets held for the benefit
of improvement districts 1,469,268 1,147,366 1,013,799 1,602,835
Total liabilities $5,023,263 $579,741,011 $579,863,806 $4,900,468
See accompanying independent auditors' report.
- 143 -
COUNTY OF HAWAII
Private Purpose Trusts
Combining Statement of Private Purpose Trust Net Position
June 30, 2020
Geothermal Asset Fund Shippers' Wharf Trust Fund Total Private Purpose Trusts
Assets
Cash and cash equivalents $ 1,818,326 $ 763,469 $ 2,581,795
Investments 397,646 1,795,203 2,192,849
Interest receivable 2,898 - 2,898
Total assets $ 2,218,870 $ 2,558,672 $ 4,777,542
Net Position
Held in trust for other parties $ 2,218,870 $ 2,558,672 $ 4,777,542
Total net position $ 2,218,870 $ 2,558,672 $ 4,777,542
See accompanying independent auditors' report.
- 144 -
COUNTY OF HAWAII
Private Purpose Trusts
Combining Statement of Changes in Private Purpose Trust Net Position
For the Fiscal Year Ended June 30, 2020
Geothermal Asset Fund Shippers' Wharf Trust Fund Total Private Purpose Trusts
Contributions:
Puna Geothermal Venture $ 50,000 $ $ 50,000
Investment earnings:
Net increase (decrease) in fair value of
investments 11,651 65,657 77,308
Dividends - 44,643 44,643
Interest 21,998 2,651 24,649
Total additions 83,649 112,951 196,600
Deductions
Grant payments 45,724 45,724
Investment Fees 14,273 14,273
Total deductions - 59,997 59,997
Change in net position 83,649 52,954 136,603
Net position, beginning of year 2,135,221 2,505,718 4,640,939
Net position, end of year $ 2,218,870 $ 2,558,672 $4,777,542
See accompanying independent auditors'report.
- 145 -
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- 146-
STATISTICAL SECTION
(UNAUDITED)
Contents Page
Financial Trends—These schedules contain trend information to help the reader understand how
the County's financial performance and well-being have changed over time. 147
Revenue Capacity—These schedules contain information to help the reader assess the County's
most significant local revenue source,the property tax. 152
Debt CapacityThese schedules present information to help the reader assess the affordability of
the County's current levels of outstanding debt and the County's ability to issue additional debt in
the future. 158
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, 161
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. 163
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Table 4
COUNTY OF HAWAII
Changes in Fund Balances, Governmental Funds
(Modified accrual basis of accounting)
Last Ten Fiscal Years
(Amounts in thousands)
2011 2012 2013 2014 2015 2016 2017 2019 2019 2020
Revenues:
Property tax $216,511 $208,231 $201,201 $223,482 5236,190 $249,054 $266,517 $301,699 $313,631 $327,886
Public service company tax 9,297 9,897 10,766 10,390 10,386 9,801 8,423 7,612 8,494 9,962
Fuel tax 7,603 8,293 6,353 7,373 7.633 7,934 8,289 13,342 17,343 20,108
Public utility franchise tax 9,416 11,065 11,097 10,793 10,924 9,004 7,951 8,331 9,442 9,365
Licenses and permits 15,097 15,790 15,991 19,618 22,046 22,432 22,912 24,066 24,653 25,155
General excise tax surcharge 12,518 35,538
Intergovernmental 93.748 100,867 79,912 75,257 86,272 85,173 79,220 90,025 101,627 113.632
Charges for services 16,416 16,895 17,055 19,392 20,357 21,672 21,708 23,553 27,516 30,080
Investment earnings(loss)' 510 406 (618) 1,704 716 614 632 1,592 4,148 3,481
Settlement contributions - 12,500 - -
Other 7,874 4,201 4,399 30,084 9,769 16,132 11,791 4,932 4,643 4,174
Total Revenues 376,472 375,615 358.646 398,083 404,193 421,916 427,463 475,052 524,015 578,291
Expenditures:
Current:
Goncral government 34,251 35,088 33,360 36,679 40,905 40,489 40,819 41,571 41,900 47,383
Public safety 104,917 104,523 106,885 111,221 122,919 127,451 136,163 137,718 145,094 154,921
Highways and streets 17,114 17,338 17,923 20,270 20,984 22,479 20,329 21,401 27,448 27,962
Sanitation 28,424 29,511 30,672 29,949 31,464 34.015 38,671 39,352 43,815 43,758
Health,education and welfare 26,847 23,749 24,09 23,070 24,540 25,380 30,535 29,876 31,109 30,943
Culture and recreation 16,001 16,763 16,337 18,334 20,056 21,561 21,196 21,324 22,022 22,533
Pension and retirement contributions 27,284 27,773 29,816 33,032 39,485 41,359 43,718 49,494 53,137 61,813
Employees'health insurance 25.212 25,902 26,011 26,786 27,731 30,112 32,147 33,802 17,522 18,846
Other postemployme"t benefits 17,307 3,170 4,532 7,180 11,495 14,831 39,637 41,604
Other 4,758 4,193 2,991 3,238 4,686 3,931 3,839 4,622 4,314 8,742
Debt service:
Principal 42,233 24,834 23,718 19,013 22,004 22,432 22,032 96,906 30,577 29,222
Interest 14,841 15.032 14,345 14,644 13,871 12,974 17,289 17,739 19,223 18,390
Capital outlay 87,782 71,220 48,565 51,369 79,399 144,289 111,109 41,924 51,897 79,536
Total Expenditures 446,971 395,916 376,822 390,773 451,375 $33,650 529,342 540,560 $27,595 $85,853
Revenues over(under)Expenditures (70,499) (20,281) (18,176) 7,308 (47,192) (111,934) (101,979) (65,508) (3,580) (7,572p
Other Financing Sources(Uses):
Sale of assets 6 153 1 10 25 66 21 23 47 10
Capital leases 47 2,521 1,307 14 1,971 3,399 3,769 3,809 6,777 2.822
Stan:Revolving Fund loans 9,257 4,569 4,991 3,072 7,317 8,130 5,154 7,439 174
Sale of bonds 45,000 50,480 - 130,136 107,116
Issuance of bond anticipation notes(BANs) 59,800
Refunding bonds 47,510 106,254 49,784
Premium on bonds 2,078 17,570 23,174 5,999
Rehmiling bonds/BANs issuance costs (508) (276)
Payment to refunded bond escrow agent (45,352) (128,920) (54,537)
Retirement of refunded debt (9,635)
Reclass of debt from current to long-term - - 30,279
Transfers in 56,099 59,971 51,356 61,239 59,394 $7,412 66,864 75,711 77,240 90,199
Transfers out (56,0991 (59,971) (51,356) (61,239) (59,394) (57,412) (66,864) (75,711) (77,240) (90,199)
Total other financing sources 56,398 7,243 66,872 3,096 1,996 140,908 71,720 116,071 14,263 33,285
Net change in fund balances S(13,038) S 48,696 S 10,404 S(45,186), $ 29,074 S 50,563 S 10,693 $ 25,713
Debt service as a percentage of
noricapital expenditures 15,9% 12.3% 13.9% 10.0% 93% 91% %4% 20,9% 10,5% 9 1 q'(?
Unaudited-see accompanying independent auditors'report.
Amount for fiscal year 2014 has been changed rot consistency
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Table 6
COUNTY OF HAWAII
Principal Taxpayers
June 30,2020 and 2011
Fiscal Year 2020 Fiscal Year 2011
Percentage Percentage
2019 of Total 2010 of Total
Assessed Assessed Assessed Assessed
Taxpayer Business Valuation Rank Valuation Valuation Rank Valuation
Kohanaiki Shores LLC Developer $ 296,443,500 1 0.9% $ 76,408,900 8 0.3%
Hilton Resorts Corp. Timeshare 282,291,400 2 0.8% 87,810,800 7 0.3°x'0
Mauna Kea/Hapuna Beach Corps, Developer/Hotel 175,118,000 3 0.5% - -
Hualalai Investors LLC Developer/Hotel 171,644,400 4 0.5% 216,994,300 3 019%
Hilton Land Investment I LLC Hotel 149,255,700 5 0.5% 224,278,600 2 0.9510
DHL Mahi Opco LLC Developer/Hotel 135,621,100 6 0.4%
MAPS Orchid Hotel LLC Hotel 127,282,600 7 0.4%
SMG I Hotel Waikoloa LLC Hotel 72,098,100 8 0.2%
Raptor Residence LLC Residential 74,278,800 9 0.2%
Target Corporation Retailer 66,098,500 10 0.2%
Mauna Kea Development Corp Hotels/Dev. 262,023,800 1 1.0%
Orchid 09 LLC Hotel 135,642,700 4 0.5%
WB KD Acquisition LLC Developer 113,006,000 5 0.4%
Mauna Lani Resort Inc. Developer/Hotel 103,201,700 6 0.4%
Kona Village Investors LLC Hotel 64,233,600 9 0.3%
BRE/Waikoloa LLC Hotel 59,705,400 10 0.2%
$1,550,132,100 4.6% $ 1,343,305,800 5.2%
Note: Gross valuation at January 1,2019: $33,443,473,564
Gross valuation at January 1,2010: $25,518,842,894
,Source. County of Hawaii,Department of Finance,Real Property Tax Division
Unaudited-see accompanying independent auditors'report.
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Table 9
COUNTY OF HAWAII
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
Debt Percent of
Applicable to Net Taxable
Fiscal Legal Debt Property Per
Year Margin(a) Value(b) Capita(c)
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 298,709,020 1.3% 1,538
2015 312,632,049 1.2% 1,592
2016 362,963,113 1.4% 1,829
2017 405,488,342 1.4% 2,024
2018 414,446,063 1.4% 2,062
2019 425,153,552 1.3% 2,110
2020 315,676,941 0.9% N/A
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.
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- 160-
Table 11
COUNTY OF HAWAII
Demographic and Economic Statistics
Last Ten Fiscal Years
Fiscal *Personal *Per
Year *Resident Income Capita
Ended Population (thousands Personal School Unemployment
June 30, as of July I of dollars) Income Enrollment Rate
2010 185,381 $ 5,717,885 $ 30,844 29,741 10.0%
2411 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 201,509 $ 8,509,388 $ 42,228 29,601 3.7%
2019 201,513 $ 8,781,599 $ 43,578 29,609 4.2%
*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.
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Table 12
COUNTY OF HAWAII
Principal Employers,County of Hawaii
June 30,2020 and 2011
2020 2011
Percentage Percentage
of Total County of Total County
Employer Employees Rank Employment Employees Rank Employment
State of Hawai'i 11,000 1 15.2% 8,063 1 10.7%
County of Hawai'i 2,700 2 3.7% 2,663 2 3.5%
Four Seasons Resort Hualalai 1,300 3 1.8% 550 8 0.7 9�'o
United States Government 1,300 4 1,8% 1,421 3 1.90/6
Mauna Kea and Hapuna Prince Resorts
and Mauna Kea Services 1,100 5 1.5%
Hilton Waikoloa Village 920 6 1.3% 881 4 1.2%
KTA Super Stores 850 7 1.2% 700 6 0.9%
The Fairmont Orchid,Hawaii 700 8 1.0% 618 7 0.8%
Waikoloa Beach Marriott Resort&Spa 313 9 0.4%
Securitas Security Services,USA Inc 296 10 0,4%
Wal-Mart 770 5 1.0%
Mauna Kea Beach Hotel 550 9 0.7%
Mauna Lani Resort(Operations), Inc. 529 10 0.70,,,o
Total 20,479 28.3% 16,745 22.I%
Total employee count 72,450 75,150
Source: County of Hawaii,Department of Research and Development
State of Hawaii, Hawaii Workforce Infonet: haps://www.hiwi.org
United State Department oftabor, Bureau of Labor Statistics:hitps.-I,'www,bls.govl"egionslwesilnews-release
Pacific Business News, "Employers, Big Island"Issue date: 1011612020
- 162-
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