HomeMy WebLinkAboutAnnual Comprehensive Financial Report 2021County of Hawaii
State of Hawaii
Annual Comprehensive Financial Report
For the Fiscal Year
July 1, 2020 to June 30, 2021
ANNUAL COMPREHENSIVE
FINANCIAL REPORT
Fiscal Year Ended June 30, 2021
COUNTY OF HAWAII
Hilo, Hawaii
Mitchell Roth
Mayor
Lee Lord
Managing Director
Prepared by
The Department of Finance
Deanna Sako
Director of Finance
COUNTY OF HAWAII
Annual Comprehensive Financial Report
For the Fiscal Year Ended June 30, 2021
Table of Contents
Page
INTRODUCTORY SECTION
Letter of Transmittal
1
GFOA Certificate of Achievement
8
Organization Chart
9
List of Elected Officials
10
List of Principal Officials
11
FINANCIAL SECTION
Report of Independent Auditors 13
Management's Discussion and Analysis 16
Basic Financial Statements:
Government -wide Financial Statements:
Statement of Net Position 28
Statement of Activities 30
Fund Financial Statements:
Balance Sheet - Governmental Funds
32
Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Position
33
Statement of Revenues, Expenditures, and Changes in Fund Balances -
Governmental Funds
34
Reconciliation of the Change in Fund Balances of Governmental
Funds to the Statement of Activities
36
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual (Budgetary Basis) - General Fund
38
Statement of Net Position - Proprietary Funds
42
Statement of Revenues, Expenses, and Changes in Fund Net Position -
Proprietary Funds
43
Statement of Cash Flows - Proprietary Funds
44
Statement of Fiduciary Net Position - Fiduciary Funds
45
Statement of Changes in Fiduciary Net Position - Fiduciary Funds
46
Notes to the Basic Financial Statements
47
Required Supplementary Information
108
FINANCIAL SECTION (Continued)
Page
Combining and Individual Nomnajor Fund Statements and Schedules:
Combining Balance Sheet - Nonmajor Governmental Funds
122
Combining Statement of Revenues, Expenditures, and Changes in Fund
Balances - Nonmajor Governmental Funds
126
Schedules of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual (Budgetary Basis):
Highway Fund
129
Sewer Fund
130
Solid Waste Fund
131
Cemetery Fund
132
Parking Meter Fund
133
Vehicle Disposal Fund
134
Bikeway Fund
135
Workforce Innovation & Opportunity Act Fund
136
Golf Course Fund
137
Geothermal Relocation and Community Benefits Fund
138
Beautification Fund
139
Hawaii County Housing Agency
140
Park Dedication Fund
141
General Excise Tax Fund
142
Short-term Vacation Rental Enforcement Fund
143
Geothermal Asset Fund
144
Combining Statement of Agency Funds Net Position - Custodial Funds
146
Combining Statement of Changes in Net Position - Custodial Funds
148
Combining Statement of Private Purpose Trust Net Position - Private Purpose Trusts
150
Combining Statement of Changes in Net Position - Private Purpose Trusts
151
STATISTICAL SECTION
Table 1 - Net Position by Component
153
Table 2 - Changes in Net Position
154
Table 3 - Fund Balances, Governmental Funds
156
Table 4 - Changes in Fund Balance, Governmental Funds
157
Table 5 - Real Property Assessed Values by Classification and Tax Rates
158
Table 6 - Principal Taxpayers
162
Table 7 - Property Tax Levies and Collections
163
Table 8 - Ratios of Outstanding Debt by Type
164
Table 9 - Ratios of General Bonded Debt Outstanding
165
Table 10 - Legal Debt Margin Information
166
Table l l - Demographic and Economic Statistics
167
Table 12 - Principal Employers, County of Hawaii
168
Table 13 - Full -Time Equivalent County Government Employees by Function
169
Table 14 - Operating Indicators by Function
170
Table 15 - Capital Asset Statistics by Functions
171
INTRODUCTORY SECTION
Mitchell D. Roth
Mayor
County of Hawaii
Finance Department
25 Aupuni Street, Suite 2103 • Hilo, Haivai'i 96720
(808) 961-8234 • Fax (808) 961-8569
January 28, 2022
The Honorable Mayor and Members of the Council
County of Hawaii
25 Aupuni Street
Hilo, Hawaii 96720
Deanna S. Sako
Director
Steven A. Hunt
Deputy Director
We transmit herewith the Annual Comprehensive Financial Report for the County of Hawaii,
State of Hawaii (the County), for the fiscal year July 1, 2020 to June 30, 2021.
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, 2021 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 and Canada
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. The unemployment rate for the County for the
second quarter of 2021 decreased by 11.3 percentage points from 19.0 to 7.7 percent, which is
according to the State of Hawaii Department of Business, Economic Development & Tourism
(DBEDT). According to DBEDT, Hawaii County added 5,600 non-agricultural wage and
salary jobs in the second quarter of 2021 over the same quarter in 2020.
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
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dealing with the public health crisis facing the community. In order to aid the state and local
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.
This is only one of the numerous federal grants that the County received during fiscal year 2021
to address the fallout of the pandemic that reached each governmental function and forced the
County to alter its operations to meet the needs of the community.
Major Initiatives
For the Year
Public Safety — One notable accomplishment during Fiscal Year 2020-2021 was the
Department's implementation of a Body Worn Camera (BWC) program for uniform officers,
joining the rest of the police departments throughout the state in deploying this technology. In
July 2020, the department acquired all of the BWC equipment purchased from AXON with
funding from the prior fiscal year and began the process of deploying the BWCs, which was
completed by the end of the fiscal year. The BWC program has proven to be a valuable resource
with regards to ensuring the professionalism within our department as video footage has been
utilized during administrative investigations to discredit or support allegations of misconduct.
The Hawaii Fire Department participated in extensive co -training events during the fiscal year
with the Pohakuloa Training Area Fire Department and the State Airport Rescue and Firefighting
Department. The Department also placed three new fire pumpers and a wildland tanker that was
donated into service.
Public Works — Over the past fiscal year the Department of Public Works (DPW) completed
major projects in our community including:
The Pu`u Noho Culvert Reconstruction, valued at $0.5 million, was completed in
November 2020. The project included replacing the collapsed culvert, reconstruct
concrete headwalls, reconstruct the roadway pavement structure, and striping. It was also
a project funded partially by the Federal Emergency Management Agency (FEMA) in
connection with the Hurricane Lane disaster.
The Plumeria Street, valued at $1 million, was completed in December 2020. The project
included pavement rehabilitation, installing pavement markers, and striping.
Culture and Recreation — Parks and Recreation continued to provide response to the COVID-19
pandemic by developing policies and rules for safe implementation of classes, programs and
facility use. Assisted the Hawaii County Civil Defense Agency by providing facilities and
personnel island wide for COVID-19 testing and vaccination clinics.
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For the Future
Public Safety — The major challenge facing the Police Department thus far this fiscal year is the
implementation and management of the County of Hawaii Animal Control Program that was
transferred from being contracted to a third party to being part of the Police Department in June
2021. Challenges facing the Department resulting from this change include but are not limited to
the hiring of manpower for a 24-hour operation, acquiring or leasing property across the island
for operations and purchasing equipment and supplies necessary to satisfy the needs of the
program.
Public Works - DPW is currently working on these major projects:
The Ali`i Drive Culvert Replacement, valued at $12 million, includes the demolition and
reconstruction of a concrete culvert bridge. The new structure provides a wider stream
flow opening, a longer span, with 16-foot wide travel lanes and two 7-foot wide
sidewalks. It was also a project of the Statewide Transportation Improvement Program
(STIP).
The Mamalahoa Highway Widening, Mud Lane to Mana Road, valued at $19.6 million,
includes the creation of turn lanes at side intersections. The project included grading,
paving, retaining walls, and installing pavement markings and signs. It was also a STIP
project.
The Kalaniana`ole Avenue Reconstruction, Kamehameha/Railroad Avenue to Ka`uhane
Avenue, 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 projected completion date is in August 2022.
The Hawaii County Emergency Call Center is valued at $31 million and is scheduled to
begin in September 2021. The project includes a new 17,127 square foot essential
facility building for the Police and Fire Dispatch. The project will generally consist of
site work, parking lot (58 parking stalls), loading zones, landscaping, redundant
generators, fuel tank and communication tower. The projected completion date is March
18, 2023.
Culture and Recreation - The Department will continue to adhere to government proclamations,
rules and guidelines as the pandemic continues. However, the Department will look to transition
out of COVID-19 restrictions and strive to resume normal operations. The Department will also
continue efforts to complete components of the ADA transition plan and other necessary repairs
and improvements to park facilities. In particular, the Department is excited for the completion
and reopening of the Pana`ewa Rainforest Zoo & Gardens.
M
Other Financial Information
Internal Control
The management of the County is responsible for establishing and maintaining an internal
control structure designed to ensure that the assets of the County are protected from loss, theft or
misuse and to ensure that adequate accounting data are compiled to allow for preparation of
financial statements in conformity with generally accepted accounting principles. The internal
control structure is designed to provide reasonable, but not absolute, assurance that these
objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control
should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits
requires estimates and judgments by management.
Budgetary Control
The County maintains budgetary controls to ensure that legal provisions of the annual budget are
complied with and that those expenditures do not exceed budgeted amounts.
Activities of the general fund and special revenue funds are included in the annual appropriated
operating budget. Project -length financial plans are adopted for the capital projects fund.
Budgetary control is established at the department level.
Formal budgetary integration is employed as a management control device for the general fund,
special revenue funds, and the capital projects fund. Budgetary control for the debt service fund
is achieved through general obligation bond indenture provisions.
The basis of accounting used for the budgets of the general and special revenue funds differs
from generally accepted accounting principles. Intergovernmental revenues are recognized when
awarded by the granting agency, encumbrances and unexpended allotments are treated as
expenditures for purposes of determining legal compliance with the annual budget, all leases are
treated as operating leases, and accounts payable are not accrued.
The County also maintains an encumbrance accounting system as one technique of
accomplishing budgetary control. Encumbrances outstanding at fiscal year end are included in
the various fund balance categories based on whether the resources are restricted, committed or
assigned and do not constitute expenditures or liabilities because they will be honored during the
following year. As demonstrated by the statements and schedules included in the financial
section of this report, the County continues to meet its responsibility for sound financial
management.
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.
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Financial Highlights
Total revenues increased by $100.2 million from the prior year, which was mostly due to
operating grants and contributions increasing by approximately $89.7 million. In addition to
grants with specific purposes, the County received $88.0 million in federal grants related to the
Coronavirus Relief that were used to meet general needs resulting from the pandemic. An
additional $83.8 million in federal grants was also received in connection with the 2018 Klauea
eruption. Second, there was an increase of $25.8 million in real property taxes, which resulted
from a $1.8 billion increase in the assessed value of the net taxable real property, with the
majority stemming from the category of taxable buildings. The residential class of property was
also divided into two tiers, with Tier II revenues having a 23% increase in real property tax rates.
With a 17.0 percent ($100.2 million) increase in revenues that was offset by a 16.0 percent
($94.2 million) increase in expenses, the County experienced an increase in net position of $29.0
million, which represented a 26 percent ($6.0 million) increase over the prior year's increase in
net position.
The County's net investment in capital assets increased by $25.6 million from the prior year,
which represented a 3.0 percent increase. New and continued construction projects in the areas
of highways and streets and parks and recreation accounted for the majority of the increase.
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
Hawai' i County's civil service employees are members of eight different bargaining units, of
which all prior contracts expired on June 30, 2021. Agreements have been reached for
bargaining units 01, 02, 03, 04 and 13 for the time period July 1, 2021 through June 30,
2023. These two year contracts include language for reopeners specific to salaries and wages in
the second year. Reopener discussions have begun for bargaining units 01, 02, 03, 04, and
13. Negotiations have reached an impasse and arbitration hearings for bargaining units 11, 12
and 15 are scheduled for early 2022.
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 Annual Comprehensive Financial Report for the fiscal year ended June 30, 2020.
This was the thirty third 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 annual comprehensive financial report. This report
must satisfy both generally accepted accounting principles and applicable legal requirements.
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A Certificate of Achievement is valid for a period of one year only. We believe our current
Annual Comprehensive Financial Report continues to meet the Certificate of Achievement
Program's requirements, and we are submitting it to the GFOA to detennine 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
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Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
County of Hawaii
Hawaii
For iW Comprehensive Annual
Financial Report
For the Fiscal Year Ended
June 30, 2020
9M
County of Hawaii
Organization Chart
County Council
County I I County
Clerk Auditor
Departments under
direct supervision of the
Managing Director:
Corporation Counsel
Finance
Planning
Environmental Management
Research & Development
Public Works
Parks & Recreation
Information Technology
County Electorate
Mayor 1 Prosecuting Attorney
Office of Management:
Managing Director
Agencies under
direct supervision of the
Managing Director:
Civil Defense
Office of'Aging
Mass Transit
Office of Housing &
Community Development
Departments under
commissions and
administrative supervision
of the Mayor:
Human Resources
Police
Liquor Control
Fire
Water Supply
(semi -autonomous)
Administrative Officers
Mitchell Roth
Kelden Waltjen
County of Hawaii
Elected Officialg
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(Term: 2020-2024)
(Term: 2020-2022)
Mai le "Medeiros" David
Aaron S.Y. Chung
Heather L. KimW1
Susan L. K. Leeloy
Ashley L. Kierkiewicz
Matt Kancali"i-Kleinfelder
Rebecca Villegas
Holeka Gow Inaba
Herber M. "Tim" Richards 111, DVM
Mayor
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Principal Officials
County Clerk
Jon Henricks
Legislative Auditor, Acting
Maxine Pacheco
Managing Director
Lee Lord, PIED
Deputy Managing Director
Bobby Command
Corporation Counsel
Elizabeth Strance
Director of Finance
Deanna Sako
Planning Director
Zendo Kem
Director of Personnel
William Brilhante Jr.
Director of Researchand Development
Douglass Adams
Chief of PolicePaul
Ferreira
Fire Chief
Kazuo Todd
Director of Public Works
Steven Rodenhurst
Diivctor of Environmental Management
Ramzi Mansour
Parks and Recreation Director
Maruice Messina
Manager -Chief Engineer, Department of Water Supply
Keith Okamoto
Civil Defense Administrator
Talmadge Magno
Director of Liquor Control
Uerald Tkse
Mass Transit Administrator, Acting
John Andoh III
Executive on Aging
William Fair III
Administrator, Office of Housing and
Community Development
Susan Kunz
Director of Information Technology
Scott Ueh r
This page intentionally left blank.
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FINANCIAL SECTION
s
N&K CPAs, Inc.
ACCOUNTANTS I CONSULTANTS
INDEPENDENT AUDITOR'S REPORT
To the Chair and Members of the County Council
County of Hawaii
Report on the Financial Statements
999 BISHOP STREET, SUITE 2200
HONOLULU, HAWAII 96813
T (808) 524-2255 F (808) 523-2090
We have audited the accompanying financial statements of the governmental activities, the
business -type activities, the discretely presented component unit, each major fund, and the
aggregate remaining fund information of the County of Hawaii, State of Hawaii (County), as of
and for the fiscal year ended June 30, 2021, and the related notes to the financial statements,
which collectively comprise the County's basic financial statements as listed in the table of
contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements
in accordance with accounting principles generally accepted in the United States of America; this
includes the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States
of America and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor's
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity's preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the entity's internal control.
Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of significant accounting estimates made by
management, as well as evaluating the overall financial statement presentation of the financial
statements.
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N&K CPAs, Inc.
ACCOUNTANTS I CONSULTANTS
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, the business -type activities, the
discretely presented component unit, each major fund, and the aggregate remaining fund
information of the County of Hawaii, State of Hawaii, as of June 30, 2021, 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.
Emphasis of Matter
Adoption of NewAccounting Principle
As discussed in Note 1 to the financial statements, the County adopted new accounting guidance,
Governmental Accounting Standards Board Statement No. 84, Fiduciary Activities. Our opinion is
not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis (pages 16 through 26), schedule of changes in the net
OPEB liability and related ratios (pages 108 through 111), schedule of contributions (OPEB)
(pages 112 through 114), schedule of the County's and Department's proportionate share of the
net pension liability (ERS) (page 115), schedule of the employer pension contributions (ERS)
(pages 116 through 117), and schedule of changes in total pension liability (bandsmen pension)
(pages 118 through 119) 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
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N&K CPAs, Inc.
ACCOUNTANTS I CONSULTANTS
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
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
January 28, 2022, on our consideration of the County's internal control over financial reporting
and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant
agreements and other matters. The purpose of that report is solely to describe the scope of our
testing of internal control over financial reporting and compliance and the results of that testing,
and not to provide an opinion on the effectiveness of the County's internal control over financial
reporting or on compliance. That report is an integral part of an audit performed in accordance
with Government Auditing Standards in considering the County's internal control over financial
reporting and compliance.
Honolulu, Hawaii
January 28, 2022
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MANAGEMENT'S DISCUSSION AND ANALYSIS
This section of the County of Hawai`i's (the County) Annual Comprehensive Financial Report
presents a narrative overview and analysis of the financial activities of the County for the fiscal
year ended June 30, 2021. 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 $186.5 million
(net position). This amount includes a negative balance of $880.7 million in unrestricted net
position, a decrease of $46.2 million from the prior year, which is explained in the sections
below. This amount includes $1.9 billion of total assets and $209.2 million of total deferred
outflows of resources; $1.8 billion of total liabilities and $75.0 million of total deferred
inflows of resources.
• As of the end of fiscal year 2021, the County's governmental funds reported combined
ending fund balances of $333.9 million, an increase of $80.6 million from the prior year.
Approximately 30 percent of this total amount, $100.3 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 $56.5
million, or 13 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,
-16-
sanitation and general government. The business -type activities of the County include rental
housing for senior citizens and families.
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-
-17-
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.
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 custodial 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 Supplementary Information
In addition to the basic financial statements and accompanying notes, this report also presents
certain required supplementary information, which is presented immediately following the notes
to the basic financial statements. The combining statements referred to earlier in connection with
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 Statements of Net Position
June 30, 2021 and 2020
Government
Governmental Activities Business -type Activities Total
2021 2020 2021 2020 2021 2020
Assets:
Current and other assets
$ 483,615,506
$ 401,959,382
$ 986,238
$ 1,347,120
$ 484,601,744
$ 403,306,502
Capital assets, net
1,382,181,844
1,360,608,411
3,507,197
t,917,893
1,385,689,041
1,362,526,304
Total assets
1,865,797,350
1,762,567,793
4,493,435
3,265,013
1,870,290,785
1,765,832,806
Deferred Outflows
Of Resources:
209,237,089*
206,923,055*
209,237,089
206,923,055
Total Assets and Deferred
Outflows of Resources
2,075,034,439
1,969,490,848
4,493,435
3,265,013
2,079,527,874
1,972,755,861
Liabilities:
Long-term liabilities
outstanding 1,703,789,631 1,675,729,743 100,691 582,961 1,703,890,322 1,676,312,704
Other liabilities 114,058,875 121,977,885 101,664 69,134 114,160,539 122,047,019
Total liabilities 1,817,848,506 1,797,707,628 202,355 652,095 1,818,050,861 1,798,359,723
Deferred Inflows
Of Resources: 74,995,154 21,372,121 -- -- 74,995,154 21,372,121
Total Liabilities and
Deferred inflows
Of Resources 1,892,843,660 1,819,079.749 202,355 652,095 L893,046,015 1,819,731,844
Net position:
Net investment in
capital assets
917,612,276
891,782,081 3,406,506
1,334,932 921,018,782
893,117,013
Restricted
146,204,814
94,431,592
146,204,814
94,431,592
Unrestricted
(881,626,311)*
(835,802,574)* 884,574
1,277,986 (880,741,737)
(834,524,588)
Total net position
$ 182,190,779
$ 150,411,099 $ 4,291,080
$2,612,918 $186,481,859
$153,024,017
*See explanation on page 17.
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 $186.5 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 $31.2 million from the prior year, which was an increase
of $8.2 million (36%) from the increase that was experienced last fiscal year. The main reasons
for the large increase in the current year's increase over last year, was due to several increases in
revenue sources. Property taxes increased in the current fiscal year by $25.8 million due to a $1.8
billion increase in the assessed value of the net taxable real property, with the majority stemming
from the category of taxable buildings. The residential class of property was also divided into
two tiers, with Tier 11 revenues having a 23% increase in real property tax rates. Revenues from
the general excise tax surcharge increased by $14.7 million from the prior year due to fact that the
surcharge was in effect for 12 months at the rate of 0.50%, whereas it was only in effect at this
rate for the last 6 months of the prior year. There was also an increase of $89.7 million in
operating grants and contributions received by the County, of which $77.0 million was from the
Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
The County's net capital assets increased by $23.2 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 increased by $27.6 million (2 percent) due
primarily to the issuance of $62.1 million of new bond proceeds, of which approximately $14.4
million, in addition to $15.6 million of premiums, were used to pay $30.0 million in bond
anticipation notes from the prior year. There were principal payments of bonds and SIZE loans
and amortization of related bond premiums totaling $33.0 million. There was a $34.3 million
decrease in the net other post -employment benefit obligation, which was offset by a $28.0 million
increase in the County's net pension liability. See further discussion of the increase in long-term
debt outstanding on page 25.
-19-
Condensed Statements of Activities
For the
Fiscal Years Ended
June 30, 2021 and 2020
Primary Government
Governmental
Activities
Business -type Activities
Total
2021
2020
2021 2020
2021
2020
Revenues:
Program revenues:
Charges for services
$ 52,163,107
$ 56,476,328
$ 485,498 $ 482,150
$ 52,648,605
$ 56,958,478
Operating grants and contributions
165,236,320
75,553,629
262,821 269,273
165,499,141
75,822,902
Capital grants and contributions
29,772,337
43,498,993
- -
28,772,337
43,498,993
General revenues:
Property taxes
359,304,950
333,515,661
359,304,950
333,515,661
Other taxes
85,477,138
73,873,234
85,477,138
73,873,234
Grants and contributions, unrestricted
556,498
16,530,357
556,488
16,530,357
Investment earnings
552,408
3,220,862
392 5,193
552,800
3,226,055
Other
1,225,852
2,127,119
- -
1,225,852
2,127,119
Transfers
(1,669,662)
(616,776)
1,669,662 616,776
-
-
Totalrevenuesandtransfers
691,618,938
604,179,407
2,4t8,373 1,373,392
694,037,311
605,552,799
Expenses:
General government
88,736,125
86,747,456
-
88,736,125
86,747,456
Public safety
353,318,886
274,259,439
353,318,886
274,259,439
Highways and streets
71,625,009
67,161,387
71,625,009
67,16t,387
Health, education and welfare
48,213,864
37,042,326
740,211 645,452
48,954,075
37,687,778
Culture and recreation
25,092,892
33,613,224
-
25,092,892
33,613,224
Sanitation
61,260,244
68,870,497
61,260,244
68,870,497
Interest on long-term debt
13,811,108
14,178,476
13,811,108
14,178,476
Total expenses
662,058,128
581,872,805
740,211 645,452
662,798,339
582,518,257
Increase in net position
29,560,810
22,306,602
1,678,162 727,940
31,238,972
23,034,542
Net position at beginning ofyear
150,411,099
128,104,497
2,612,918 1,884,978
153,024,017
129,989,475
Prior period adjustment
2,218,870
--
-- --
2,218,870
--
Net position at beginning of year,
as restated
152,629,969*
128,104,497
2,612,918 1,884,978
155,242,887
129,989,475
Net position at end of year
$ 182J90,779
$ 150,411,099
$ 4,291,080 $ 2,612,918
$ 186,481,859
$ 153,024,017
*Due to the implementation of GASB 84,
a prior period adjustment to governmental activities
of
$2,218,870 is reflected
in June 2021. The restated beginning balance for fiscal year 2021 is
$152,629,969 for governmental
activities.
See Note 1
for details.
Analysis of Changes in Net Position
Governmental activities. Governmental activities increased the County's net position by $29.6
million, which represented 95 percent of the total increase in net position of the County.
The primary reasons for the $87.4 million (14 percent) increase in total revenues from
governmental activities was due to property tax increases in the current fiscal year of $25.8
million. The increase in property tax revenues was due to a $1.8 billion increase in the assessed
value of the net taxable real property, with the majority stemming from the category of taxable
buildings. The residential class of property was also divided into two tiers, with Tier II revenues
having a 23% increase in real property tax rates. Revenues from the general excise tax surcharge
increased by $14.7 million from the prior year due to fact that the surcharge was in effect for 12
months at the rate of 0.50%, whereas it was only in effect at this rate for the last 6 months of the
prior year. As previously mentioned, there was also an increase of $89.7 million in operating
grants and contributions received by the County, of which $77.0 million was from the
Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
-20-
Total expenses increased by $80.2 million, which represented a 14 percent change from the prior
year. There were retroactive pay raises resulting from bargaining unit negotiations, as well as the
typical increases in salaries and wages and related employment benefit costs across all functions
in the current fiscal year. The County also incurred approximately $77.1 million of expenditures
while responding to the additional needs caused by the COVID-19 pandemic. These expenditures
were funded by just one of the many federal grants received by the County to assist in dealing
with the financial burden resulting from the pandemic.
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 (53 percent),
followed by general government (13 percent) and highways and streets (11 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 (52 percent), followed by
operating grants and contributions (24 percent) and other taxes (12 percent).
Expenses and Program Revenues — Governmental Activities
Year Ended June 30, 2021
$400,000,000
$350,000,000
$300,000,000
$250,000,000
$200,000,000
$150,000,000
$100,000,000
$50,000,000
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-21-
Revenue by Source — Governmental Activities
Year Ended June 30, 2021
Business -type activities. Business -type activities net position increased by $1.7 million but had
an extremely minimal impact on the increase in the County's net position overall. The reason for
this is due to the capital asset transfer from the governmental activities of $1.7 million. Expenses
for health, education and welfare account for all of the $740,211 of expenses which represents a
15 percent increase from the prior year, due mainly to increases of approximately $131,300 in the
area of general administration charges. Charges for services were $485,498 and operating grants
and contributions were $262,821, 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 fiscal year 2021, the County's governmental funds reported combined ending
fund balances of $333.9 million, an increase of $82.8 million (33 percent) in comparison with
prior year. Approximately 28 percent of this total amount ($94.6 million) constitutes unrestricted
fund balance. The unrestricted portion of the fund balance is comprised of (1) $49.8 million in
committed fund balance, (2) $40.5 million in assigned fund balance, and (3) $4.3 million in
unassigned fund balance. The remainder of the fund balance is divided between $9.5 million in
nonspendable fund balance for inventory and $229.8 million in restricted fund balance.
Approximately 77 percent of the total restricted fund balance is due to restrictions relating to
highways, streets and abandoned vehicles ($132.7 million) and debt service ($45.0 million).
-22-
$37.9 million of the fund balance restricted for highways, streets and abandoned vehicles was due
to the General Excise Tax fund that was created in fiscal year 2019, 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 $22.4 million due to the fact that the surcharge was in
effect for 12 months at the rate of 0.50%, whereas it was only in effect at this rate for the last 6
months of the prior year.
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 $50.8 million, while total fund balance
increased to $88.6 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 11 percent of total general fund expenditures, while total
fund balance represents 20 percent of that same amount.
The fund balance of the County's general fund increased by $3.7 million during the current fiscal
year as compared to an increase of $8.7 million in the prior year. Key factors in this decrease
($5.0 million) over last year's increase are as follows:
A positive increase of $27.3 million (8 percent) in real property tax revenues and $62.9
million (90 percent) in intergovernmental revenues. As previously stated, the real property
tax increase was due to a $1.8 billion increase in the assessed value of the net taxable real
property, with the majority stemming from the category of taxable buildings. The residential
class of property was also divided into two tiers, with Tier II revenues having a 23% increase
in real property tax rates. The majority of the increase in intergovernmental revenue was due
to federal grants that the County received related to the Coronavirus pandemic and the 2018
Kilauea eruption.
The positive impact of the increase in revenues was offset by increases of $89.9 million (25
percent) in expenditures. $5.8 million of the total increase in expenditures is due to increases
in salaries and wages and in associated employee and retiree benefits from the prior year.
The County also faced the continuation of funding costs related to emergency protective
measures resulting from the COVID-19 pandemic, with the assistance of the financial aid that
was received by the federal government. The County incurred approximately $77.1 million
of expenditures while responding to the additional needs caused by the COVID-19 pandemic.
These expenditures were represented just one of the many federal grants received by the
County to assist in dealing with the additional financial burden resulting from the pandemic.
The fund balance of the County's capital projects fund increased by $45.8 million (92 percent)
during the current fiscal year. The increase is primarily due to the issuance of new bonds
resulting in additional other funding source of $38.1 million and the related premiums of $15.6
million. There were also additional drawdowns of loans totaling $16.2 million. These additional
funding sources of $69.9 million in fiscal year 2021 were in comparison to the other financing
source of $30.3 million in the prior fiscal year related to the reclass of the bond anticipation notes
(BANS) from a current liability to a long term liability. The BANs were issued in fiscal year
2019 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.
Capital projects fund expenditures also decreased by $14.7 million. See discussion regarding
construction activity during the current year in the capital asset section below.
The debt service funds consist of the Bond Redemption Fund and the Interest Fund. These funds
have combined total fund balances of $45.0 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
- 23 -
service funds was $6.2 million, which was a 16 percent change from the prior year and due to an
increase of transfers in of $2.6 million.
Proprietary funds. The County's proprietary funds provide the same type of information found
in the government -wide financial statements, but in more detail.
Unrestricted net position of the Kulaimano Elderly Housing Project (Kulaimano) at the end of the
year amounted to $269,349, and $615,225 for the Ouli Ekahi Affordable Housing Project (Ouli
Ekahi). Unrestricted net position for Kulaimano decreased by $399,213 and unrestricted net
position for Ouli Ekahi increased by $5,801. 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 $186.4 million increase in appropriations, the most significant reasons were due to $68.5
million of additional grant appropriations from the federal government relating to the County's
allocation of federal funds received under the Coronavirus Aid, Relief, and Economic Security
(CARES) Act that was passed through the State; $19.6 million of appropriations for the
Coronavirus State & Local Fiscal Recovery Funds; and $83.8 million in CDBG appropriations to
deal with the 2018 Kilauea eruption .
Differences between the final budget and the actual (budgetary basis) resulted in approximately
$9.3 million more revenues than expected and $33.1 million less expenditures than appropriated.
This is primarily due to the following factors:
• The positive variance of $9.3 million in revenues is comprised mostly of $22.4 million from
real property taxes that were offset by shortfalls of $7.2 million in intergovernmental
revenues and $3.4 million in charges for services.
Approximately $12.3 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 ($9.6 million) and general government ($1.5 million).
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, 2021 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 Mamalahoa Highway Widening; construction in progress as of
the end of the current fiscal year had reached $19.0 million with $5.1 million coming from
the current fiscal year; project was transferred to Infrastructure.
-24-
0 Construction continued on the Hawaii County Radio System Upgrade project; construction
in progress as of the current fiscal year had reached $15.8 million with $2.9 million coming
from the current fiscal year.
• Construction continued on the Ali`i Drive Culvert Rehabilitation project; construction in
progress as of the end of the current fiscal year had reached $8.8 million with $5.5 million
coming from the current fiscal year; project was transferred to Infrastructure.
• Construction continued on the Dr. Francis Wong Stadium Accessibility Improvements
project; construction in progress as of the end of the current fiscal year had reached $3.3
million with $3.1 million coming from the current fiscal year.
• Construction continued on the Pana`ewa Rainforest Zoo & Gardens and the Pana`ewa
Equestrian Center Accessibility Improvements projects; construction in progress as of the end
of the current fiscal year had reached $10.3 million with $8.7 million coming from the current
fiscal year.
0 Construction began on the Henry Street Rehabilitation project; construction in progress as of
the end of the current fiscal year had reached $1.5 million; project was transferred to
Infrastructure.
• Construction began on the Kilauea Avenue Rehabilitation project; construction in progress as
of the end of the current fiscal year had reached $5.5 million.
• $2.4 million of dedicated roads were received by the County in the current fiscal year.
Capital Assets
(net of depreciation)
June 30, 2021 and 2020
Primary Government
Governmental
Activities
Business -type Activities
Total
2021
2020
2021
2020
2021
2020
Land and improvements
$ 292,632,722
$ 278,888,359
$ 753,877
$ 753,877
$ 293,386,599
$ 279,642,236
Infrastructure assets
297,110,815
296,257,213
-
-
297,110,815
296,257,213
Ground and site improvements
-
-
40,505
44,852
40,505
44,852
Buildings and improvements
641,575,608
635,602,987
2,630,029
1,032,447
644,205,637
636,635,434
Easements
11,240,425
11,116,725
-
-
11,240,425
11,116,725
Equipment
65,571,550
58,412,276
82,786
86,717
65,654,336
58,498,993
Construction work in progress
74,050,724
80,330,951
74,050,724
80,330,851
Total
$1,382,181,844
$1,360,608,411
$3,507,197
$ 1,917,893
$1,385,689,041
$1,362,526,304
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 $400.9 million and State
Revolving Fund loans of $50.4 million. At the end of the current fiscal year, the County had total
bonded debt outstanding of $400.9 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 increased by $41.7 million (12 percent) during the current fiscal
year due to the issuance of $62.1 million of new bond proceeds, of which approximately $14.4
million, in addition to $15.6 million of premiums, were used to pay $30.0 million in bond
anticipation notes from the prior year.
-25-
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 $5.3 billion, which is in excess
of the County's outstanding general obligation debt. Currently the County's outstanding debt
represents 8 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 7.9
percent, which is 5.3 percent lower 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 0.58 million, with an approximately 55 percent decrease from the
previous year's count of 1.29 million.
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 2022. 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 people.
Act 1, 1s` Special Session 2021, which became law on July 8, 2021, authorizes the
counties to establish and administer their own transient accommodations tax (TAT) at a
maximum rate of 3 percent. On December 10, 2021, Mayor Mitchell D. Roth signed into
law Ordinance 21-89 which imposed a 3 percent HCTAT, which shall take effect on
January 1, 2022. Monies collected are to be deposited into the general fund as
unrestricted revenues.
At the end of the current fiscal year, unrestricted fund balance in the general fund was $56.5
million. The County has appropriated $32.1 million of this amount for spending in the 2022
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.
-26-
BASIC FINANCIAL STATEMENTS
-27-
COUNTY OF HAWAII
Statement of Net Position
June 30, 2021
Primary Government
Governmental Business -type Component
Activities Activities Total Unit
Assets
Current assets
Cash and cash equivalents (notes 3 and 14)
$ 130,962,566
$ 1,251,666
$ 132,214,232
$ 17,119,629
Restricted cash and cash equivalents (note 3)
172,545,467
44,717
172,590,184
-
Investments (note 3)
4,541,786
-
4,541,786
18,000,000
Restricted investments (note 3)
54,427,907
-
54,427,907
-
Receivables, net (note 4)
92,286,051
16,792
92,302,843
9,075,781
Receivable from improvement district
(notes 4 and 10)
117,082
-
117,082
-
Internal balances (note 5)
402,819
(402,819)
-
-
Inventories
8,321,240
-
8,321,240
1,438,500
Prepaid expenses
1,169,861
3,188
1,173,049
50,019
Other
1,477,103
-
1,477,103
-
Total current assets
466,251,882
913,544
467,165,426
45,683,929
Investments (note 3)
10,292,113
-
10,292,113
2,000,000
Restricted investments (note 3)
2,976,795
-
2,976,795
-
Restricted cash and cash equivalents (note 3 and 14)
-
72,694
72,694
888,225
Receivable from improvement district, excluding
current portion (notes 4 and 10)
4,094,716
-
4,094,716
-
Capital assets (notes 6, 8 and 14):
Utility plant in service, net
-
-
-
246,723,859
Infrastructure assets, net
297,110,815
-
297,110,815
-
Ground and site improvements, net
-
40,505
40,505
-
Buildings and improvements, net
641,575,608
2,630,029
644,205,637
-
Equipment, net
65,571,550
82,786
65,654,336
-
Easements, net
11,240,425
-
11,240,425
-
Preliminary survey and investigation charges
-
-
-
5,515,581
Land and improvements
292,632,722
753,877
293,386,599
5,267,919
Construction work in progress
74,050,724
-
74,050,724
44,999,376
Total capital assets, net
1,382,181,844
3,507,197
1,385,689,041
302,506,735
Total noncurrent assets
1,399,545,468
3,579,891
1,403,125,359
305,394,960
Total assets
1,865,797,350
4,493,435
1,870,290,785
351,078,889
Deferred Outflows of Resources
Deferred loss on refunding
4,729,567
-
4,729,567
-
Deferred outflow related to pensions and other
post employment benefits (notes 13 and 14,
204,507,522
-
204,507,522
10,072,803
Total deferred outflows of resources
209,237,089
-
209,237,089
10,072,803
Total Assets and Deferred Outflows ofResource�
2,075,034,439
4,493,435
2,079,527,874
361,151,692
(Continued)
-28-
COUNTY OF HAWAII
Statement of Net Position
June 30, 2021
(Concluded)
Primary Government
Governmental
Business -type
Component
Activities
Activities
Total
Unit
Liabilities
Current liabilities:
Accounts payable and accrued liabilities
$ 24,709,103
$ 86,297
$ 24,795,400
$ 5,900,022
Accrued payroll
12,556,381
-
12,556,381
1,961,911
Advance collections - intergovernmental
67,336,655
9,134
67,345,789
-
Interest due on long-term debt
6,325,974
6,233
6,332,207
475,544
Bonds and loans payable, current portion net
(notes 10 and 14)
36,770,859
41,335
36,812,194
6,214,530
Compensated absences, current portion (note 10)
10,869,239
-
10,869,239
629,515
Claims and judgments, current portion
(notes 10, 12 and 14)
4,587,189
-
4,587,189
97,888
Capital leases, current portion (notes 8 and 10)
3,794,428
-
3,794,428
-
Landfill costs payable, current portion
(notes 9 and 10)
1,840,695
-
1,840,695
-
Customers' deposits
-
-
-
284,487
Other
4,390,280
-
4,390,280
-
Total current liabilities
173,180,803
142,999
173,323,802
15,563,897
Noncurrent liabilities:
Bonds and loans payable, net
(notes 10 and 14)
480,309,983
59,356
480,369,339
61,236,896
Compensated absences (note 10)
37,554,256
-
37,554,256
1,400,153
Claims and judgments (notes 10, 12 and 14)
19,670,629
-
19,670,629
282,112
Capital leases (notes 8 and 10)
6,955,478
-
6,955,478
-
Landfill costs payable (notes 9 and 10)
9,811,305
-
9,811,305
-
Customers' deposits
-
-
-
15,835,180
Net pension liability (notes 13 and 14)
697,394,658
-
697,394,658
35,290,257
Net OPEB liability (notes 13 and 14)
372,965,689
-
372,965,689
14,393,814
Other
20,005,705
-
20,005,705
-
Total noncurrent liabilities
1,644,667,703
59,356
1,644,727,059
128,438,412
Total liabilities
1,817,848,506
202,355
1,818,050,861
144,002,309
Deferred Inflows of Resources
Deferred inflows related to pensions and other
post employment benefits (notes 13 and 14)
72,212,680
-
72,212,680
4,847,398
Deferred inflows - other
2,782,474
-
2,782,474
182,390
Total Deferred Inflows of Resources
74,995,154
-
74,995,154
5,029,788
Total Liabilities and Deferred
Inflows of Resources
1,892,843,660
202,355
1,893,046,015
149,032,097
Net Position
Net investment in capital assets
917,612,276
3,406,506
921,018,782
232,086,655
Restricted for:
Debt service (note 10)
45,036,566
-
45,036,566
-
Highways, streets and abandoned vehicles
67,356,887
-
67,356,887
-
Public access open space
21,512,564
-
21,512,564
-
Disaster and emergencies
5,729,501
-
5,729,501
Other
6,569,296
-
6,569,296
-
Unrestricted
(881,626,311)
884,574
(880,741,737)
(19,967,060)
Total net position
$ 182,190,779
$ 4,291,080
$ 186,481,859
$ 212,119,595
See accompanying notes to the basic financial statements
-29-
COUNTY OF HAWAII
Statement of Activities
For the Fiscal Year Ended June 30, 2021
Functions/Programs
Primary government:
Governmental activities:
General government
Public safety
Highways and streets
Health, education and welfare
Culture and recreation
Sanitation
Interest on long-term debt
Program Revenues
Operating Capital
Charges for Grants and Grants and
Expenses Services Contributions Contributions
$ 88,736,125 $
353,319,886
71,625,009
48,213,864
25,092,892
61,260,244
13,811,108
894,631 $
6,306,227
17,414,046
1,030,983
1,147,130
25,370,090
4,794,350 $
116,953,162
4,523,255
36,840,042
26,115
2,099,396
3,789,279
13,457
19,406,797
18,407
164,200
5,380,197
Total governmental activities 662,058,128 52,163,107 165,236,320 28,772,337
Business -type activities:
Health, education and welfare 740,211 485,498 262,821 -
Total primary government $ 662,798,339 $ 52,648,605 $ 165,499,141 $ 28,772,337
Component unit:
Water (note 14)
$ 60,099,257 $ 51,392,295 $ - $ 4,346,580
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, as previously stated
Prior period adjustment
Net position, beginning of year, as restated
Net position, end of year
See accompanying notes to the basic financial statements.
-30-
Net (Expense) Revenue and Changes in Net Position
Primary Government
Governmental Business -type Component
Activities Activities Total Unit
$ (79,257,865) $
- $ (79,257,865) $ -
(230,046,040)
- (230,046,040) -
(30,280,911)
- (30,280,911) -
(10,324,432)
- (10,324,432) -
(23,755,447)
- (23,755,447) -
(28,410,561)
- (28,410,561) -
(13,811,108)
- (13,811,108) -
(415,886,364) - (415,886,364) -
- 8,108 8,108 -
(415,886,364) 8,108 (415,878,256) -
- - - (4,360,382)
359,304,950
-
359,304,950
-
8,166,880
-
8,166,880
-
8,259,374
-
8,259,374
-
18,763,374
-
18,763,374
-
50,287,510
-
50,287,510
-
556,488
-
556,488
-
552,408
392
552,800
381,448
1,225,852
-
1,225,852
-
(1,669,662)
1,669,662
-
-
445,447,174
1,670,054
447,117,228
381,448
29,560,810
1,678,162
31,238,972
(3,978,934)
150,411,099
2,612,918
153,024,017
217,335,813
2,218,870
-
2,218,870
(1,237,284)
152,629,969
2,612,918
155,242,887
216,098,529
$ 182,190,779 $ 4,291,080 $ 186,481,859 $ 212,119,595
-31-
COUNTY OF HAWAll
Governmental Funds
Balance Sheet
June 30, 2021
Assets
Cash and cash equivalents (note 3)
Investments (note 3)
Receivables, net (note 4)
Due from other governmental funds (note 5)
Due from other nongovernmental funds (note 5)
Receivables from other governments (note 4)
Inventories
Other
Total assets
Liabilities, Deferred Inflows and Fund Balances
Liabilities:
Accounts payable
Accrued payroll
Due to other governmental funds (note 5)
Advance collections -intergovernmental
Other
Total liabilities
Deferred Inflows of Resources:
Unavailable revenue (note 7)
Fund balances:
Nonspendable: Inventory & Prepaid
Restricted for:
Debt service (note 10)
Highways, streets and abandoned vehicles
Public access open space
Disaster and emergencies
Other
Committed to:
Budget stabilization
Lower Puna area
Rental assistance and subsidy
Sanitation
Self insurance
Highways, streets and abandoned vehicles
Parks and recreational projects
Zoning change impact mitigation (fair share)
Other
Assigned to:
Subsequent year's budget
Other
Unassigned
Total fund balances
Total liabilities, deferred inflows, and fund balances
See accompanying notes to the basic financial statements.
Other Total
Capital Governmental Governmental
General Projects Funds Funds
$ 117,597,974 $ 75,606,113 $ 110,303,946 $ 303,508,033
15,410,058
22,976,795
33,851,748
72,238,601
31,566,298
-
3,078,658
34,644,956
1,932,210
593,396
2,687,722
5,213,328
-
-
402,819
402,819
23,030,999
10,074,764
24,535,332
57,641,095
8,321,240
-
-
8,321,240
1,609,209
797,666
240,089
2,646,964
199.467.988
$ 110.048.734
S 175,100,314
&Aa4.617.036
$ 10,815,809 $ 8,672,842 $ 5,220,452 $ 24,709,103
10,654,851
-
1,901,530
12,556,381
819,508
1,794,317
2,599,503
5,213,328
52,559,730
3,359,579
11,417,346
67,336,655
1,695,423
618,076
817,263
3,130,762
76,545,321
14,444,814
21,956,094
112,946,229
34,348,772
-
3,449,050
37,797,822
9,491,101
-
-
9,491,101
45,036,566 45,036,566
-
65,372,797
67,356,887
132,729,684
21,512,564
-
-
21,512,564
5,729,501
-
-
5,729,501
1,020,479
18,239,816
5,548,817
24,809,112
7,465,020
-
-
7,465,020
-
-
4,344,047
4,344,047
-
-
1,000,760
1,000,760
-
-
14,650,070
14,650,070
261,221
-
-
261,221
-
1,123,403
11,439,219
12,562,622
-
2,414,964
61,112
2,476,076
-
5,342,767
-
5,342,767
433,634
974,950
257,692
1,666,276
32,101,447
-
-
32,101,447
6,249,741
2,135,223
-
8,384,964
4,309,187
-
-
4,309,187
88,573,895
95,603,920
149,695,170
333,872,985
199.467.988
110.048.734
175.100314
484.6 77.036
-32-
COUNTY OF HAWAII
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position
June 30, 2021
Total fund balances - governmental funds $ 333,872,985
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
292,632,722
Infrastructure assets, net
297,110,815
Buildings and improvements, net
641,575,608
Equipment, net
65,571,550
Easements, net
11,240,425
Construction work in progress
74,050,724
Total capital assets, net
Deferred amounts on refunding, pension and other post employment benefits
are reported as deferred outflows of resources in the government -wide
financial statements but are not reported in the governmental fund statements
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)
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
(512,869,044)
Interest due on long-term debt
(6,325,974)
Capital leases
(10,749,906)
Compensated absences
(48,423,495)
Claims and judgments
(24,257,818)
Landfill costs payable
(11,652,000)
Pollution remediation
(18,719,518)
Underground storage tank liability
(1,775,000)
Net OPEB liability
(372,965,689)
Net pension obligation
(697,394,658)
Total long -teen liabilities
Unamortized gain on refunding
Deferred amounts related to pension and other post employment benefits are
reported as deferred inflows of resources in the government -wide financial
statements but are not are not reported in the governmental fund statements
Net position of governmental activities
See accompanying notes to the basic financial statements.
1,382,181,844
209,237,089
35,015,348
(1,705,133,102)
(770,705)
(72,212,680)
$ 182,190,779
-33-
COUNTY OF HAWAII
Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Fiscal Year Ended June 30, 2021
Other
Total
Capital
Governmental
Governmental
General
Projects
Funds
Funds
Revenues
Property taxes
$ 355,160,877
$ -
$ -
$ 355,160,877
Public service company taxes
8,166,880
-
-
8,166,880
Fuel taxes
-
-
18,763,374
18,763,374
Public utility franchise taxes
-
-
8,259,374
8,259,374
Licenses and permits
9,274,536
-
15,605,388
24,879,924
General excise tax surcharge
-
-
50,287,510
50,287,510
Intergovernmental
132,580,364
20,104,331
34,965,655
187,650,350
Charges for services
1,231,121
-
23,614,932
24,846,053
Investment earnings
570,161
(20,205)
6,503
556,459
Other
1,967,020
222,765
1,234,669
3,424,454
Total revenues
508,950,959
20,306,891
152,737,405
681,995,255
Expenditures
Current:
General government
44,627,497
- 2,431,690
47,059,187
Public safety
222,066,234
- 10,146,098
232,212,332
Highways and streets
4,265,844
- 21,426,032
25,691,876
Health, education and welfare
9,023,420
- 32,367,200
41,390,620
Culture and recreation
21,680,335
- 1,202,150
22,882,485
Sanitation
106,909
- 45,175,141
45,282,050
Pension and retirement
contributions (note 13)
60,957,749
- 9,704,394
70,662,143
Employees' health insurance
16,579,520
- 3,527,467
20,106,987
Other postemployment benefits
38,191,347
- -
38,191,347
Other
7,731,023
- 1,434,044
9,165,067
Debt service:
Principal
2,587,529
- 30,017,416
32,604,945
Interest
119,026
- 18,122,233
18,241,259
Capital outlay
15,787,961
56,651,090 -
72,439,051
Total expenditures
443,724,394
56,651,090 175,553,865
675,929,349
Excess (deficiency) of revenues
over (under) expenditures
65,226,565
(36,344,199) (22,816,460)
6,065,906
(Continued)
-34-
COUNTY OF HAWAII
Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Fiscal Year Ended June 30, 2021
(Concluded)
Other
Total
Capital
Governmental
Governmental
General
Projects
Funds
Funds
Other Financing Sources (Uses)
Sale of assets
$ 32,838
$ -
$ -
$ 32,838
Increase in capital leases (notes 8 and 10)
4,066,605
-
834,347
4,900,952
State Revolving Fund loans (note 10)
-
16,187,624
-
16,187,624
Issuance of bonds (note 10)
-
38,105,770
-
38,105,770
Premium on bonds (note 10)
2,159,683
15,585,571
17,745,254
Refunding bonds (note 10)
11,253,750
-
-
11,253,750
Payment to refunded bond escrow
agent (note 10)
(13,344,152)
-
-
(13,344,152)
Debt issuance costs
(69,281)
(263,546)
-
(332,827)
Transfers in (note 5)
-
12,521,600
73,960,702
86,482,302
Transfers out (note 5)
(65,611,181)
-
(20,871,121)
(86,482,302)
Total other financing sources (uses)
(61,511,738)
82,137,019
53,923,928
74,549,209
Net change in fund balances
3,714,827
45,792,820
31,107,468
80,615,115
Fund balances at beginning of year,
as previously stated
84,859,068
49,811,100
116,368,832
251,039,000
Prior period adjustment
-
-
2,218,870
2,218,870
Net fund balance at beginning of year,
as restated
84,859,068
49,811,100
118,587,702
253,257,870
Fund balances at end of year
$ 88,573,895
$ 95,603,920
$ 149,695,170
$ 333,872,985
See accompanying notes to the basic financial statements.
-35-
COUNTY OF HAWAII
Reconciliation of the Change in Fund Balances of Governmental Funds
to the Statement of Activities
For the Fiscal Year Ended June 30, 2021
Net change in fund balances - total governmental funds
Amounts reported for governmental activities in the statement of activities are
different because:
Capital outlays are reported as expenditures in governmental funds.
However, in the statement 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 68,008,087
Dedicated and contributed property 3,932,991
Depreciation expense and loss on disposals (50,367,645)
Excess of capital outlay over depreciation expense
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:
General obligation bonds, net of refunding
(66,308,500)
Premium on bond issuance
(17,745,254)
Deferred amount on refunding of bonds
132,902
State Revolving Fund loans
(16,187,624)
Capital leases
(4,900,952)
Total debt proceeds
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 cla rent year, these amounts consist of:
Bond principal retirement
24,501,656
Bond anticipation notes
30,000,000
State Revolving Fund loan repayments
3,181,134
Capital lease payments
4,922,155
Total long-term debt repayment
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.
$ 80,615,115
21,573,433
(105,009,428)
62,604,945
3,850,162
(Continued)
-36-
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, 2021
A receivable was recorded to recognize the special assessment charges that
the County will be collecting from the improvement district
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:
hicrease in compensated absences
Decrease in claims and judgments
Decrease in landfill clos ure/postclo sure care costs
Decrease in pollution remediation costs
Amortization of premium from bond issuance
Amortization of deferred loss on refunding
Amortization of gain on refunding
Net increase in accrued interest
Net increase to expenses related to net OPEB liability
Net increase to expenses related to pension and salaries and wages
Net additional expenses
Change in net position of governmental activities
See accompanying notes to the basic financial statements.
$ (2,930,796)
3,551,608
1,703,000
621,831
5,171,689
(695,228)
102,761
(149,071)
(492,867)
(43,393,344)
(Concluded)
2,437,000
(36,510,417)
$ 29,560,810
-37-
COUNTY OF HAWAII
General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balance
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2021
Actual
Variance
Original
Final
(Budgetary
Positive
Budget
Budget
Basis)
(Negative)
Revenues:
Taxes and assessments:
Property taxes
$ 332,630,000
S 332,798,750
$ 355,160,877
$ 22,362,127
Public service company taxes
9,000,000
9,000,000
8,166,980
(833,120)
Total taxes and assessments
341,630,000
341,798,750
363,327,757
21,529,007
Licenses and permits:
Nonbusiness licenses and permits
4,222,418
4,222,418
4,346,582
124,164
Business licenses
2,086,856
2,086,856
1,789,455
(297,401)
Street use
3,114,303
3,114,303
3,138,499
24,196
Total licenses and permits
9,423,577
9,423,577
9,274,536
(149,041)
Intergovernmental:
Federal:
Programs for the aged
2,527,410
2,527,410
2,088,606
(438,804)
Community development block grants
-
88,596,516
88,596,516
-
Law enforcement
4,210,095
5,368,410
3,413,316
(1,955,094)
Other
5,457,522
96,576,401
95,202,951
(1,373,450)
Total federal
12,195,027
193,068,737
189,301,389
(3,767,348)
State:
Emergency medical services
17,177,792
21,984,337
21,613,246
(371,091)
Other
9,166,062
9,332,105
6,260,216
(3,071,889)
Total State
26,343,854
31,316,442
27,873,462
(3,442,980)
Total intergovernmental revenue
38,538,881
224,385,179
217,174,851
(7,210,328)
Charges for services:
General government
4,922,517
4,922,517
3,360,445
(1,562,072)
Culture and recreation
1,476,850
1,476,850
283,749
(1,193,101)
Highways and streets
1,212,000
1,212,000
553,046
(658,954)
Public safety
110,268
110,268
125,403
15,135
Total charges for services
7,721,635
7,721,635
4,322,643
(3,398,992)
Fines and forfeitures
2,316,300
2,316,300
718,159
(1,598,141)
Rents
189,500
189,500
158,507
(30,993)
(Continued)
-38-
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, 2021
Actual
Variance
Original
Final
(Budgetary
Positive
Budget
Budget
Basis)
(Negative)
Revenues (continued):
Interest and penalties
S 125,000
S 125,000
S 1,055,811
S 930,811
Miscellaneous
5,176,917
5,546,411
4,744,134
(802,277)
Total revenues
405,121,810
591,506,352
600,776,398
9,270,046
Expenditures:
Current:
General government:
Finance
12,722,399
12,948,096
11,327,330
1,620,766
General government building
6,415,392
6,300,796
6,138,946
161,850
Legislative
4,096,528
3,965,330
3,579,134
386,196
Automotive equipment
4,401,880
4,352,880
3,519,417
833,463
Law
3,053,880
3,053,880
2,590,273
463,607
Research and development
2,588,028
2,853,447
2,705,036
148,411
Planning and zoning
4,046,608
4,383,587
4,212,270
171,317
Mayor's office
1,838,115
2,042,543
1,888,422
154,121
Engineering
665,463
662,532
597,914
64,618
Information technology
3,096,548
3,096,548
2,859,886
236,662
Human resources
2,052,729
2,063,157
1,939,033
124,124
Public works administration
1,420,823
1,484,318
1,387,648
96,670
Elections
1,684,859
1,684,859
1,214,239
470,620
Legislative auditor
856,846
856,846
632,615
224,231
Total general government
49,940,098
49,748,819
44,592,163
5,156,656
Public safety:
Police department
72,091,319
73,315,634
68,791,672
4,523,962
Fire department
51,922,627
53,842,091
47,123,028
6,719,063
Prosecuting attorney
10,869,706
11,043,049
8,649,441
2,393,607
Protective inspection
3,761,132
3,865,727
3,813,137
52,590
Liquor control
2,042,436
2,161,463
1,784,880
376,583
Flood control
330,000
330,000
330,000
-
Civil defense agency
2,219,324
2,439,576
2,270,533
169,043
Animal control
1,967,135
1,967,135
1,749,545
217,590
Total public safety
145,203,679
148,964,674
134,512,236
14,452,438
Highways and streets:
Mass transit
3,665,860
3,665,860
2,122,260
1,543,600
(Continued)
-39-
COUNTY OF HAWAII
General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balance
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2021
Actual
Variance
Original
Final
(Budgetary
Positive
Budget
Budget
Basis)
(Negative)
Expenditures (continued):
Current (continued):
Health, education and welfare:
Elderly activities
$ 4,883,206
$ 4,820,129
$ 3,040,977
$ 1,779,152
Office of aging
4,295,883
4,297,883
4,150,044
147,839
Education
52,650
52,650
24,022
28,628
Social programs
2,500,000
2,500,000
2,454,775
45,225
Cemeteries
444,430
385,430
374,663
10,767
Physical examination
133,826
133,825
133,825
-
Total health, education and welfare
12,309,995
12,189,917
10,178,306
2,011,611
Culture and recreation:
Community music
271,644
229,644
215,402
14,242
Organized recreation:
Maintenance
10,907,752
10,722,752
10,660,820
61,932
Recreation
2,989,318
3,243,118
3,025,427
217,691
Aquatics
2,431,329
2,368,080
2,139,521
228,559
Hoolulu park complex
977,559
979,559
948,856
30,703
Administration
2,315,808
2,431,358
2,341,204
90,154
Children's zoo
830,834
849,834
838,489
11,345
Summer/Tntersession
481,185
486,185
192,661
293,524
Culture and arts
281,413
336,413
251,801
84,612
Elderly activities administration
600,422
695,248
555,733
139,515
Total culture and recreation
22,087,264
22,342,191
21,169,914
1,172,277
Sanitation:
Environmental management
1,193,080
3,530,604
3,509,966
20,638
Pension and retirement contributions
66,976,132
56,917,237
56,778,029
139,208
Employees' health insurance
18,200,000
16,671,545
16,671,544
1
Other postemployment benefits
23,202,000
38,059,358
38,059,358
-
Other
15,846,782
103,032,285
94,857,781
8,174,504
Total current
357,624,890
455,122,490
422,451,557
32,670,933
(Continued)
COUNTY OF HAWAII
General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2021
Expenditures (continued):
Capital Outlay:
Community Development Block
grants (HUD)
HOME Program
Total capital outlay
Total expenditures
(Concluded)
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
$ 150,000
$ 88,846,516 $ 98,657,145
$ 189,371
200,000
200,000 -
200,000
350,000
89,046,516 88,657,145
389,371
357,974,890
544,169,006 511,108,702
33,060,304
Excess of revenues over expenditures 47,146,920 47,337,346 89,667,696 42,330,350
Other financing sources (uses):
Transfers out:
Housing Fund
Solid Waste Fund
Sewer Fund
Golf Course Fund
Capital Project Fund
Self Insurance Fund
Disaster/Emergency Fund
Public Access, Open Space, and Natural
Resources Preservation Fund
Public Access, Open Space, and Natural
Resources Preservation Maintenance Fund
Budget Stabilization Fund
Debt Service Fund
Total transfers out
Total other financing uses
Excess (deficiency) of revenues and other
sources over (under) expenditures and other uses
Fund balance at beginning of year
Fund balance at end of year
See accompanying notes to the basic financial statements.
(2,288,410)
(2,294,410)
(1,750,205)
544,205
(17,954,687)
(17,954,687)
(17,954,687)
-
(1,876,419)
(1,876,419)
(1,876,419)
-
(711,228)
(711,228)
(711,228)
-
-
(52,673)
(52,673)
-
(250,000)
(250,000)
(250,000)
-
(6,652,600)
(7,302,600)
(7,103,218)
199,382
(831,575)
(350,325)
(307,319)
43,006
(250,000)
(250,000)
(250,000)
-
(46,878,284)
(46,878,284)
(46,878,284)
-
(77,693,203)
(77,920,626)
(77,134,033)
786,593
(77,693,203)
(77,920,626)
(77,134,033)
786,593
(30,546,283)
(30,583,280)
12,533,663
43,116,943
84,859,068
84,859,068
84,859,068
-
$ 54,312,785 $ 54,275,788 $ 97,392,731 $ 43,116,943
-41-
COUNTY OF HAWAII
Proprietary Funds
Statement of Net Position
June 30, 2021
Assets
Current assets:
Cash and cash equivalents (note 3)
Restricted cash and cash equivalents (note 3)
Imprest fund (note 3)
Receivables, net (note 4)
Prepaid expenses
Total current assets
Noncurrent assets:
Restricted cash and cash equivalents (note 3)
Capital assets (note 6):
Land and site improvements
Buildings and equipment
Less accumulated depreciation
Total capital assets
Total noncurrent assets
Total assets
Liabilities
Current liabilities:
Accounts payable
Due to other governmental funds (note 5)
Security deposits payable from restricted assets
Deferred revenue
Interest payable
Notes payable, current portion (note 10)
Total current liabilities
Noncurrent liabilities:
Notes payable (note 10)
Total liabilities
Net Position
Net investment in capital assets
Unrestricted
Total net position
See accompanying notes to the basic financial statements.
Business -type Activities -
Enterprise Funds
Kulaimano
Ouli Ekahi
Elderly
Affordable
Housing
Housing
Project
Project Total
$ 689,449 $ 562,067 $ 1,251,516
14,259
30,458
44,717
50
100
150
2,657
14,135
16,792
3,188
-
3,188
709,603
606,760
1,316,363
- 72,694 72,694
511,000 515,727 1,026,727
2,922,514 1,025,473 3,947,987
(1,312,043) (155,474) (1,467,517)
2,121,471 1,385,726 3,507,197
2,121,471 1,458,420 3,579,891
2,831,074 2,065,180 4,896,254
16,545 26,493 43,038
402,819 - 402,819
14,259 29,000 43,259
398 8,736 9,134
6,233 - 6,233
- 41,335 41,335
440,254 105,564 545,818
- 59,356 59,356
440,254 164,920 605,174
2,121,471 1,285,035 3,406,506
269,349 615,225 884,574
$ 2,390,820 $ 1,900,260 $ 4,291,080
-42-
COUNTY OF HAWAII
Proprietary Funds
Statement of Revenues, Expenses, and Changes in Fund Net Position
For the Fiscal Year Ended June 30, 2021
Operating revenues:
Rental receipts from tenants
Rental subsidy from federal government - HUD
Laundry receipts
Other
Total operating revenues
Operating expenses:
Utilities
General and administration
Maintenance and repairs
Depreciation (note 6)
Total operating expenses
Operating income (loss)
Nonoperating revenues (expenses):
Investment income
Interest expense
(Loss) on disposal of assets
Total nonoperating revenues (expenses)
Capital contributions
Transfers
Change in net position
Net position, beginning of year
Net position, end of year
See accompanying notes to the basic financial statements.
Business -type Activities -
Enterprise Funds
Kulaimano
Ouli Ekahi
Elderly
Affordable
Housing
Housing
Project
Project Total
$ 143,530 $ 340,213 $ 483,743
262,821
-
262,821
1,499
-
1,499
-
256
256
407,850
340,469
748,319
42,128
64,358
106,486
211,667
186,913
398,580
54,220
62,245
116,465
66,476
31,774
98,250
374,491
345,290
719,781
33,359
(4,821)
28,538
382
10
392
(20,371)
-
(20,371)
(59)
-
(59)
(20,048)
10
(20,038)
1,669,662
-
1,669,662
1,682,973
(4,811)
1,678,162
707,847
1,905,071
2,612,918
$ 2,390,820 $
1,900,260
$ 4,291,080
-43-
COUNTY OF HAWAII
Proprietary Funds
Statement of Cash Flows
For the Fiscal Year Ended June 30, 2021
Business -type Activities -
Enterprise Funds
Kulaimano
Ouli Ekabi
Elderly
Affordable
Housing
Housing
Project
Project
Total
Cash Flows from Operating Activities
Receipts from tenants
$
143,485
$ 343,381
$ 486,866
Receipts from federal government - HUD
262,821
-
262,821
Payments to suppliers for goods and services
(289,834)
(301,203)
(591,037)
Net cash provided by operating activities
116,472
42,178
158,650
Cash Flows from Capital and Related Financing Activities
Principal paid on notes payable
(69,952)
(18,582)
(88,534)
Interest paid on notes payable
(21,698)
-
(21,698)
Purchase of capital assets
(15,371)
(2,580)
(17,951)
Net cash used in capital and related financing activities
(107,021)
(21,162)
(128,183)
Cash Flows from Investing Activities
Proceeds from maturities of investments
2,800,000
-
2,800,000
Purchase of investments
(2,800,000)
-
(2,800,000)
Interest on investments
384
10
394
Net cash provided by investing activities
384
10
394
Net increase in cash and cash equivalents
9,835
21,026
30,861
Cash and cash equivalents at beginning of year (including
restricted cash and cash equivalents)
693,923
644,293
1,338,216
Cash and cash equivalents at end of year (including
restricted cash and cash equivalents)
$
703,758
$ 665,319
$ 1,369,077
Reconciliation of Operating Income to Net Cash
Provided by Operating Activities
Operating income (loss)
$
33,359
$ (4,821)
$ 28,538
Adjustments to reconcile operating income (loss) to net cash
provided by operating activities:
Depreciation expense
66,476
31,774
98,250
Change in assets and liabilities:
Receivables, net
(515)
(4,356)
(4,871)
Prepaid expenses
(1,056)
-
(1,056)
Accounts and other payables
18,152
12,313
30,465
Deferred revenue
56
7,268
7,324
Net cash provided by operating activities
$
116,472
$ 42,178
$ 158,650
Supplemental Disclosure of Noncash Capital and Related
Financing Activities
Capital contributions
$
1,669,662
$ -
$ 1,669,662
See accompanying notes to the basic financial statements
COUNTY OF HAWAII
Fiduciary Funds
Statement of Fiduciary Net Position
June 30, 2021
Assets
Cash and cash equivalents (note 3)
Investments (note 3)
Receivables:
Due from other agency funds
Other receivables
Total receivables
Total assets
Liabilities
Accrued liabilities
Advances payable
Total liabilities
Net Position
Held in trust for other parties
Total net position
Private -
Purpose Custodial
$ 748,413 $ 4,731,177
2,071,199 34,479
- 9,298
- 276,015
- 285,313
2,919,612 5,050,969
2,095,602
15,811
2,111,413
2,819,612 2,939,556
$ 2,819,612 $ 2,939,556
See accompanying notes to the basic financial statements.
-45-
COUNTY OF HAWAII
Fiduciary Funds
Statement of Changes in Fiduciary Net Position
For the Fiscal Year Ended June 30, 2021
Private -
Purpose
Custodial
Trusts
Funds
Additions
Tax collections for state
$ -
$ 25,298,012
Special assessment collections
-
1,175,424
Return of assessments
-
232,400
Developer deposit
-
143,371
Employee collections
-
395,534
Lapsed checks
-
28,183
Collections from vehicle registrations and licenses
-
123,698
Investment earnings
293,571
217
Total additions
293,571
27,396,839
Deductions
Grant payments
16,809
-
Payment of taxes to state
-
24,204,915
Payments state, not for profits and
-
improvement district
-
947,794
Contributions to debt repayment
-
191,277
Administrative charges
-
1,122,122
Community facility district expenses
-
130,917
Reissuance of checks
-
29,867
Reimbursements to employees
-
363,829
Investment Fees
15,822
-
Other
-
8,774
Total deductions
32,631
26,999,495
Change in net position
260,940
397,344
Net position, beginning of year, as previously stated
2,558,672
-
Prior period adjustment
-
2,542,212
Net position, beginning of year, as restated
2,558,672
2,542,212
Net position, end of year
$ 2,819,612
$ 2,939,556
See accompanying notes to the basic financial statements.
-46-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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 Annual Comprehensive Financial
Report (ACFR).
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
-47-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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 Kek5ana6`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.
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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 custodial). 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 fund financial 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.
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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, 2021
The County reports the following fiduciary funds:
Private -Purpose Trust Funds — 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.
Custodial 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 (with balances adjusted pursuant to
GASB 84)
• Flexible Spending Account
• Lapsed Warrants Fund
• Non -Profit License Plates Fund
• Organ and Tissue Education Fund
• Business Improvement District 1-Kailua
Basis of Accounting
Basis of accounting refers to the period in which revenues and expenditures (or expenses) are
recognized in the accounts and reported in the basic financial statements. Basis of accounting
relates to the timing of the measurements made, regardless of the measurement focus applied.
The government -wide financial statements and the proprietary, fiduciary and component unit
fund financial statements are presented on an accrual basis of accounting. The governmental
funds in the fund financial statements are presented on a modified accrual basis.
Accrual Basis - Revenues are recognized when earned and expenses are recognized when the
related obligation is incurred.
Modified Accrual Basis - Revenues are recorded when susceptible to accrual (that is, both
measurable and available). "Measurable" means the amounts are determinable. "Available"
means the amounts are collectible within the current period or soon enough thereafter (one
year for intergovernmental revenues) to be used to pay liabilities of the current period.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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, Codification 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, 2021
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 1 each year on assessed valuation as of
January 1. The taxes become a lien on the property assessed as of the levy date. Taxes are
due and payable in two equal annual installments on August 20 and February 20. Accordingly,
real property taxes receivable as of June 30 are delinquent. Each delinquent installment bears
interest at 1 % per month and penalties of up to 10% of the amount due. Assessments are
based on 100% of estimated fair market values prior to the application of exemptions or
preferential assessments.
The County provides real property tax abatement under five programs — Enterprise Zone,
Historic Residential Dedication, Low and Moderate Income Housing, Agricultural Use
Programs, and Solar Water Heater Credit:
Enterprise Zone Exemption - Section 19-89.3 of the Hawaii County Code provides buildings
or other like structures which are built as a result of new construction by a qualified business
within an enterprise zone to be exempt except for the minimum tax from real property taxes
for a period of three years. The purpose of this program is to stimulate business and industrial
growth. A qualified business in an enterprise zone must satisfy the requirements of Chapter 31
of the Hawaii County Code and section 208E, Hawaii Revised Statutes.
Historic Residential Dedication Exemption — Section 19-89.1 of the Hawaii County Code
and Rule 36 of the Rules and Regulations of the Director of Finance provides an exemption to
encourage the preservation of residential structures that have been placed on the Hawai `i
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, 2021
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 1
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 Rule 37 of the Rules and Regulations of the Director of Finance provides an exemption
for a housing project which is owned and operated by a nonprofit or limited distribution
mortgagor or by a qualified entity from taxation. Must participate in long-term housing
project that have regulatory agreements mandating rent levels, occupancy of the project is
limited to the elderly, handicapped, low or moderate income families. Applicants must submit
an application form along with a copy of the recorded regulatory agreement. The exemption
is equal to 100% of the assessed value for the portion of the real property that is dedicated as
low- and moderate -income rentals. If the entire property is dedicated, then the net taxable is
zero but the property is still subject to the minimum tax per Section 19-90(e) of the 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 for this program must be agricultural. An application form must be filed
along with a plot plan and provide details as to what agricultural activities is conducted on the
property. Upon review and approval, the application is effective as of January 1 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, 2021
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,
2021 is as follows:
Tax Abatement Program Amount of Taxes Abated - as defined by GASB 77
Enterprise Zone $8,962
Historic Residential Dedication $260,814
Low and Moderate Income Housing $821,226
Agricultural Use Programs $29,547,154
Solar Water Heater Credit $32,770
Subsequent Events Act 1, 1" Special Session 2021, which became law on July 8, 2021,
authorizes the counties to establish and administer their own transient accommodations tax
(TAT) at a maximum rate of 3 percent. On December 10, 2021, Mayor Mitchell D. Roth
signed into law Ordinance 21-89 which imposed a 3 percent HCTAT, which shall take effect
on January 1, 2022. Monies collected are to be deposited into the general fund as unrestricted
revenues.
Inventories
Inventories consist of materials and supplies and are reported as expenditures at the time of
consumption (consumption method). Police and fire department inventories are stated using
the first in, first out (FIFO) method. Other inventories are stated at average cost.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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, 2021 of $1,020,479 are reflected as a restriction of general fund balance.
Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads,
bridges, curbs and gutters, streets and sidewalks, drainage systems, lighting systems, and
similar items), are reported in the applicable governmental or business -type activities columns
in the government -wide financial statements. Capital assets are defined by the County as
assets with an initial, individual cost of more than $1,000 and an estimated useful life in
excess of one year. Such assets are recorded at historical cost or estimated historical cost if
purchased or constructed. Donated capital assets are recorded at acquisition value if available
or if not, at estimated fair market value at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or
materially extend the life of the asset are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed.
Interest incurred during the construction phase of capital assets of business -type activities is
included as part of the capitalized value of the assets constructed.
Capital assets of the primary government and enterprise fund are depreciated using the
straight-line method over the following estimated useful lives of the assets:
Assets
Infrastructure
Buildings and improvements
Ground and site improvements
Equipment
Easements
Years
20 to 100 years
50 to 100 years
20 to 50 years
5 to 40 years
Dependent on terms of easement agreement
Deferred Outflows of Resources and Deferred Inflows of Resources
Deferred outflows of resources represent a consumption of net position that applies to a future
period and will not be recognized as an outflow of resources (expense or expenditure) until
that time. The County has three items that qualifies for reporting in this category. The County
reports the deferred 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.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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).
Long-term Obligations
The County reports long-term debt of governmental funds at face value on the government -
wide statement of net position. Certain other governmental fund obligations not expected to
be financed with current available resources are also reported on the government -wide
statement of net position. Long-term debt and other obligations financed by the proprietary
funds are reported as liabilities in those funds.
Compensated Absences
Employees earn vacation credit at the rate of one and three-quarter working days for each
month of service. Up to ninety days of vacation leave credits can be accumulated per
employee. In addition, employees who work overtime can elect to take compensatory time off
instead of overtime pay. The time off is earned at the rate of one -and -a -half hours for each
hour of overtime worked. There is no statutory limit to the amount of compensatory time off
an employee can accumulate. Both compensatory time off and vacation credits are converted
to pay upon termination of employment.
A liability for these amounts is reported in the governmental funds only if they have matured,
for example, as a result of employee resignations and retirements. All vacation and
compensatory time off pay is accrued in the government -wide statement of net position along
with the estimated liability for social security and Medicare taxes and employers' retirement
contributions on those amounts.
Sick leave accumulates without limit. Sick leave can be taken only in the event of illness and
is not convertible to pay upon termination of employment; therefore there is no related
liability. However, a County employee who retires or leaves government service in good
standing with 60 days or more of unused sick leave is entitled to additional service credit in
the Employees' Retirement System of the State of Hawaii. Accumulated sick leave at
June 30, 2021 totaled $78,337,000 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
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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
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 EUTF's fiduciary net position have been determined on the
same basis as they are reported for EUTF. For this purpose, EUTF recognizes benefit
payments when due and payable in accordance with the benefit terms. Investments are
reported at fair value, except for investments in commingled and money market funds, which
are reported at net asset value (NAV). The NAV is based on the fair value of the underlying
assets held by the respective fund less its liabilities.
Operating Revenues and Expenses
Revenues and expenses are distinguished between operating and nonoperating items for 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
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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
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 and prepaids 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.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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.
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 Dates of 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 implemented these requirements as of and for the fiscal year
ended June 30, 2021. See additional discussion at the bottom of this section.
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.
In June 2018, GASB issued Statement No. 89, Accounting for Interest Cost Incurred
Be/ore 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 August 2018, GASB issued Statement No. 90, Majority Equity Interests -An
Amendment of GASB Statements No. 14 and No. 61. The objectives of this Statement are
to improve the consistency and comparability of reporting a government's majority
equity interest in a legally separate organization and to improve the relevance of financial
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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 and did not have an impact on the County's financials for the year ending June
30, 2021.
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, 2021. 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 that are not yet effective will have on its financial statements.
In March 2020, GASB issued Statement No. 93, Replacement oflnterbank 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). Certain
sections of the requirements of this Statement are effective beginning with reporting
periods that begin after June 15, 2021. The County has not yet determined the effect these
requirements that are not yet effective 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
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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.
In October 2021, GASB issued Statement No. 98, The Annual Comprehensive Financial
Report. The Statement established the term Annual Comprehensive Financial Report to
replace the former reference of Comprehensive Annual Financial Report. The requirements of
this Statement are effective for fiscal years ending after December 15, 2021. The County has
chosen to early implement this Statement.
Adoption of New Accounting Principle
The County and Department implemented GASB 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. As a result of this new Statement, the
Geothermal Asset fund of the County that was previously reported as a Private Purpose Trust
fund is now being reported as a Special Revenue fund and being included as a nonmajor
governmental fund. The County's net position as of June 30, 2020 was restated and increased
by $2,218,870, which represents the net position of the fund at June 30, 2020.
Implementation of GASB Statement No. 84, also, resulted in the restatement of net position
for the custodial funds as of June 30, 2020, with an increase of $2,542,212.
2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
Annual Budget
The County follows these procedures in establishing its operating and capital budgets:
On or before March 1, the Mayor submits to the County Council proposed operating and
capital projects budgets for the fiscal year commencing the following July 1. The
operating budget includes proposed expenditures for the general fund and special revenue
funds, and the means of financing them. A project -length budget is submitted to the
County Council for the capital projects fund.
The Mayor submits to the County Council amendments to the proposed operating and
capital budgets within ten working days after the close of the state legislature, but not
later than May 5.
The County Council conducts public hearings on the proposed operating and capital
budgets after March 1 but prior to the first reading on the budget bills, which must be
after May 5.
-62-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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 2020-21 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 $186.4 million in the general fund and $45.4
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,
Short -Term Vacation Rental Enforcement Fund, and Geothermal Asset Fund.
Appropriations for the operating budget lapse at the end of the fiscal year to the extent
that they have not been expended or encumbered. Appropriations for capital
expenditures that are not encumbered lapse at the end of two fiscal years following the
fiscal year that the appropriation was made.
Formal budgetary integration is employed as a management control device during the
year for the General Fund, special revenue funds, and Capital Projects Fund. 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.
- 63 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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, 2021:
Ending fund balance — GAAP basis $88,573,895
Encumbrance adjustments:
Beginning encumbrances and unexpended allotments 1,589,411
Ending encumbrances and unexpended allotments (3,204,431)
Other adjustments 10,433,856
Ending fund balance — Non-GAAP budgetary basis S 97392.731
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.
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, 2021 was $367,121,259 for the primary government and
$5,479,590 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 $384,725,504 at June 30, 2021. Of that amount, $383,176,012
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 $1,549,492
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
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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.
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 I 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.
-65-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
Following is a description of the valuation techniques used by the County to measure fair
value:
Government sponsored securities of $9,981,631 and certificates of deposits of
$62,291,449: 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 $2,071,199: Valued using quoted prices in active markets for
identical assets or liabilities that a government can access at the measurement date (Level
1).
The County's investments and maturities at June 30, 2021 are as follows:
Investments — Primary Government:
Certificates of deposit
Government sponsored securities
Investments — Private -Purpose Trusts:
Equity securities
Investments — Custodial Funds:
Government sponsored securities
Maturity (in years)
Fair Value Less than 1 1 — 5
$ 62,291,449 $ 54,963,319 $ 7,328,130
9,947,152 4,006,374 5,940,778
$ 72,238,601 S 58,969,693 $13.268,908
2,071,199 $ 2,071,199 $ --
$ 34,479 $ 34,479 $ --
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.
••
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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, 2021,
investments were distributed as follows: FTN Financial, 0.3%; Multi Bank Securities, 6.9%;
First Hawaiian Bank, 6.2%; Raymond James, 1.8%; Stifel Nicolaus & Company, 2.4%; Bank
of Hawaii, 32.9%; Territorial Savings 20.7%; Hawaii National Bank, 22.7% and Central
Pacific Bank, 6.1 %.
Restricted Cash and Cash Equivalents and Investments
Cash and cash equivalents and investments classified as restricted assets for the primary
government at June 30, 2021 amounted to $230,067,580.
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 $95,587,103 at June 30, 2021.
Cash and investments in the Bond Redemption Fund and the Interest Fund are restricted to
debt service related payments and amounted to $44,891,029.
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 $45,501,906.
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 $15,460,149.
Cash and investments in the Geothermal Asset Fund classified as restricted to compensating
persons impacted by geothermal energy development activities amounted to $2,267,372.
The restricted cash in the General Fund was comprised of cash restricted to costs incurred to
administer the liquor commission; cash restricted to the acquisition and maintenance of lands
or property entitlements for public outdoor recreation and education and cash and investments
restricted for disasters and emergencies. Such amounts totaled $1,020,479; $24,572,053 and
$650,078, 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 $14,259 and $30,458, respectively, at June 30, 2021.
-67-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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 $72,694 at June
30, 2021.
4. RECEIVABLES
Receivables as of June 30, 2021, for the County's individual major funds and other funds in
the aggregate, including the applicable allowances for uncollectible accounts, are as follows:
Governmental activities:
Real property taxes
Accounts receivable:
Sewer
Solid waste
Intergovernmental
Gross receivables
Less: allowance for
uncollectibles
Net total receivables
Capital
General
Projects
Fund
Fund
$40,377,945
$ --
23,030,999
10,074,764
63,408,944
10,074,764
(8,811,647)
--
54.597.297
110,074,764
Other
Governmental
Funds
2,914,924
1,039,156
24,535,332
28,489,412
Total
$40,377,945
2,914,924
1,039,156
57,641,095
101,973,120
(875,422) (9,687,069)
27.613.990 S92,286,051
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. During
fiscal year 2021, the County issued $2,437,000 in general obligation bonds on behalf of
Improvement District No. 20, an agency fund. At June 30, 2021, the outstanding balance for
the Improvement Districts of $4,211,798 is reflected in the government -wide statement of net
position as a receivable (see Note 10).
Business -type activities:
Enterprise
Funds
Accounts receivable:
Rent
$25,113
Other
117
Gross receivables
25,230
Less: allowance for
uncollectibles
8,438)
Net total receivables
16 792
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
5. INTERFUND RECEIVABLES AND PAYABLES
Interfund receivables and payables consist of the following at June 30, 2021:
Receivable Fund Payable Fund
Amount
General fund Capital projects fund
$ 238,172
Other governmental funds
1,694,038
1,932,210
Capital projects fund General fund
5,451
Other governmental funds
587,945
593,396
Other governmental funds General fund
814,057
Capital projects fund
1,556,145
Other governmental funds
317,520
2,687,722
Total
�5,213,328
Other governmental funds Enterprise funds
L 402,819
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, 2021 consisted of the following:
Transfers out:
Capital Other
General Projects Governmental
Fund Fund Funds
Total
Transfers in:
Capital Projects Fund $ 52,673 $ -- $12,468,927
$12,521,600
Other governmental funds 65,558,508 -- 8A 2,194
73,960,702
65.611.181 S -- 20.87L121
$86.482,302
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.
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
6. CAPITAL ASSETS
Capital asset activity for
the fiscal year ended June 30, 2021 for the County
was as follows:
Balance
Balance
July 1,
Retirements/
June 30,
2020
Additions
Transfers
2021
Governmental activities:
Capital assets not being depreciated:
Land and
improvements
$ 278,888,359
$ 13,744,363
$ --
$ 292,632,722
Easements
11,099,386
140,940
--
11,240,326
Construction work in
progress
80,330,851
48,830,367
(55,110,494)
74,050,724
Total capital assets not
being depreciated
370,318,596
62,715,670
(55,110,494)
377,923,772
Capital assets being depreciated:
Buildings and
improvements
789,878,379
19,506,181
(15,000)
809,369,560
Equipment
169,325,872
17,884,495
(4,680,714)
182,529,653
Easements
456,639
--
--
456,639
Infrastructure
662,471,064
26,945,226
689,416,290
Total capital assets
being depreciated
1.622,131,954
64,335,902
(4,695,714)
1,681,772,142
Less accumulated depreciation for:
Buildings and
improvements
(154,275,392)
(13,527,999)
9,439
(167,793,952)
Equipment
(110,913,596)
(10,091,329)
4,046,822
(116,958,103)
Easements
(439,300)
(17,240)
--
(456,540)
Infrastructure
(366,213,851)
(26,091,624)
--
(392,305,475)
Total accumulated
depreciation
(631,842,139)
(49,728,192)
4,056,261
(677,514,070)
Total capital assets
being depreciated,
net
990,289,815
14,607,710
(639,453)
1,004,258,072
Governmental
activities capital
assets, net S1,360,608,411 & 77,323, 880 ($55,749,947) $1,382,181, 444
-70-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
Balance
July 1,
2020
Business -type activities:
Capital assets not being depreciated:
Land
$ 753,877
Capital assets being depreciated:
Buildings and
improvements
2,129,224
Ground and site
improvements
272,850
Equipment
137,785
Total capital assets
being depreciated
2,539,859
Less accumulated depreciation for:
Buildings and
improvements
(1,096,777)
Ground and site
improvements
(227,999)
Equipment
(51,067)
Total accumulated
Depreciation
(1,375,843)
Total capital assets
being depreciated,
net
1,164,016
Business -type
activities capital
assets, net
1.917.893
Balance
Retirements/ June 30,
Additions Transfers 2021
$ -- $ -- $ 753,877
1,668,132 -- 3,797,356
-- -- 272,850
19,481 (6,634) 150,632
1,687,613 6( 634) 4,220,838
(70,550) --
(1,167,327)
(4,346) --
(232,345)
(23,354) 6,575
(67,846)
(98,250) 6,575
(1,467,518)
1,589,363 59
2,753,320
1. 363 (59l 3,507.197
-71-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
Depreciation expense was charged to functions/programs of the primary government as
follows:
Governmental activities:
General government
$ 3,056,950
Public safety
4,923,494
Highways and streets
27,993,790
Sanitation
7,781,866
Health, education and welfare
2,312,503
Culture and recreation
3,659,589
Total depreciation expense — governmental activities
49.728.192
Business -type activities:
Kula`imano Elderly Housing Project
$66,476
Ouli Ekahi Affordable Housing Project
31,774
Total depreciation expense — business -type activities
98 250
7. DEFERRED INFLOW OF RESOURCES
Deferred inflow of resources consists of the following at June 30, 2021:
Governmental activities:
Capital
Other
Total
General Projects
Governmental
Governmental
Fund Fund
Funds
Funds
Real property taxes
$ 34,166,376 $ --
$ --
$ 34,166,376
Liquor control revenue
182,396 --
--
182,396
Sewer revenue
-- --
2,081,739
2,081,739
Housing revenue
-- --
370,392
370,392
Solid waste revenue
-- --
996,919
996,919
Total presented in
fund financial
statements
34,348,772 --
3,449,050
37,797,822
Add deferred inflows
of resources related
to pensions & OPEB
72,212,680 --
--
72,212,680
Less adjustments for
accrual of revenues
(31,566,298) --
(3,449,050)
(35,015,348)
Total government -
wide financial
statements
74.995.154 $ --
$ --
74,995,154
-72-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
8. LEASES
The County leases machinery and equipment under noncancellable leases expiring at various
dates through April 2026. 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 $20,931,121 and $4,304,802, respectively,
and the related present value of the remaining obligations under the capital leases amounting
to $10,749,906 at June 30, 2021 are included in capital assets and long-term debt, respectively.
The County also leases land, office facilities and other equipment under noncancellable
operating leases expiring through August 2045. Expenditures for such operating leases were
$7,236,050 for the fiscal year ended June 30, 2021.
The future minimum payments under capital and operating leases at June 30, 2021 are as
follows:
Year Ending June 30:
2022
2023
2024
2025
2026
2027 - 2031
2032 - 2036
2037 - 2041
2042 - 2046
Total minimum lease payments
Less amount representing interest
Obligations under capital leases
Capital Operating
Leases Leases
$3,978,327
$ 1,760,004
3,444,133
1,080,821
2,263,410
799,477
1,045,038
346,217
345,970
26,556
--
47,638
--
900
--
900
--
750
11,076,878
4.063.263
(326,972)
M. 4 .• •1•
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
$26,906,000, 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, 2021, $22,755,000 was spent on closure and postclosure care
of the landfill. The remaining estimated liability of $4,151,000 is included in the government -
wide statement of net position. During the year ended June 30, 2021, $2,039,000 was spent
on closure of the landfill. The County is providing financial assurance for postclosure care
and remediation through self insurance as explained below.
- 73 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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 $16,600,000, based on what it
would cost to perform the required closure and postclosure care in 2021. Actual costs may be
higher due to inflation, changes in technology, or changes in regulations. Through
June 30, 2021, $9,099,000 was spent on closure and postclosure care of the landfill.
The remaining estimated liability of $7,501,000 is included in the government -wide statement
of net position. During the year ended June 30, 2021, $97,000 was spent on closure of the
landfill. The County is providing financial assurance for postclosure care and remediation
through self insurance as explained below.
Pu'uanahulu In May 1993, the County contracted with a private company to construct and
operate a new landfill on County land at Pu'uanahulu in West Hawaii. The present contract
calls for County employees to perform the daily operations of the landfill, and for the private
company to retain the overall management as well as perform all construction work on the
landfill cells. Under the 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 2021, 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 perforin 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 $18,720,000 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.
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
-74-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
1,000 to 8,000 gallons. The estimated liability of S1,775,000 for the cost to check for ground
contamination and potential cleanup is included in the County's financial statements.
10. LONGTERM 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, 2021:
Bonds
Issue
Bond Balance
Bond Balance
Due Within
Authorized
Amount
July 1, 2020
Issues
Retirements
June 30, 2021
One Ym
2007
Series C
$ 10,787,388
$ 2,344,659
$
($ 1,144,611)
$ 1,200,048
$ 1,200,048
2010
Series B
18,506,250
13,211,250
(13,211,250)
--
--
2013
Series A
58,509,892
2,051,312
(2,051,312)
--
--
2013
Series B
21,010,000
9,510,000
(2,235,000)
7,275,000
2,320,000
2013
Series C
18,470,000
10,175,000
(1,875,000)
8,300,000
1,955,000
2013
PI Series A
1,169,000
1,0567915
(24,300)
1,032,615
24,968
2016
Series A
99,620,000
99,620,000
(4,180,000)
95,440,000
4,395,000
2016
Series B
13,497,500
10,070,000
(1,240,000)
8,830,000
1,305,000
2016
Series C
44,835,000
37,565,000
(3,915,000)
33,650,000
47115,000
2016
Series D
28,860,000
26,580,000
(2,400,000)
24,180,000
2,520,000
2016
Series E
19,061,250
19,061,250
(1,545,000)
17,516,250
1,623,750
2017
Series A
90,000,000
84,495,000
(2,965,000)
81,530,000
3,120,000
2017
Series D
43,475,000
43,475,000
43,475,000
2,825,000
2020
PI Series A
2,437,000
--
2,437,000
2,437,000
--
2020
PI Series B
3,699,000
3,699,000
3,699,000
2020
Series A
59,815,000
59,815,000
59,815,000
--
2020
Series B
2,315,000
2,315,000
2,315,000
1,155,000
2020
Series C
10,215,000
10,215,000
10,215,000
922,500
2020
Series D
1,038,750
1,038,750
(1,038,750)
--
--
547,321,030
359,215,396
79,519,750
(37,825,223)
400,909,913
27,481,266
Add
unamortized
premium
103,094,002
53,223,162
17,745,254
(5,171.689)
65,796,727
5,706,566
$650 415,032 412,438.548 97.265.004 ($42.996.912) 466.706.640 $33 187,832
-75-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
General obligation bonds payable reported in the governmental activities section on the
government -wide statement of net position at June 30, 2021 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
$ 1,200,048
2013 Series B at 3.0% to 5.0%, due through 2023
7,275,000
2013 Series C at 4.0% to 5.0%, due through 2024
8,300,000
2013 PI Series A at 2.75%, due through 2048
1,032,615
2016 Series A at 3.0% to 5.0%, due through 2035
95,440,000
2016 Refunding Series B at 3.0% to 5.0%, due through 2026
8,830,000
2016 Refunding Series C at 5.0%, due through 2027
33,650,000
2016 Refunding Series D at 5.0%, due through 2028
24,180,000
2016 Refunding Series E at 2.0% to 5.0%, due through 2029
17,516,250
2017 Series A at 5.0%, due through 2037
81,530,000
2017 Refunding Series D at 3.0% to 5.0%, due through 2032
43,475,000
2020 PI Series A at 1.125%, due through 2055
2,437,000
2020 PI Series B at 1.125%, due through 2055
3,699,000
2020 Series A at 4.0% to 5.0%, due through 2040
59,815,000
2020 Series B at 0.4% to 0.55%, due through 2022
2,315,000
2020 Series C at 5.0%, due through 2029
10,215,000
Total general obligation bonds payable S400,909,913
Annual debt service requirements to maturity for the above general obligation bonds are as
follows:
Fiscal year ending June 30
2022
2023
2024
2025
2026
2027 — 2031
2032 — 2036
2037 — 2041
2042 — 2046
2047 — 2051
2052 — 2056
Governmental Activities
Principal
Interest
$ 27,481,266
$ 17,845,452
27,675,905
16,569,230
29,926,110
15,222,112
28,747,585
13,816,124
27,866,830
12,470,342
123,510,560
43,382,574
95,603,003
19,024,700
36,725,137
3,457,456
1,169,921
178,990
1,149,596
93,920
1.054.000
29.880
Total S400,909,913 S124,046,975
-76-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
Refunded Bonds
In periods prior to the year ended June 30, 2021, 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, 2021, approximately $45.4 million of bonds outstanding were considered defeased.
2020 Series C&D In fiscal year 2021, the County issued $11,253,750 in refunding bonds as
the 2020 Series C&D general obligation bond issue. The refunding bonds have a true interest
cost of .858962% and were issued to refund $13,211,250 of the total callable bonds
outstanding of the 2010 Series B general obligation bond issue.
The bonds refunded bore interest at a rate of 5.000%. The par amount of $11,253,750 plus a
premium of $2,159,684, minus $69,281 in underwriting fees, insurance and other issuance
costs resulted in net proceeds of $13,344,153.
The County's total debt service requirements will decrease by $1,757,792 as a result of the
refunding, and the net economic gain (difference between the present values on the old and
new debt) after taking into account all allocable costs of issuance of the bonds was
$1,492,418.
Bond Premiums
At June 30, 2021, total unamortized bond premiums were $65,796,727, 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, 2021,
$239.3 million was not yet issued.
Subsequent Events On July 21, 2021, the County Council authorized the issuance of
$25.5 million in general obligation bonds for the County to finance the capital
improvement projects as specified in the capital budget ordinance for the County for the
fiscal year ending June 30, 2022.
77 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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, 2021:
Issue
Balance
Note No.
Amount
July 1, 2020
Issues
Retirements
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
500,000
500,000
(500,000)
Series E, Note R-19
6,000,000
6,000,000
(6,000,000)
Series E, Note R-20
6,000,000
67000,000
(6,000,000)
Series E, Note R-21
6,000,000
6,000,000
(6,000,000)
Series E, Note R-22
6,000,000
6,000,000
(6,000,000)
Series E, Note R-23
4,000,000
4,000,000
(4,000,000)
Series E, Note R-24
500,000
500,000
(500,000)
Series E, Note R-25
500,000
500,000
(500,000)
Series E, Note R-26
500,000
500,000
(500,000)
Series E, Note R-27
500,000
500,000
(500,000)
$ 60,000,000
30 000 000
$ 30,000,000
($ G0.000.0001
State Revolving Fund Loans
Balance
June 30, 2021
The County has obtained loans to assist in financing mandated wastewater projects from the
State Water Pollution Control Revolving Fund (SRF). The purpose of this revolving fund is to
provide low -interest, long-term loans and other financial assistance to the four counties in the
state to finance construction of wastewater projects. The County has eleven projects approved
for funding with these loans.
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.
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
The schedule below shows the County's SRF transactions for the fiscal year ended June 30,
2021:
Loans
Approved
Loan Balance
Retirements /
Loan Balance
Due Within
Authorized
Amount
July 1, 2020
Additions
Forgiveness
June 30, 2021
One Year
Cesspool
Conversion
$ 8,363,773
$ 2,921,731
$
$ (443,418)
$ 2,478,313
$ 445,607
Honoka`aLCC
4,513,158
2,148,726
(181,988)
1,966,738
182,901
Queen
Lili`uokalani
9,421,732
5,043,311
(493,161)
4,550,150
495,634
Kalaniana`ole
7,847,045
4,786,949
(357,334)
4,429,615
359,127
Kealakehe
WWTPAU
21,162,934
13,262,176
(868,898)
12,393,278
871,007
North Kona
2,690,404
1,536,653
(80,046)
1,456,607
80,648
Kcalakchc
Effluent Reuse
8,677,918
1,748,130
(86,458)
1,661,672
87,325
SH Landfill
Closure
23,099,553
622,113
16,187,624
(422,478)
16,387,259
810,946
Kealakehe Scrap
Metal
8,000,973
5,297,923
--
(247,353)
5,050,570
249,832
93.777.490
S37,367,712
16187.624
$f3.181 1341
50374.202
3.583.027
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
2022
$ 3,583,027
$ 428,126
2023
3,604,747
398,336
2024
3,626,570
368,413
2025
3,648,727
338,126
2026
3,670,889
307,805
2027 — 2031
16,094,662
1,108,555
2032 — 2036
11,349,118
494,015
2037 — 2040
4,796,462
93,080
Total
S50,374,202
S1,536.456
-79-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
Other General Long -Term Obligations
The following is a summary of other general
long-term
obligations transactions for the fiscal
year ended June 30, 2021:
Balance
Balance
Due Within
July 1, 2020
Additions*
Pam
June 30, 2021
One Year
Governmental activities:
Compensated absences
$45,492,699
$14,923,647
$(11,992,851)
$48,423,495
$10,869,239
Claims and judgments
(see Note 12)
27,809,426
3,940,508
(7,492,116)
24,257,819
4,587,189
Capital leases
(see Note 8)
10,771,109
4,900,952
(4,922,155)
10,749,906
3,794,428
Landfill costs payable
(see Note 9)
13,355,000
1,083,167
(2,786,167)
11,652,000
1,840,695
Pollution remediation
(see Note 9)
19,341,349
(100,006)
(521,825)
18,719,518
1,259,518
Underground Storage
Tank (see Note 9)
1,775,000
--
--
1,775,000
--
Total
$118,54 -3 558
$24,748, 668
(27.715.1141
$115,577,737
S22,351,069
* 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, 2021 includes $38,659,427, which is
reserved for principal payments on general obligation bonds and $6,377,139, 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, Fanners 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.
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
In fiscal year 2021, the County made the final scheduled principal payment of the bond and
thus, the Project now owes the County for the remainder of the contributions.
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, 2021:
Balance at July 1, 2020
$119,273
Deductions
(18,582)
Balance at June 30, 2021
100,691
Less current portion
(41,335)
Loan payable, net of
current portion
The following is a summary of the annual maturities for the enterprise fund loan payable:
Business-tvne Activities
Fiscal year ending June 30:
Principal
2022
$ 41,335
2023
16,500
2024
16,500
2025
16,500
2026
9,856
Total 100 691
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 $742,183 at June 30, 2021.
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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
$1,032,615 at June 30, 2021.
The County has also issued general obligation bonds on behalf of Improvement District No. 20
for sewer 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 2055 and bear interest at the previous rates of 1.125%. Total general
obligation bonds payable included in the government -wide statement of net position were
$2,437,000 at June 30, 2021.
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, No. 19, Kona Ocean View Properties
Subdivision, and No. 20, Lono Kona Sewer Project for the fiscal year ended June 30, 2021:
Balance at July 1, 2020 $1,887,115
Additions 2,437,000
Deductions (112,317)
Balance at June 30, 2021 S4,Ll1.798
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
The following is a summary of the annual maturities for the improvement district general
obligation bonds:
Fiscal year ending June 30:
Principal
Interest
2022
$ 117,083
$ 87,882
2023
181,057
82,466
2024
187,251
76,489
2025
193,673
70,267
2026
199,334
63,795
2027 —
2031
704,743
239,524
2032 —
2036
509,004
187,776
2037 —
2041
552,137
142,891
2042 —
2046
601,921
93,230
2047 —
2051
547,595
41,066
2052 —
2056
418.000
11.823
Total 4 211 L097.209
11. COMMITMENTS AND CONTINGENCIES
Contractual commitments — Contractual commitments for capital projects, expenses, and
supplies at June 30, 2021, 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 $ 6,249,741
Capital projects fund 109,636,993
Nonmajor funds 13,290,200
129,176,934
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.
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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 wherein the County apprises plaintiff's counsel and the
court on its progress, highlighting achievements, noting procedural and permitting concerns
and delays, and constantly updating the status and completion projects for all remaining
projects. Currently, the projected completion date for all remaining projects is at the end of
calendar year 2022. 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, 20 have been completed, 1 (`Ahalanui) has
been permanently omitted due to lava inundation, 3 (Hilo Bayfront, Pana`ewa Zoo, Wong
Stadium) have been substantially completed and are pending contract closeout, 3
(Disappearing Sands, Miloli`i, Parks Maintenance) are in various stages of design, 1
(Kolekole) is in the bid preparation process, 3 (NAS, Richardson, Pahala Pool) have been
awarded for construction and are pending permitting issues, and 5 (Pa`auilo, Papa`aloa,
Kahuku, Nd`alehu, Pahala Park) are in active construction. The County has encumbered or
spent more than $19M on these remaining 35 projects to date. Further to this, the County was
in the process of securing a general obligation bond in the amount of $25M dedicated to the
completion of the 12 projects in the active construction or earlier phases of completion. The
County had spent $42.0 million for construction and design consultant costs to complete the
EA
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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 to assist County departments with addressing
requests concerning specialized access needs. 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 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 also purchases flood insurance on selected
structures, professional liability for emergency medical services, aviation liability for
helicopter operations, retired senior volunteers liability coverage, auto liability for both mass
transit buses and subsidized police vehicles, auto physical damage coverage for both police
fleet vehicles and the Kohala Ranch fire truck, and property insurance on specific housing
projects. Except for the County's property insurance, for which $10 million in lieu of $25
million limits were obtained due to hard insurance market conditions, there were no other
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 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, 2021, the amount
of this liability was $24,257,818. This is the County's best estimate based on available
information.
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
Changes in the reported liability since July 1, 2019 are given below.
Balance at July 1, 2019
Incurred claims (including IBNR)*
Claim payments
Balance at June 30, 2020
Incurred claims (including IBNR)*
Claim payments
Balance at June 30, 2021
General
Workers'
Total
Liability
Compensation
Liability
S 15,826,290
$ 15.658, 993
$ 31,484,483
736,144
3,664,117
4,400,261
(3,154,614)
(4,920,704)
(8,075,318)
13,407,820
14,401. 006
27.809.426
970,080
2,970,428
3,940,508
(3,118,369)
(4,373,747)
(7,492,116)
11,259,531
S 12,998. 887
24.2 77.818
*Net of new claims liability and existing claims resolved at less than previous estimate.
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 ERS's website: http://ers.ehawaii.gov/.
Benefits Provided - The ERS provides retirement, disability, and death benefits that are
covered by the provisions of the noncontributory, contributory, and hybrid retirement plans.
The three plans provide a monthly retirement allowance equal to the benefit multiplier
(generally 1.25% or 2%) multiplied by the average final compensation multiplied by years of
credited 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 lieu of
vacation.
For members hired before July 1, 2012, the original retirement allowance is increased by 2.5%
each July 1 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%
:•
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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
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
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 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 55.
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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 1 year of service. Ordinary death benefits consist of a lump sum payment of the
member's contributions and accrued interest plus a percentage of the salary earned in the
12 months preceding death, or 50% Joint and Survivor lifetime pension if the member
was not eligible for retirement at the time of death but was credited with at least 10 years
of service and designated one beneficiary, or 100% Joint and Survivor lifetime pension if
the member was eligible for retirement at the time of death and designated one
beneficiary.
Contributory Plan for Employees Hired After June 30, 2012
Retirement Benefits — General employees' retirement benefits are determined as 1.75%
of average final compensation multiplied by the years of credited service. General
employees with 10 years of credited service are eligible to retire at age 60.
Police and firefighters' retirement benefits are determined as 2.25% of average final
compensation for each year of service up to a maximum of 80%. Police and firefighters
with 10 years of credited service are eligible to retire at age 60.
Disability and Death Benefits - Members are eligible for service -related disability
benefits regardless of length of service and receive a lifetime pension of 50% of their
average final compensation plus refund of contributions and accrued interest. Ten years
of credited service is required for ordinary disability. Ordinary disability benefits are
1.75% of average final compensation for each year of service for police and firefighters
and are payable immediately, without an actuarial reduction, at a minimum of 30% of
average final compensation.
Death benefits for contributory plan members hired after June 30, 2012 are generally the
same as those for contributory plan members hired June 30, 2012 and prior.
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
Hybrid 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 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.
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
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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 2021 were 41.00% for police and firefighters and 24.0% for
all other employees. Contributions to the pension plan from the County for the year ended
June 30, 2021, 2020, and 2019 were $63,953,781, $52,778,035, and $44,853,953,
respectively.
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, 2021, the County reported a liability of
$696,251,655 for its proportionate share of the net pension liability. The net pension liability
was measured as of June 30, 2020, 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, 2020, the
County's proportion was 4.55%, which was a decrease of. 17% from its proportion measured
as of June 30, 2019.
For the year ended June 30, 2021, the County recognized pension expense of $105,931,229.
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
At June 30, 2021, the County reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources:
Differences between expected and actual experience
Net difference between projected and actual investment
earnings on pension plan investments
Changes in assumptions
Changes in proportion and differences between employer
contributions and proportionate share of contributions
County contributions subsequent to the measurement date
Total
Deferred
Outflows
of Resources
$ 27,810,166
27,423,906
18,907,047
6,322,283
Deferred
Inflows of
Resources
374,540
32,702,576
63,953,781 --
144.417.183 33.077.116
$63,953,781 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, 2022.
Other amounts reported as deferred outflows of resources and deferred inflows of resources
related to pensions will be recognized in pension expense as follows:
Net Deferred
Outflows
(Inflows)
Fiscal Year Ending June 30,
of Resources
2022
$ 23,462,251
2023
10,656,820
2024
9,008,939
2025
5,002,316
2026
(744,040)
S 47,386,286
Actuarial assumptions — The total pension liability in the June 30, 2020 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% 11.50%
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
Mortality rates used in the actuarial valuation as of June 30, 2020 were based on the
following:
Active members — Multiples of the Pub-2010 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, 2020 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.
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:
Long -Term
Long -Term
Strategic Allocation
Target
Expected Rate of
Expected Real
(Risk -Based Classes)
Allocation
Return*
Rate of Return
Broad growth
63.00%
7.90%
5.70%
Diversifying Strategies
37.00%
3.70%
1.50%
100.00%
* Uses an expected inflation rate of 2.20%.
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
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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
(6.00%) Rate (7.00%) (8.00%)
County's proportionate share of
the net pension liability S 905.105,687 S 696.251,655 S 524.071.250
Pension plan fiduciary netposition — Detailed information about the pension plan's fiduciary
net position is available in the separately issued ERS Annual Comprehensive Financial Report
(ACFR) that includes financial statements and required supplementary information.
Payables to the pension plan — At June 30, 2021, the annual amount payable to the ERS
totaled $8,392,597, which represents the employer contribution for the second half of the
month of June 2021, 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, 2021.
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 June 30, 2021, there were 18 inactive employees or beneficiaries
receiving benefits; 12 inactive employees not yet receiving benefit payments; and 4 active
members.
-93-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
Pension liabilities, pension expense, and deferred outflows of resources and deferred
inflows of resources related to pensions — At June 30, 2021, the County reported a liability of
$1,143,003. The total pension liability was measured as of June 30, 2021 based on an
actuarial valuation as of July 1, 2021.
For the year ended June 30, 2021, the County recognized pension payments of $44,799 and
pension expense of $161,781.
Actuarial assumptions — The total pension liability in the June 30, 2021 actuarial report was
determined using the following actuarial assumptions, applied to all periods included in the
measurement:
Inflation
Salary increases
2.50%
3.50%, including inflation
The discount rate used to measure the County's total pension liability was 1.92% based on the
daily municipal bond rate closest to but not later than the measurement date of the Fidelity
"20-Year Municipal GO AA Index".
The following presents the County's total pension liability calculated using the discount rate
of 1.92%, as well as what the County's total pension liability would be if it were calculated
using a discount rate that is 1-percentage-point lower (0.92%) or 1-percentage-point higher
(2.92%) than the current rate:
1% Decrease Current Discount 1% Increase
(0.92%) Rate (1.92%) (2.92%)
County's total pension liability 1.321.530 1,143,003 996 985
Schedule of Changes in Total Pension Liability
Measurement year ending June 30, 2021
Total Pension Liability
Service cost $ 145,450
Interest 28,152
Changes of assumptions (11,821)
Benefit payments (44,799)
Net Change in Total Pension Liability 116,982
Total Pension Liability — Beginning 1,026,021
Total Pension Liability — Ending 1.143.003
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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, 2020.
Inactive employees or beneficiaries currently receiving benefits 1,720
Inactive employees entitled but not yet receiving benefit payments 221
Active employees 2,483
4,424
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, 2021,
contributions to the OPEB Plan from the County totaled $38,191,347 which resulted in an
average contribution rate of approximately 19.3% of covered -employee payroll.
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 OPEB pre -funding in fiscal year 2021. This has been extended
to fiscal year 2022.
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-
-95-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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.
Net OPEB liability — The County's net OPEB liability was measured as of July 1, 2020, 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, 2020, and the reporting date, June 30, 2021, that are expected to have a significant effect on
the net OPEB liability.
Actuarial assumptions — The total OPEB liability in the July 1, 2020 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 7.50%; declining to a rate of 4.70% after
13 years
HMO
Initial rate of 7.50%; declining to a rate of 4.70% after
13 years
Part B & base monthly
Initial rates of 5.00%; declining to a rate of 4.70%
contribution
after 10 years
Dental
Initial rates of 5.00% for the first year; followed by
4.00%
Vision
Initial rates of 0.00% for the first year; followed by
2.50%
Life insurance
0.00%
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
Mortality rates used in the actuarial valuation as of July 1, 2020 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.
The actuarial assumptions used in the July 1, 2020 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).
A Single Discount Rate of 7.00% was used to measure the total OPEB liability. This Single
Discount Rate was based on the expected rate of return on OPEB plan investments of 7.00%.
Beginning with the FYE19 contribution, the funding policy of the County of Hawaii is to pay
the recommended actuarially determined contribution, which is based on layered, closed
amortization periods. In July 2020, the Governor's office issued the Tenth Proclamation
related to the Covid-19 Emergency, allowing employers of the EUTF to suspend ACT 268
contributions for fiscal year ending June 30, 2021 and instead limit their contribution amounts
to the OPEB benefits due. This temporary ACT 268 suspension would not derail the plan's
long term funding progress. Even if ACT 268 is suspended through fiscal year ending June
30, 2025, as is being discussed, the OPEB plan's fiduciary net position is expected to be
available to make all projected future benefit payments of current plan members. Therefore,
the long-term expected rate of return on OPEB plan investments was applied to all periods of
projected benefit payments to determine the total OPEB liability.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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
16.00%
7.72%
U.S. Equity
14.00%
6.23%
Private Equity
10.00%
9.66%
Core Real Estate
10.00%
5.98%
Trend Following
8.00%
2.12%
U.S. Microcap
6.00%
7.85%
Global Options
6.00%
4.65%
Private Credit
6.00%
5.50%
Long Treasuries
6,00%
0,86%
Reinsurance
5.00%
4.34%
Alternative Risk
Premium
5.00%
1.56%
TIPS
5.00%
0.11%
Core Bonds
3.00%
0.08%
100.00%
Changes in the Net OPEB Liability:
The following schedule presents the changes in the net OPEB liability for the fiscal year
ending June 30, 2021:
Balance at June 30, 2020
Changes for the fiscal year:
Service cost
Interest on the total OPEB liability
Employer contributions
Net investment income
Benefit payments
Administrative expense
Difference between expected
and actual experience
Changes of assumptions
Other
Increase (Decrease)
Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability
(a) (b) (a)-(b)
$ 594,650,754 $ 187,384,505 $ 407,266,249
13,182,551
41,412,243
(19,277,123)
(39,988,932)
(3,397,584)
Net changes $ (8,068,845)
Balance at June 30, 2021 S 586,581,909
41,604,474
3,806,539
(19,277,123)
(29,192)
127,017
$ 26,231,715
213,616,220
13,182,551
41,412,243
(41,604,474)
(3,806,539)
29,192
(39,988,932)
(3,397,584)
(127,017)
$ (34,300,560)
372,965,689
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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 1-
percentage-point higher (8.00%) than the current discount rate:
1% Decrease Current Discount 1% Increase
(6.00%) Rate (7.00%) (8.00%)
County's net OPEB liability 467,581,559 S 372,965,689 298,832.980
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 1-
percentage-point lower or 1-percentage-point higher than the current healthcare cost trend
rate:
Current
Healthcare Cost
1% Decrease Trend Rate 1% Increase
County's net OPEB liability S 295,721,785 S 372,965,689 S 473,157.785
For the year ended June 30, 2021, the County recognized OPEB expense of $38,674,214. At
June 30, 2021, the County reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources:
Difference between expected and actual experience
Changes of assumptions
Net difference between projected and actual earnings on
OPEB plan investments
County contributions subsequent to the measurement date
Total
Deferred Deferred
Outflows Inflows of
of Resources Resources
$ 6,547,467 $ 36,233,855
5,418,488
9,943,037
2,901,709
38,181,347 --
60.090339S 39.135,564
$38,181,347 reported as deferred outflows of resources related to the County's contributions
to the OPEB plan subsequent to the measurement date will be recognized as a reduction of the
net OPEB liability in the fiscal year ended June 30, 2022.
COUNTY OF HAWAII
Notes to the Basic Financial Statements
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:
Net deferred
inflows of
Fiscal Year Ending June 30,
resources
2022
$ 1,930,320
2023
1,395,172
2024
1,372,440
2025
2,238,346
2026
4,897,140
Thereafter
5.393.154
17,226.572
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.eut£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
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, 2021, the carrying amount of cash, time certificates of deposit and money market
funds of $38,007,854, with bank balances of $38,971,017 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, 2021.
- 100 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
At June 30, 2020, the Department had $20,000,000 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
The capital assets of the Department at June 30, 2021 were as follows:
Utility plant in service $538,770,419
Less: accumulated depreciation (292,046,560)
246,723,859
Preliminary survey and investigation charges 5,515,581
Construction work in progress 44,999,376
Land and rights 5,267,919
Net capital assets S302.506,735
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 $18,831,243 at June
30, 2021.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
General obligation bonds payable issued on behalf of the Department and other long-term debt
at June 30, 2021 are comprised of the following:
Public improvement bonds:
2008 Series A at 4.125%, due through 2043
$ 117,541
Public improvement refunding bonds:
2007 Series C at 4.0% to 5.0%, due through 2021
639,952
2016 Series B at 3.0% to 5.0%, due through 2026
8,830,000
2016 Series E at 2.0% to 5.0%, due through 2029
5,838,750
2020 Series C & D at 5.0%, due through 2029
3,405,000
Revolving fund loans:
State revolving fund loans, interest up to 1.37%,
due through 2040
46,997,951
Total long-term debt 65,829,194
Add: Unamortized premium 1,622,232
Total $67,451,426
At June 30, 2021, future principal and interest payments for long-term debt are scheduled as
follows:
Fiscal year ending June 30:
Principal
Interest
Total
2022
$ 6,214,530
$ 1,477,151
$ 7,691,681
2023
5,201,156
1,283,476
6,484,632
2024
5,353,082
1,115,741
6,468,823
2025
5,499,258
949,268
6,448,526
2026
5,642,158
791,196
6,433,354
2027 — 2031
20,820,768
2,139,524
22,960,292
2032 — 2036
12,308,094
765,700
13,073,794
2037 — 2041
4,774,737
126,594
4,901,331
2042 - 2046
15,411
958
16,369
Total
65.829.194
8.649.608
74.4 88.802
Contributions in Aid of Construction
The Department recognized $4,346,580 of contributions in aid of construction for the fiscal
year ended June 30, 2021.
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, 2021 for workers' compensation claims of $380,000
- 102 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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 $34,022,885 at
June 30, 2021.
Pension Plan
Pension liabilities, pension expense, and deferred outflows of resources and deferred
inflows of resources related to pensions — At June 30, 2021, the Department reported a
liability of $35,290,257 for its proportionate share of the net pension liability. The net pension
liability was measured as of June 30, 2020, 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.
At June 30, 2020, the Department's proportion was .23%, which is the same as its proportion
measured as of June 30, 2019.
For the year ended June 30, 2021, the Department recognized pension expense of $5,052,444.
At June 30, 2021, the Department reported deferred outflows of resources and deferred
inflows of resources related to pensions from the following sources:
Deferred
Deferred
Outflows
Inflows of
of Resources
Resources
Differences between expected and actual experience
$ 394,865
$
Net difference between projected and actual earnings
on pension plan investments
1,233,871
--
Changes in assumptions
993,272
--
Changes in proportion and differences between employer
contributions and proportionate share of contributions
2,287,341
1,774,106
Department contributions subsequent to the measurement date
2,579,631
--
Total
7.488.980
1.774.106
The $2,579,631 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, 2022.
- 103 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
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:
Net Deferred
Outflows of
Resources
Fiscal Year EndinLz_ June 30,
2022
$ 1,432,140
2023
837,447
2024
449,810
2025
384,809
2026
31.037
3.135.243
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
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
(6.00%) Rate (7.00%) (8.00%)
Department's proportionate
share of the net pension liability S 45,321,338 35,290,257 27,020. 779
Pension plan fiduciary netposition — Detailed information about the pension plan's fiduciary
net position is available in the separately issued ERS Annual Comprehensive Financial Report
(ACFR) that includes financial statements and required supplementary information.
Payables to the pension plan — At June 30, 2021, the annual amount payable to the ERS
totaled $321,571, which represents the employer contribution for the month of June 2021 and
an accrual for excess pension costs attributed to the fiscal year, as required by HRS.
- 104 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
Post -Retirement Benefits Other than Pensions (OPEB)
Net OPEB liability, OPEB expense, and deferred outflows of resources and deferred inflows
of resources related to OPEB — At June 30, 2021, the Department reported a net OPEB
liability of $14,393,814. The net OPEB liability was measured as of July 1, 2020, 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, 2021, the Department recognized OPEB
expense of $1,571,788.
At June 30, 2021, the Department reported deferred outflows of resources and deferred
inflows of resources related to pensions from the following sources:
Deferred
Deferred
Outflows
Inflows of
of Resources
Resources
Difference between expected and actual experience
$ --
$ 2,910,951
Changes of assumptions
332,234
162,341
Net difference between projected and actual earnings on OPEB
plan investments
1,041,066
--
Employer contributions subsequent to the measurement date
1,210,523
--
Total
$ 2,583,823
$ 3,073,292
$1,210,523 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, 2022.
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,
2022
2023
2024
2025
2026
Thereafter
Net Deferred
Inflows of
Resources
$ 290,667
230,950
228,519
281,885
403,738
264,233
1.699992
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
Changes in the Net OPEB Liability:
The following schedule presents the changes in the net OPEB liability for the fiscal year
ending June 30, 2021:
Balance at June 30, 2020
Changes for the fiscal year:
Service cost
Interest on the total OPEB liability
Employer contributions
Net investment income
Benefit payments
Administrative expense
Difference between expected
and actual experience
Changes of assumptions
Other
Net changes
Balance at June 30, 2021
Increase (Decrease)
Total OPEB
Plan Fiduciary
Net OPEB
Liability
Net Position
Liability
(a)
(b)
(a)-(b)
$ 35,611,034
$ 19,531,287
$ 16,079,747
773,607
--
773,607
2,483,573
--
21483,573
--
1,977,000
(1,977,000)
--
376,721
(376,721)
(1,036,438)
(1,036,438)
--
--
(3,013)
3,013
(2,403,784)
--
(2,403,748)
(190,921)
--
(190,921)
--
(2,264)
2,264
$(373,927)
$ 1,312,006
(1,685,933)
35,237,107
20,843,293
14,393,814
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 1-percentage-point lower (6.00%) or
1-percentage-point higher (8.00%) than the current discount rate:
1% Decrease
Current Discount
1% Increase
(6.00%)
Rate (7.00%)
(8.00%)
Department's net OPEB liability S 19.857.974
S 14393.814
S 10.046.035
- 106 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2021
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 1-percentage-point higher than the current healthcare cost trend
rate:
Current
Healthcare Cost
1 % Decrease Trend Rate 1 % Increase
Department's net OPEB liability 9.809.296 14393,814 20,268.633
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.eut£hawaii.gov or by contacting them at P.O. Box 2121, Honolulu, HI 96805-2121.
Prior Period Adjustment
The financial statements for the fiscal year ended June 30, 2020 contained an error related to
construction work in progress and preliminary survey and investigation charges that should
have been placed in service and classified as utility plant in service as of June 30, 2018.
Therefore, an adjustment was made to increase utility plant in service by $13,163,292,
decrease construction work in progress by $11,672,265, and decrease preliminary survey and
investigation charges by $1,491,027 for the fiscal year ended June 30, 2020. The effect for the
fiscal year ended June 30, 2020 was an increase in depreciation expense of $494,914 and a
decrease in beginning net position of $742,370 in relation to depreciation expense for the
fiscal years ended June 30, 2019 and 2018.
- 107 -
COUNTY OF HAWAII
Required Supplementary Information
June 30, 2021
Schedule of Changes in the Net OPEB Liability and Related Ratios
Last 10 Fiscal Years*
2021
County
Department
Total OPEB Liability
Service Cost
$ 13,182,551
$ 773,607
Interest on the total OPEB liability
41,412,243
2,483,573
Benefit payments
(19,277,123)
(1,036,438)
Difference between expected and actual
experience
(39,988,932)
(2,403,748)
Change in assumptions
(3,397,584)
(190,921)
Net change in total OPEB liability
(8,068,845)
(373,927)
Total OPEB liability - Beginning
594,650,754
35,611,034
Total OPEB liability - Ending
$ 586,581,909
$ 35,237,107
Plan fiduciary net position
Contributions - employer
$ 41,604,474
$1,977,000
Net investment income
3,806,539
376,721
Benefit payments
(19,277,123)
(1,036,438)
Administrative expense
(29,192)
(3,013)
Other
127,017
(2,264)
Net change in plan fiduciary net position
26,231,715
1,312,006
Plan fiduciary net position - Beginning
187384,505
19,531,287
Plan fiduciary net position - Ending
$ 213,616,220
$ 20,843,293
Net OPEB liability
Plan fiduciary net position as a percentage of
the total OPEB liability
Covered -employee payroll
Net OPEB liability as a percentage of
Covered -employee payroll
- 108 -
$ 372,965,689 $ 14,393,814
36.4% 59.2%
$ 189,053,873 $ 10,266,331
197.4% 140.2%
COUNTY OF HAWAII
Required Supplementary Information
June 30, 2021
2020
County
Department
Total OPEB Liability
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
Plan fiduciary net position as a percentage of
the total OPEB liability
Covered -employee payroll
Net OPEB liability as a percentage of
Covered -employee payroll
- 109 -
$ 407,266,249 $ 16,079,747
31.5% 54.9%
$ 185,575,775 $ 10,264,425
219.5% 156.7%
COUNTY OF HAWAII
Required Supplementary Information
June 30, 2021
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
517,774,914
32,509,555
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
Plan fiduciary net position as a percentage of
the total OPEB liability
Covered -employee payroll
Net OPEB liability as a percentage of
Covered -employee payroll
- 110 -
$ 400,834,810 $ 16,431,746
27.3% 51.3%
$ 178,889,344 $ 10,212,595
224.1 % 160.9%
COUNTY OF HAWAII
Required Supplementary Information
June 30, 2021
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
(17,054,987)
(953,288)
Net change in total OPEB liability
28,748,922
1,869,616
Total OPEB liability - Beginning
489,025,992
30,639,939
Total OPEB liability - Ending
$ 517,774,914
$ 32,509,555
Plan fiduciary net position
Contributions - employer
$ 28,549,987
$1,867,788
Net investment income
10,380,705
1,245,946
Benefit payments
(17,054,987)
(953,288)
Administrative expense
(23,228)
(2,782)
Other
266,457
16,370
Net change in plan fiduciary net position
22,118,934
2,174,034
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
Covered -employee payroll
Net OPEB liability as a percentage of
Covered -employee payroll
24.4% 46.9%
$ 172,678,405 $ 9,791,132
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
COUNTY OF HAWAII
Required Supplementary Information
June 30, 2021
Schedule of Contributions (OPEB) Last 10 Fiscal Years
County:
Fiscal Year
Ended
Actuarially
Determined
Contribution
Contributions
in Relation to
the Actuarially
Determined
Contribution
Contribution
Deficiency
Excess
Covered-
Employee
Payroll
Contributions
as a %age
of Covered -
Employee
Payroll
June 30, 2021
$ 42,917,000
$ 38,181,347
$ 4,735,653
$ 197,978,022
19.3%
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
$ 159,744,324
14.2%
June 30, 2015
$ 32,478,000
$ 18,657,000
$ 13,821,000
$ 152,490,296
12.2%
June 30, 2014
$ 30,526,000
$ 17,453,000
$ 13,073,000
$ 139,423,481
12.5%
June 30, 2013
$ 29,494,000
$ 13,892,000
$ 15,602,000
$ 130,803,306
10.6%
June 30, 2012
$ 36,193,000
$ 13,730,000
$ 22,463,000
$ 124,452,126
11.0%
Department:
Fiscal Year
Ended
Actuarially
Determined
Contribution
Contributions
in Relation to
the Actuarially
Determined
Contribution
Contribution
Deficiency
Excess
Covered-
Employee
Payroll
Contributions
as a %age
of Covered -
Employee
Payroll
June 30, 2021
$ 2,046,000
$ 1,210,523
$ 835,477
$11,587,764
10.5%
June 30, 2020
$ 1,977,000
$ 1,977,000
$ --
$10,266,331
19.3%
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%
June 30, 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%
See accompanying notes to required supplementary information
- 112 -
COUNTY OF HAWAII
Required Supplementary Information
June 30, 2021
Note — Significant Methods and Assumptions
Beginning July 1, 2017, an actuarial valuation of the County's and Department's liability
associated with other postemployment benefits other than pension provided through the EUTF is
performed as of July 1 of each year.
The following summarizes the significant methods and assumptions used to determine the
actuarially determined contribution for the fiscal year ended June 30, 2021:
Actuarial valuation date July 1, 2020
Actuarial cost method Entry Age Normal
Amortization method Level percent, closed
Equivalent single amortization period 18.3 and 16.9 for the County and Department,
respectively
Asset valuation method 4-year smoothed market
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%
- 113 -
COUNTY OF HAWAII
Required Supplementary Information
June 30, 2021
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 OPEB liability and related ratios or the schedule of contributions
(OPEB).
- 114 -
COUNTY OF HAWAII
Required Supplementary Information
June 30, 2021
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, 2020
4.5%
$696,251,655
$180,285,326
386.2%
53.2%
June 30, 2019
4.7%
$668,213,164
$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
$129,153,763
292.0%
58.0%
Department:
Proportionate
Share of the Plan
Department's
Department's
Net Pension
Fiduciary Net
Proportion of
Proportionate
Liability as a
Position as a
the Net
Share of the
Department's
%age of
%age of the
Measurement
Pension
Net Pension
Covered
Covered
Total Pension
Period Ended
Liability (%)
Liability ($)
Payroll
Payroll
Liability
June 30, 2020
0.2%
$ 35,290,257
$10,439,473
338.0%
53.2%
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
- 115 -
COUNTY OF HAWAII
Required Supplementary Information
June 30, 2021
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
by the Plan
(Excess)
Covered Payroll
Payroll
June 30, 2021
$
63,953,781
$
63,953,781
$ --
$
186,778,076
34.2%
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%
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 Payroll
Payroll
June 30, 2021
$
2,579,631
$
2,579,631
$ --
$
11,016,038
23.4%
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%
See accompanying notes to required supplementary information
- 116 -
COUNTY OF HAWAII
Required Supplementary Information
June 30, 2021
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, 2020.
There were no material changes in the actuarial assumptions used in calculating the amounts
reported in the schedule of the proportionate share of the net pension liability as of the
measurement period ended June 30, 2020 (fiscal year ended June 30, 2021).
- 117 -
COUNTY OF HAWAII
Required Supplementary Information
June 30, 2021
Measurem
June 30,
Schedule of Changes in Total Pension Liability (Bandsmen Pension)
Last Ten Fiscal Years*
ent year ending 2021 2020 2019 2018
Total Pension Liability
Service Cost
Interest on the Total
Pension Liability
Differences between
expected and actual
experience
Assumption Changes
Benefit Payments
Net Change in Total
Pension Liability
Total Pension Liability —
Beginning
Total Pension Liability —
Ending
Covered Payroll
Total Pension Liability as
a Percentage of Covered
Employee Payroll
$ 145,450 $ 7,577 $ 7,392
28,152 29,250 38,149
(70,480) --
58,659 87,065
(44,799) (49,612)
116,982 74,280
(89,947) --
(44,293) --
(47,532) (58,808)
(136,231) (58,808)
1,026,021
951,741
1,087,972
1,146,780
$1,143,003
1 026 021
951 741
$ 1,087,972
$ 24,076
$ 26,349
$ 26,349
$ 49,505
4,747.5%
3,894.0%
3,612.1%
2,197.7%
- 118 -
COUNTY OF HAWAII
Required Supplementary Information
June 30, 2021
Measurement year ending 2017
June 30,
Total Pension Liability
Service Cost
$ 16,416
Interest on the Total
Pension Liability
36,289
Differences between
expected and actual
experience
--
Assumption Changes
(113,807)
Benefit Payments
(53,347)
Net Change in Total
Pension Liability
(114,449)
Total Pension Liability
Beginning
1,261,229
Total Pension Liability —
Ending
$ 1,146,780
Covered Payroll
$ 49,505
Total Pension Liability as
a Percentage of Covered
Employee Payroll
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
- 119 -
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- 120 -
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
HIGHWAYFUND - 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.
CEMETERYFUND - Used to accumulate moneys to guarantee the future maintenance of County cemetery
sites. Financing is provided from the sale of burial lots in County cemeteries.
PARKING METER FUND - Used to account for the costs of maintaining County on -street and off-street
parking areas. Financing is provided by the proceeds from parking meters.
VEHICLE DISPOSAL FUND - Used to accumulate moneys for the towing, removal, disposal and recycling
of abandoned or discarded automobiles and automobile parts. Financing is provided by annual fees
collected with motor vehicle registrations.
BIKEWAYFUND - Used to accumulate moneys for the construction of bikeways within the County.
Financing is provided by bicycle license fees.
WORKFORCE INVESTMENT ACT FUND - Used to account for employment and training services
provided to economically disadvantaged adults, dislocated workers and youth. Financing is provided by
federal grants.
GOLF COURSE FUND - Used to account for the cost of operating the Hilo Municipal Golf Course.
Funding is provided from green fees and payments from restaurant and pro shop concessionaires.
GEOTHERMAL RELOCATION AND COMMUNITY BENEFITS FUND - Used to account for the County's
share of geothermal resource royalties received from the operator of a geothermal power plant located in
the County. The funds are earmarked for a geothermal relocation program and to benefit the lower Puna
area.
BEAUTIFICATION FUND - Used to accumulate moneys for the beautification of highways and disposal of
abandoned vehicles within the County. Financing is provided by assessments on vehicle registrations.
HAWAII COUNTYHOUSING AGENCY- Used to account for Federal and County moneys used to provide
public housing assistance within the County.
PARK DEDICATIONFUND - Used to account for moneys deposited with the County by subdividers to
provide land for parks and playgrounds in subdivisions.
GENERAL EXCISE TAX FUND — Used to account for moneys collected from the general excise tax
surcharge.
SHORT-TERM VACATIONRENTAL ENFORCEMENT FUND — Used to account for cost of enforcing
County's short-term vacation rental enforcement laws. Financing is provided by all fees and fines collected
in connection with the law.
DEBT SERVICE FUND
INTEREST FUND - Used to accumulate moneys for payment of interest on general obligation bonds.
Moneys required to service interest maturities are transferred annually from the General Fund.
BOND REDEMPTIONFUND - 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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- 121 -
COUNTY OF HAWAII
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2021
Special Revenue Funds
Solid
Parking Vehicle
Highway
Sewer
Waste
Cemetery
Meter Disposal
Fund
Fund
Fund
Fund
Fund Fund
Assets
Cash and cash equivalents
$ 26,452,284
$ 11,026,547
$
7,664,265
$ 112,341
$ 327,167 $ 11,304,735
Investments
-
-
-
-
- -
Imprest fund
-
400
250
-
- -
Receivables:
Due from other governments
3,507,586
245,448
280,707
-
- -
Due from other governmental funds
818,949
1,602,841
85,134
-
- 822
Due from other nongovernmental funds
-
4,400
-
-
- -
Trade, net of allowance for doubtful accounts
-
2,081,739
996,919
-
- -
Other
-
-
-
-
- -
4,326,434
3,934,428
1,362,760
-
- 822
Total assets
$ 30,778,718
$ 14,961,375
$
9,027,275
$ 112,341
$ 327,167 $ 11,305,557
Liabilities, Deferred Inflows and Fund Balances
Liabilities:
Accounts payable
$ 712,288
$ 438,208
$
3,455,694
$ -
$ - $ 127,645
Accrued payroll
787,301
240,169
528,416
-
- 7,298
Due to other governmental funds
716,035
568,436
883,453
-
- 58,562
Advance Collections -Intergovernmental
124,254
-
11,998
-
- -
Other
40
133,110
438
-
- -
Total liabilities
2,339,918
1,379,923
4,879,999
-
- 193,505
Deferred Inflows of Resources
Unavailable Revenue
-
2,081,739
996,919
-
- -
Fund balances:
Restricted for:
Debt service
-
-
-
-
- -
Highways, streets and abandoned vehicles
28,438,800
-
-
-
- -
Housing and rental assistance
-
-
-
-
- -
Lower Puna area
-
-
-
-
- -
Committed to:
Sanitation
-
11,499,713
3,150,357
-
- -
Highways, streets and abandoned vehicles
-
-
-
-
327,167 11,112,052
Rental assistance and subsidy
-
-
-
-
- -
Cemetery
-
-
-
112,341
- -
Golf Course
-
-
-
-
- -
Lower Puna area
-
-
-
-
- -
Parks and recreational projects
-
-
-
-
- -
Total fund balances
28,438,800
11,499,713
3,150,357
112,341
327,167 11,112,052
Total liabilities, deferred inflows
and fund balances
$ 30,778,718
$ 14,961,375
$
9,027,275
$ 112,341
$ 327,167 $ 11,305,557
- 122 -
Special Revenue Funds
Workforce
Golf
GeothemulReloc.
Beauti-
Hawaii County
hark
General
Bikeway
Innovation&
Course
&conununity
fication
Housing
Dedication
Excise
Fund
opporr. Act Fund
Fund
Benefits Fund
Fund
Agency
Fund
Tax Fund
$ 729,530
$ -
$ 202,730
$ 4,290,074
$ 410,600
$ 14,906,973
$ 48,551
$17,909,492
-
-
-
-
-
-
12,468
-
-
-
2,000
-
-
800
-
-
-
145,780
-
-
-
45,756
-
20,310,055
-
-
7,800
-
-
123,068
-
49,209
-
-
-
-
-
4,683
-
-
-
38,993
646
53,973
-
143,486
93
-
-
184,773
8,446
53,973
-
316,993
93
20,359,264
$ 729,530
$ 184,773
$ 213,176
$ 4,344,047
$ 410,600
$ 15,224,766
$ 61,112
$38,268,756
$ 724 $ - $ 3,476 $ - $ 1,645 $ 183,790 $ - $ 296,982
- - 64,349 - - 191,778 - 65,094
3,000 184,773 - - 119,202 62,000 - 4,042
- - - - - 11,281,094 - -
- - - - 25 435,366 - 85
3,724 184,773 67,825 - 120,872 12,154,028 - 366,203
- - - - - 370,392 - -
725,806 - - - 289,728 - - 37,902,553
- - - - - 1,699,586 - -
- - - - - 1,000,760 - -
- - 145,351 - - - - -
- - - 4,344,047 - - - -
- - - - - - 61,112 -
725,806 - 145,351 4,344,047 289,728 2,700,346 61,112 37,902,553
$ 729,530 $ 184,773 $ 213,176 $ 4,344,047 $ 410,600 $ 15,224,766 $ 61,112 $38,268,756
(Continued)
-123-
COUNTY OF HAWAII
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2021
(Concluded)
Debt Service Fund Total
Short-term
Vacation Rental Geothermal Interest
Enforcement Fund Asset Fund Fund
Bond Nonmajor
Redemption Governmental
Fund Funds
Assets
Cash and cash equivalents
$ 1,596,086 $1,878,092 $ 2,490,338
$ 8,950,691
$110,300,496
Investments
- 389,280 3,950,000
29,500,000
33,851,748
Imprest fund
- - -
-
3,450
Receivables:
Due from other governments
- - -
-
24,535,332
Due from other governmental funds
- - -
-
2,687,722
Due from other nongovernmental funds
- - -
393,736
402,819
Trade, net of allowance for doubtful accounts
- - -
-
3,078,658
Other
- 2,898 -
-
240,089
- 2,898 -
393,736
30,944,620
Total assets
$ 1,596,086 $2,270,270 $ 6,440,338
$38,844,427
$175,100,314
Liabilities, Deferred Inflows and Fund Balances
Liabilities:
Accounts payable
$ - $ - $ -
$ -
$ 5,220,452
Accrued payroll
17,125 - -
-
1,901,530
Due to other governmental funds
- - -
-
2,599,503
Advance Collections -Intergovernmental
- - -
-
11,417,346
Other
- - 63,199
185,000
817,263
Total liabilities
17,125 - 63,199
185,000
21,956,094
Deferred Inflows of Resources
Unavailable Revenue
- - -
-
3,449,050
Fund balances:
Restricted for:
Debt service
- - 6,377,139
39,659,427
45,036,566
Highways, streets and abandoned vehicles
- - -
-
67,356,887
Housing and rental assistance
1,578,961 - -
-
3,278,547
Lower Puna area
- 2,270,270 -
-
2,270,270
Committed to:
Sanitation
- - -
-
14,650,070
Highways, streets and abandoned vehicles
- - -
-
11,439,219
Rental assistance and subsidy
- - -
-
1,000,760
Cemetery
- - -
-
112,341
Golf Course
- - -
-
145,351
Lower Puna area
- - -
-
4,344,047
Parks and recreational projects
- - -
-
61,112
Total fund balances
1,578,961 2,270,270 6,377,139
38,659,427
149,695,170
Total liabilities, deferred inflows
and fund balances
$ 1,596,086 $2,270,270 $ 6,440,338
$38,844,427
$175,100,314
See accompanying independent auditors' report.
- 124 -
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- 125 -
COUNTY OF HAWAII
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Fiscal Year Ended June 30, 2021
Special Revenue Funds
Solid
Parking
Vehicle
Highway
Sewer
Waste
Cemetery
Meter
Disposal
Fund
Fund
Fund
Fund
Fund
Fund
Revenues
Fuel taxes
$ 18,763,374
$ -
$ -
$ -
$ -
$ -
Public utility franchise taxes
8,259,374
-
-
-
-
-
Licenses and permits
12,528,699
-
-
-
-
2,437,247
General excise tax surcharge
-
-
-
-
-
-
Intergovernmental
1,564,301
1,508,150
574,769
-
-
-
Charges for services
426,686
11,241,810
11,065,267
-
12,517
5,315
Investment earnings (loss)
-
-
-
-
-
-
Other
470,432
7,642
50,299
5,750
-
3,580
Total revenues
42,012,866
12,757,602
11,690,335
5,750
12,517
2,446,142
Expenditures
Current:
General Government
2,054,453
-
-
-
-
-
Public safety
10,146,098
-
-
-
-
-
Highways and streets
11,227,230
-
-
-
-
-
Health, education and welfare
-
-
-
55,318
-
-
Culture and recreation
-
-
-
-
-
-
Sanitation
-
12,048,939
31,388,848
-
-
1,737,354
Pension and retirement contributions
4,330,562
1,243,667
2,401,245
-
-
35,402
Employees' health insurance
1,577,003
368,136
920,684
-
-
10,506
Other
812,786
184,163
391,783
-
-
-
Debt service:
Principal
680,592
258,669
1,348,701
-
-
-
Interest
38,857
25,171
96,079
-
-
-
Total expenditures
30,867,581
14,128,745
36,547,340
55,318
-
1,783,262
Excess (deficiency) of revenues
over (under) expenditures
11,145,285
(1,371,143)
(24,857,005)
49,568
12,517
662,880
Other Financing Sources (Uses)
Transfers in
-
1,876,419
17,954,686
-
-
-
Increases in capital leases
73,667
353,496
407,184
-
-
-
Transfers out
(3,100,015)
-
-
-
-
(302,194)
Total other financing sources (uses)
(3,026,348)
2,229,915
18,361,870
-
-
(302,194)
Net change in fund balances
8,118,937
858,772
(6,495,135)
(49,568)
12,517
360,686
Fund balances, beginning of year,
as previously stated
20,319,863
10,640,941
9,645,492
161,909
314,650
10,751,366
Prior period adjustment
-
-
-
-
-
-
Fund balance, beginning of year,
as restated
20,319,963
10,640,941
9,645,492
161,909
314,650
10,751,366
Fund balances at end of year
$ 28,439,800
$ 11,499,713
$ 3,150,357
$ 112,341
$ 327,167
$ 11,112,052
-126-
Special Revenue Funds
Workforce
Golf
GeotheinalReloc.
Beauti-
Hawaii County Park
General
Bikeway
Innovations
Course
&Community
fication
Housing Dedication
Excise
Fund
ounort. Act Fund
Fund
Benefits Fond
Fund
Agency Fund
Tax Fund
$ -
$ -
$ -
$ - $
80,970
-
-
-
203,155
- -
-
-
-
-
-
-
- -
50,287,510
-
933,272
-
-
-
30,224,371 -
-
-
-
863,337
-
-
- -
-
-
-
-
-
-
2,870 44
-
-
-
-
69,812
-
574,739 -
43
80,970
933,272
863,337
69,812
203,155
30,801,980 44
50,287,553
15,325
- -
-
182,902
-
-
10,000,575
-
933,272 -
-
-
31,378,610
-
-
-
- 1,087,028
-
115,122
-
-
-
-
- 290,818
-
-
972,772
-
331,196
-
- 126,583
-
-
383,519
-
103,144
-
- -
-
-
28,991
-
16,321
-
- 38,583
-
-
8,081
-
-
-
- 3,635
-
-
145
-
-
15,325
933,272 1,546,647
-
298,024
32,772,118
-
10,451,236
65,645
- (683,310)
69,812
(94,869)
(1,970,138)
44
39,836,317
-
- 711,228
-
-
1,750,205
-
-
-
- -
-
-
-
-
(17,468,912)
-
- 711,228
-
-
1,750,205
-
(17,468,912)
65,645
- 27,918
69,812
(94,869)
(219,933)
44
22,367,405
660,161
- 117,433
4,274,235
384,597
2,920,279
61,068
15,535,148
660,161
- 117,433
4,274,235
384,597
2,920,279
61,068
15,535,148
$ 725,806
$ - $ 145,351
$ 4,344,047
$ 289,728
$ 2,700,346 $
61,112
$37,902,553
(Continued)
-127-
COUNTY OF HAWAII
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Fiscal Year Ended June 30, 2021
(Concluded)
Debt Service Fund
Total
Short-term
Bond
Nonmajor
Vacation Rental
Geothermal
Interest
Redemption
Governmental
Enforcement Fund
Asset Fund
Fund
Fund
Funds
Revenues
Fuel taxes
$ -
$ -
$ -
$ -
$ 18,763,374
Public utility franchise taxes
-
-
-
-
8,259,374
Licenses and permits
355,317
-
-
-
15,605,388
General excise tax surcharge
-
-
-
-
50,287,510
Intergovernmental
-
-
160,792
-
34,965,655
Charges for services
-
-
-
-
23,614,932
Investment earnings (loss)
-
1,400
2,189
-
6,503
Other
2,372
50,000
-
-
1,234,669
Total revenues
357,689
51,400
162,981
-
152,737,405
Expenditures
Current:
General Government
377,237
-
-
-
2,431,690
Public safety
-
-
-
-
10,146,098
Highways and streets
-
-
-
-
21,426,032
Health, education and welfare
-
-
-
-
32,367,200
Culture and recreation
-
-
-
-
1,202,150
Sanitation
-
-
-
-
45,175,141
Pension and retirement contributions
98,732
-
-
-
9,704,394
Employees' health insurance
37,892
-
-
-
3,527,467
Other
-
-
-
-
1,434,044
Debt service:
Principal
-
-
-
27,682,790
30,017,416
Interest
-
-
17,958,346
-
18,122,233
Total expenditures
513,861
-
17,958,346
27,682,790
175,553,865
Excess (deficiency) of revenues
over (under) expenditures
(156,172)
51,400
(17,795,365)
(27,682,790)
(22,816,460)
Other Financing Sources (Uses)
Transfers in
-
-
19,041,161
32,627,003
73,960,702
Increases in capital leases
-
-
-
-
834,347
Transfers out
-
-
-
-
(20,871,121)
Total other financing sources (uses)
-
-
19,041,161
32,627,003
53,923,928
Net change in fund balances
(156,172)
51,400
1,245,796
4,944,213
31,107,468
Fund balances, beginning of year,
as previously stated
1,735,133
-
5,131,343
33,715,214
116,368,832
Prior period adjustment
-
2,218,870
-
-
2,218,870
Fund balance, beginning of year,
as restated
1,735,133
2,218,870
5,131,343
33,715,214
118,587,702
Fund balances at end of year
$ 1,578,961
$2,270,270
$ 6,377,139
$ 38,659,427
$ 149,695,170
See accompanying independent auditors' report
- 128 -
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, 2021
Actual
Variance
Original
Final
(Budgetary
Positive
Budget
Budget
Basis)
(Negative)
Revenues:
Taxes:
Fuel taxes
$ 16,981,610
$ 16,981,610
$ 18,763,374
$ 1,781,764
Public utility franchise taxes
7,900,000
7,900,000
8,259,374
359,374
Total taxes
24,881,610
24,881,610
27,022,748
2,141,138
Licenses and permits - motor vehicle weight taxes
12,000,000
12,000,000
12,528,699
528,699
Intergovernmental
725,000
725,000
1,539,301
814,301
Charges for services
400,000
400,000
794,745
394,745
Other
490,000
490,000
470,432
(19,568)
Total revenues
38,496,610
38,496,610
42,355,925
3,859,315
Expenditures:
General government- engineering
3,045,162
3,432,162
3,051,794
380,368
Public safety - police traffic enforcement
1,982,411
1,982,411
1,600,901
381,510
Public safety - protective inspection
740,700
353,700
340,188
13,512
Public safety - traffic engineering
10,036,931
10,036,931
8,079,691
1,957,240
Highways and streets
16,506,613
16,506,613
11,165,333
5,341,280
Highways and streets - mass transit
-
-
(51,083)
51,083
Pension and retirement contributions
4,300,000
4,400,000
4,317,552
82,448
Employees' health insurance
1,500,000
1,600,000
1,573,642
26,358
Other
2,201,000
2,001,000
824,371
1,176,629
Total expenditures
40,312,817
40,312,817
30,902,389
9,410,428
Excess (deficiency) of revenues over (under)
expenditures
(1,816,207)
(1,816,207)
11,453,536
13,269,743
Other financing sources (uses) - transfers in (out) -
Transfers out - Capital Projects Fund
(3,000,000)
(3,000,000)
(3,000,000)
-
Excess (deficiency) of revenues and other sources
over (under) expenditures and other uses
(4,816,207)
(4,816,207)
8,453,536
13,269,743
Fund balance at beginning of year
20,319,863
20,319,863
20,319,863
-
Fund balance at end of year
$ 15,503,656
$ 15,503,656
$ 28,773,399
$ 13,269,743
See accompanying independent auditors' report
- 129 -
COUNTY OF HAWA11
Sewer Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2021
Revenues:
Intergovernmental
Charges for services - sewer fees
Other
Total revenues
Expenditures:
Sanitation
Pension and retirement contributions
Employees' health insurance
Other
Total expenditures
Excess (deficiency) of revenues over (under)
expenditures
Other financing sources:
Transfers in - General Fund
Excess (deficiency) of revenues and other
sources over (under) expenditures
Fund balance at beginning of year
Fund balance at end of year
See accompanying independent auditors' report.
Actual
Variance
Original
Final
(Budgetary
Positive
Budget
Budget
Basis)
(Negative)
$ -
S -
$ 1,508,150
$ 1,508,150
11,944,600
11,944,600
11,241,810
(702,790)
-
-
7,642
7,642
11,944,600
11,944,600
12,757,602
813,002
13,369,959
13,369,959
10,662,180
2,707,779
1,276,300
1,276,300
1,236,054
40,246
534,878
531,878
367,389
164,489
771,905
774,905
24,695
750,210
15,953,042
15,953,042
12,290,318
3,662,724
(4,008,442)
(4,008,442)
467,284
4,475,726
1,876,419 1,876,419 1,876,419
(2,132,023) (2,132,023) 2,343,703
10,640,941 10,640,941 10,640,941
4,475,726
$ 8,508,918 $ 8,508,918 $ 12,984,644 $ 4,475,726
- 130 -
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, 2021
Revenues:
Intergovernmental
Charges for services - tipping fees
Other
Total revenues
Expenditures:
Sanitation
Pension and retirement contributions
Employees' health insurance
Other
Total expenditures
Deficiency of revenues under expenditures
Other financing sources:
Transfers in - General Fund
Deficiency of revenues and other
sources under expenditures
Fund balance at beginning of year
Fund balance at end of year
See accompanying independent auditor' report
Actual
Variance
Original
Final
(Budgetary
Positive
Budget
Budget
Basis)
(Negative)
$ 874,137
$ 874,137
$ 681,702
$ (192,435)
12,447,924
12,447,924
11,065,267
(1,382,657)
93,600
93,600
50,299
(43,301)
13,415,661
13,415,661
11,797,268
(1,618,393)
32,967,464
33,174,122
32,277,978
896,144
2,346,000
2,416,000
2,390,179
25,821
854,400
924,400
918,520
5,880
847,658
501,000
361,089
139,911
37,015,522
37,015,522
35,947,766
1,067,756
(23,599,861)
(23,599,861)
(24,150,498)
(550,637)
17,954,687 17,954,687 17,954,687 -
(5,645,174) (5,645,174) (6,195,811) (550,637)
9,645,492 9,645,492 9,645,492 -
$ 4,000,318 $ 4,000,318 $ 3,449,681 $ (550,637)
- 131 -
COUNTY OF HAWA11
Cemetery Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2021
Revenues - other - sale of cemetery plots
Expenditures - health, education and welfare
Deficiency of revenues raider expenditures
Fund balance at beginning of year
Fund balance at end of year
See accompanying independent auditors' report.
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
$ 10,000 $ 10,000 $ 5,750 $ (4,250)
(108,000) (108,000) (90,068) 17,932
161,909 161,909 161,909 -
$ 53,909 $ 53,909 $ 71,841 $ 17,932
- 132 -
COUNTY OF HAWA11
Parking Meter Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2021
Revenues - Charges for services - highways and streets
Excess of revenues over expenditures
Fund balance at beginning of year
Fund balance at end of year
See accompanying independent auditors' report.
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
12,517 $ 12,517
- - 12,517 12,517
314,650 314,650 314,650 -
$ 314,650 $ 314,650 $ 327,167 $ 12,517
-133-
COUNTY OF HAWAH
Vehicle Disposal Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2021
Revenues:
Licenses and permits - vehicle disposal fee
Charges for services - towing charges
Miscellaneous
Total revenues
Expenditures:
Sanitation
Pension and retirement contributions
Employees' health insurance
Other
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Other financing sources (uses) - transfers in (out) -
Transfers out - Serial Bond Redemption Fund
Transfers out - Interest Fund
Excess (deficiency) of revenues and other sources
over (under) expenditures and other uses
Fund balance at beginning of year
Fund balance at end of year
See accompanying independent auditors' report.
Actual
Variance
Original
Final
(Budgetary
Positive
Budget
Budget
Basis)
(Negative)
$ 2,300,000
$ 2,300,000
$ 2,437,247
$ 137,247
3,100
3,100
5,315
2,215
22,600
22,600
3,580
(19,020)
2,325,700
2,325,700
2,446,142
120,442
3,139,610
3,152,810
1,884,292
1,268,518
41,000
41,000
34,827
6,173
25,000
25,000
10,478
14,522
15,200
2,000
-
2,000
3,220,810
3,220,810
1,929,597
1,291,213
(895,110)
(895,110)
516,545
1,411,655
(490,000)
(490,000)
(249,832)
240,168
(95,000)
(95,000)
(52,362)
42,638
(1,480,110)
(1,480,110)
214,351
1,694,461
10,751,366
10,751,366
10,751,366
-
$ 9,271,256
$ 9,271,256
$ 10,965,717
$ 1,694,461
- 134 -
COUNTY OF HAWAH
Bikeway Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2021
Revenues - licenses and permits - bicycle tax
Expenditures - highways and streets
Deficiency of revenues under expenditures
Fund balance at beginning of year
Fund balance at end of year
See accompanying independent auditors' report.
Actual
Variance
Original
Final
(Budgetary
Positive
Budget
Budget
Basis)
(Negative)
$ 46,000
$ 46,000
$ 80,970
$ 34,970
199,000
199,000
198,842
158
(153,000)
(153,000)
(117,872)
35,128
660,161
660,161
660,161
-
$507,161
$507,161
$542,289
$35,128
-135-
COUNTY OF HAWAH
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, 2021
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues - intergovernmental $ - $ 685,390 $ 685,390 $ -
Expenditures - health, education and welfare - 685,390 685,390 -
Excess of revenues over expenditures - - - -
Fund balance at beginning of year - - - -
Fund balance at end of year $ - $ - $ - $ -
See accompanying independent auditors' report.
- 136 -
COUNTY OF HAWA11
Golf Course Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2021
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
Charges for services $ 852,277 $ 852,277 $ 863,337 $ 11,060
Expenditures:
Culture and recreation
11116,968
1,154,566
1,123,369
31,197
Pension and retirement contributions
289,537
289,537
288,031
1,506
Employees' health insurance
137,000
137,000
126,234
10,766
Other
44,776
7,178
-
7,178
Total expenditures
1,588,281
1,588,281
1,537,634
50,647
Deficiency of revenues under expenditures
(736,004)
(736,004)
(674,297)
61,707
Other financing sources:
Transfers in - General Fund
711,228
711,228
711,228
-
Excess (deficiency) of revenues and other sources
over (under) expenditures
(24,776)
(24,776)
36,931
61,707
Fund balance at beginning of year
117,433
117,433
117,433
-
Fund balance at end of year
$ 92,657
$ 92,657
$ 154,364 $
61,707
See accompanying independent auditors' report
- 137 -
COUNTY OF HAWAH
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, 2021
Actual
Variance
Original
Final
(Budgetary
Positive
Budget
Budget
Basis)
(Negative)
Revenues
Miscellaneous:
Geothermal royalties
$ 600,000
$ 600,000
$ 69,812
$ (530,188)
Expenditures:
General government:
Planning and zoning
1,000,000
1,000,000
-
1,000,000
Excess (deficiency) of revenues over
(tinder) expenditures
(400,000)
(400,000)
69,812
469,812
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
$ 4,344,047
$ 469,812
See accompanying independent auditors' report.
- 138 -
COUNTY OF HAWAH
Beautification Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2021
Actual
Variance
Original
Final
(Budgetary
Positive
Budget
Budget
Basis)
(Negative)
Revenues - licenses and permits - highway
beautification
$ 200,000
$ 200,000
S 203,155
$ 3,155
Expenditures:
Highways and streets
221,200
221,200
212,947
8,253
Culture and recreation
133,630
133,630
115,122
18,508
Total expenditures
354,830
354,830
328,069
26,761
Deficiency of revenues under expenditures
(154,830)
(154,830)
(124,914)
29,916
Fund balance at beginning of year
384,597
384,597
384,597
-
Fund balance at end of year
$ 229,767
$ 229,767
$ 259,683
$ 29,916
See accompanying independent auditors' report.
- 139 -
COUNTY OF HAWAII
Hawaii County Housing Agency
Schedule of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
Revenues:
Intergovernmental -
Federal - HUD - Voucher program
Investment earnings
Resale of property
Other
Total revenues
Expenditures:
Health, education and welfare
Pension and retirement contributions
Employees' health insurance
Total expenditures
Deficiency of revenues under expenditures
Other financing sources - transfers in -
Transfers in - General Fund
For the Fiscal Year Ended June 30, 2021
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
$ 23,332,310
$ 67,918,192
$ 65,844,675
$ (2,073,517)
1,620
1,620
2,870
1,250
-
-
46,492
46,492
507,578
657,578
528,247
(129,331)
23,841,508
68,577,390
66,422,284
(2,155,106)
24,922,002
69,598,884
66,631,552
2,967,332
946,504
1,011,504
969,184
42,320
419,104
419,104
382,346
36,758
26,287,610
71,029,492
67,983,082
3,046,410
(2,446,102)
(2,452,102)
(1,560,798)
891,304
2,288,410
2,294,410
1,750,205 (544,205)
Excess (deficiency) of revenues and other sources
over (under) expenditures (157,692) (157,692) 189,407 347,099
Fund balance at beginning of year 2,920,279 2,920,279 2,920,279 -
Fund balance at end of year $ 2,762,587 $ 2,762,587 $ 3,109,686 $ 347,099
See accompanying independent auditors report
- 140 -
COUNTY OF HAWAll
Park Dedication Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2021
Actual
Variance
Original
Final
(Budgetary
Positive
Budget
Budget
Basis)
(Negative)
Revenues - investment earnings
$ -
$ -
$ 312
$ 312
Excess of revenues over expenditures
-
-
312
312
Fund balance at beginning of year
61,068
61,068
61,068
-
Fund balance at end of year
$ 61,068
$ 61,068
$ 61,380
$ 312
See accompanying independent auditors' report
- 141 -
Revenues:
GET surcharge
Other
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, 2021
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
$ 37,500,000 $ 37,500,000 $ 50,287,510 $ 12,787,510
A Al
Total revenues
37,500,000
37,500,000
50,287,553
12,787,553
Expenditures:
Highways and streets - mass transit
18,911,907
18,928,014
11,313,126
7,614,888
Pension and retirement contributions
325,000
340,000
328,853
11,147
Employees' health insurance
145,861
145,861
102,154
43,707
Other
93,088
61,981
16,295
45,686
Total expenditures
19,475,856
19,475,856
11,760,428
7,715,428
Excess of revenues over expenditures
18,024,144
18,024,144
38,527,125
20,502,938
Other financing sources (uses) - transfers in (out) -
Transfers out - Capital Projects Fund
(9,368,912)
(9,368,912)
(9,368,912)
-
Transfers out- Serial Bond Redemption Fund
(7,800,000)
(7,800,000)
(6,000,000)
1,800,000
Transfers out- Interest Fund
(4,100,000)
(4,100,000)
(2,100,000)
2,000,000
Excess (deficiency) of revenues and other sources
over (under) expenditures and other uses
(3,244,768)
(3,244,768)
21,058,213
24,302,938
Fund balance at beginning of year
15,535,148
15,535,148
15,535,148
-
Fund balance at end of year
$ 12,290,380
$ 12,290,380
$ 36,593,361
$ 24,302,938
See accompanying independent auditors report
- 142 -
COUNTY OF HAWAH
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, 2021
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
Licenses - ST vacation rental fees
$ 527,000
S 527,000
S 355,317
S (171,683)
Fines and forfeitures
92,400
92,400
2,372.00
(90,028)
Total revenues
619,400
619,400
357,689
(261,711)
Expenditures:
General government:
ST vacation rental enforcement
434,000
454,806
325,438
129,368
Pension and retirement contributions
97,900
99,300
97,791
1,509
Employees' health insurance
71,500
70,100
37,814
32,286
Other
31,600
10,794
-
10,794
Total expenditures
635,000
635,000
461,043
173,957
Deficiency of revenues under expenditures
(15,600)
(15,600)
(103,354)
(87,754)
Fund balance at beginning of year
1,735,133
1,735,133
1,735,133
-
Fund balance at end of year
$ 1,719,533
S 1,719,533
$ 1,631,779
S (87,754)
See accompanying independent auditors' report
-143-
COUNTY OF HAWAII
Geothermal Asset Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2021
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
Licenses - geothennal assessment
$ 50,000
S 50,000
S 50,000
S -
Investment earnings
-
-
9,766
9,766
Total revenues
50,000
50,000
59,766
9,766
Expenditures:
General government
50,000
50,000
50,000
-
Total expenditures
50,000
50,000
50,000
-
Excess of revenues over expenditures
-
-
9,766
9,766
Fund balance at beginning of year, as restated
2,218,870
2,218,870
2,218,870
-
Fund balance at end of year
S 2,218,870
S 2,218,870
S 2,228,636
S 9,766
See accompanying independent auditors' report.
- 144 -
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- 145 -
COUNTY OF HAWAll
Custodial Funds
Combining Statement of Custodial Funds Net Position
June 30, 2021
Performance
State
Improvement
Improvement
Improvement
Improvement
and
Weight
District
District
District
District
Refundable
Tax
No.18
No.19
No.20
Revolving
Deposits
Fund
Fund
Fund
Fund
Fund
Fund
Assets
Cash and cash equivalents $ 1,990,568 S 488,836 S 631,217 S 397,712 S 149,199 $ 185,354
Investments - - - - 34,479 -
Due from other agency funds - - - - - -
Other receivables - 8,633 5,537 2,854 232,657 -
Total assets $1,990,568 $ 497,469 $ 636,754 $ 400,566 $ 416,335 $ 185,354
Liabilities
Accrued liabilities $1,990,568 $ 1,054 $ 1,387 $ 1,913 $ - $ 6,000
Advances payable - 13,460 405 1,946 - -
Total liabilities $1,990,568 $ 14,514 $ 1,792 $ 3,859 $ - $ 6,000
Net Position
Held in trust for others $ - $ 482,955 $ 634,962 $ 396,707 $ 416,335 $ 179,354
Total net position $ - $ 482,955 $ 634,962 $ 396,707 $ 416,335 $ 179,354
See accompanying independent auditors' report
- 146 -
Non -Profit
Organ and
Business
Flexible Lapsed License
Tissue
Improvement
Spending Warrants Plates
Education
District
Account Fund Fund
Fund
1 - Kailua Total
$ 412,407 $ 388,797 $ 66,785 $ 19,401 $ 901 $ 4,731,177
- - - - - 34,479
- 9,298 - - - 9,298
- 18,741 - - 7,593 276,015
$ 412,407 $ 416,836 $ 66,785 $ 19,401 $ 8,494 $ 5,050,969
66,785 $ 19,401 $ 8,494 $ 2,095,602
- - - - - 15,811
$ 66,785 $ 19,401 $ 8,494 $ 2,111,413
$ 412,407 $ 416,836 $ - $ - $ - $ 2,939,556
$ 412,407 $ 416,836 $ - $ - $ - $ 2,939,556
- 147 -
COUNTY OF HAWAII
Custodial Funds
Combining Statement of Changes in Custodial Fund Net Position
For the Fiscal Year Ended June 30, 2021
Improvement
Improvement
Improvement
State Weight
District
District
District
Tax Fund
No. 18 Fund
No. 19 Fund
No. 20 Fund
Additions
Tax collections for state
$ 25,298,012
$ -
$ -
$ -
Special assessment collections
-
108,406
50,403
133,848
Return of assessments
-
-
-
-
Developer deposit
-
-
-
-
Employee collections
-
-
-
-
Lapsed checks
-
-
-
-
Collections fi•om vehicle registrations and licenses
-
-
-
-
Investment earnings
-
41
-
54
Total additions
25,298,012
108,447
50,403
133,902
Deductions
Payment of taxes to state
24,204,915
-
-
-
Payments state, not for profits and
improvement district
-
-
-
-
Contributions to debt repayment
-
124,622
55,163
11,492
Administrative charges
1,093,097
1,054
1,387
1,913
Community facility district expenses
-
-
-
-
Reissuance of checks
-
-
-
-
Reimbursements to employees
-
-
-
-
Other
-
328
82
82
Total deductions
25,298,012
126,004
56,632
13,487
Change in net position
-
(17,557)
(6,229)
120,415
Net position, beginning of year,
as previously stated
-
-
-
-
Prior period adjustment
-
500,512
641,191
276,292
Net position, beginning of year,
as restated
-
500,512
641,191
276,292
Net position at end of year
$ -
$ 482,955
$ 634,962
$ 396,707
-148-
Performance
Improvement
and
Non -Profit
Organ and
Business
District
Refundable
Flexible
Lapsed
License
Tissue
Improvement
Total
Revolving
Deposits
Spending
Warrants
Plates
Education
District
Custodial
Fund
Fund
Account
Fund
Fund
Fund
1 - Kailua
Funds
$ -
$ -
$ -
$ -
$ -
$ 25,298,012
-
-
-
-
-
-
882,767
1,175,424
232,400
-
-
-
-
-
-
232,400
-
143,371
-
-
-
-
-
143,371
-
-
395,534
-
-
-
-
395,534
-
-
-
28,183
-
-
-
28,183
-
34,000
67,135
22,563
-
123,698
24,204,915
-
-
-
- 49,845
18,068 879,881 947,794
-
-
-
- -
- - 191,277
-
-
-
- 17,290
4,495 2,886 1,122,122
-
130,917
-
- -
- - 130,917
-
-
-
29,867 -
- - 29,867
-
-
363,829
- -
- - 363,829
-
8,282
-
- -
- - 8,774
-
139,199
363,829
29,867 67,135
22,563 882,767 26,999,495
232,522
38,172
31,705
(1,684) -
- - 397,344
418,520 -
- - 2,542,212
183,813
141,182
380,702
183,813
141,182
380,702
419,520 -
- - 2,542,212
$ 416,335
$ 179,354
$ 412,407
$ 416,836 $ -
$ - $ - $ 2,939,556
-149-
COUNTY OF HAWAII
Private Purpose Trusts
Combining Statement of Private Purpose Trust Net Position
June 30, 2021
Shippers'
Total
Wharf
Private
Trust
Purpose
Assets
Fund
Trusts
Cash and cash equivalents
$ 748,413
$ 748,413
Investments
2,071,199
2,071,199
Total assets
$ 2,819,612
$ 2,819,612
Net Position
Held in trust for other parties $ 2,819,612 $ 2,819,612
Total net position $ 2,819,612 $ 2,819,612
See accompanying independent auditors' report.
- 150 -
COUNTY OF HAWAII
Private Purpose Trusts
Combining Statement of Changes in Private Purpose Trust Net Position
For the Fiscal Year Ended June 30, 2021
Shippers'
Total
Wharf
Private
Trust
Purpose
Fund
Trusts
Additions
Investment earnings:
Net increase in fair value of investments $ 255,394
$ 255,394
Dividends
37,956
37,956
Interest
221
221
Total additions
293,571
293,571
Deductions
Grant payments
16,809
16,809
Investment Fees
15,822
15,822
Total deductions
32,631
32,631
Change in net position
260,940
260,940
Net position, beginning of year
2,558,672
2,558,672
Net position, end of year
$ 2,819,612
$ 2,819,612
See accompanying independent auditors' report.
- 151 -
This page intentionally left blank.
- 152 -
STATISTICAL SECTION
(UNAUDITED)
Contents
Page
Financial Trends — These schedules contain trend information to help the read understand how the
County's financial performance and well-being have changed over time. 153
Revenue Capacity — These schedules contain information to help the reader assess the County's
most significant local revenue source, the property tax. 158
Debt Capacity — These schedules present information to help the reader assess the affordability of
the County's current levels of outstanding debt and the County's ability to issue additional debt in
the future. 164
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. 167
Operating Information — These schedules contain service and infrastructure data to help the reader
understand how the information in the County's financial repost relates to the services provided
and the activities performed by the County. 169
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Table 4
COUNTY OF HAWAI'I
Changes in Fund Balances, Governmental Funds
(Modified
accrual basis
of accounting)
Last Ten Fiscal Years
(Amounts in
thousands)
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Revenues:
Property tax
$ 208,231
$ 201,201
$ 223,492
$ 236,190
$ 249,054
$ 266,517
$ 301,699
$ 313,631
$ 327,886
$ 355,161
Public service company tax
9,897
10,766
10,380
10,386
9,801
8,423
7,612
8,494
8,862
8,167
Fuel tax
8,293
6,353
7,373
7,633
7,934
8,289
13,342
17,343
20,108
18,763
Public utility franchise tax
11,065
11,087
10,793
10,824
9,004
7,951
8,331
9,442
9,365
8,259
Licenses and permits
15,790
15,991
197618
22,046
22,432
22,932
24,066
24,653
25,155
24,890
General excise tax surcharge
-
-
-
-
-
-
-
12,518
35,538
50,288
Intergovernmental
100,867
79,912
75,257
86,272
85,173
79,220
90,025
101,627
113,632
187,650
Charges for services
16,885
17,055
19,392
20,357
21,672
21,708
23,553
27,516
30,080
24,846
Investment earnings (loss)
406
(618)
1,704
716
614
632
1,592
4,148
3,481
557
Settlement contributions
-
12,500
-
-
-
-
-
-
-
-
Other
4,201
4399
30,084
9,769
16,132
11.791
4,832
4,643
4,174
3,424
Total Revenues
375,635
358,646
398,093
404,193
421,816
4277463
475,052
524,015
578,281
681,995
Expenditures:
Current:
General government
35,088
33,360
36,679
40,805
40,488
40,819
41,571
41,800
47,383
47,059
Public safety
104,523
106,885
111,221
122,819
127,451
136.163
137,718
145,094
154.921
232,212
Highways and streets
17,338
17,923
20,270
20,984
22,479
20.329
21,401
27,448
27,962
25,692
Sanitation
29,511
30,672
29,949
31,464
34,015
38,671
39,352
43,815
43,759
45,282
Health, education and welfare
23,749
24,199
23,070
24,540
25,380
30,535
29,876
31,109
30,943
41,391
Culture and recreation
16,763
16,337
18,334
20,056
21,561
21,196
21,324
22,022
22,533
22,883
Pension and retirement contributions
27,773
29,916
33,032
38,485
41,359
43,718
49,494
53,137
6t,813
70,662
Employees' health insurance
25,902
26,011
26,786
27,731
30,112
32,147
33,802
17,522
18,846
20,107
Other postemployment benefits
-
-
3,170
4,532
7,180
11,495
14,831
39,637
41,604
38,191
Other
4,183
2,991
3,238
4,686
3,931
3,839
4,622
4,314
8,742
9,165
Debt service:
Principal
24,834
25,718
19,013
22,004
22,432
22,032
86,906
30,577
29,222
32,605
Interest
15,032
14,345
14,644
13,871
12,974
17,289
17,739
19,223
18,590
18,241
Capital outlay
71,220
48,565
51,369
79.398
144,288
111,109
41,924
51.897
79,536
72,439
Total Expenditures
395,916
376,822
390,775
451,375
533,650
529,342
540,560
527,595
585,853
675,929
Revenues over (under) Expenditures
(20,281)
(18,176)
7,308
(47,182)
(111,834)
(101,879)
(65,508)
(3,580)
(7,572)
6,066
Other Financing Sources (Uses):
Sale of assets
153
1
10
25
66
21
23
47
10
33
Capital leases
2,521
1,307
14
1,971
3,389
3,769
3,809
6,777
2,822
4,901
State Revolving Fund loans
4,569
4.991
3,072
-
7,317
9.130
5.154
7,439
174
t6,187
Sale of bonds
-
50,480
-
130,136
-
107,116
-
-
38,106
Issuance of bond anticipation notes (BANS)
-
-
-
-
-
59,800
-
-
-
-
Refunding bonds
47,510
106,254
-
48,784
11,254
Premium on bonds
17,570
23,174
5,998
17,745
Refunding bondsBANs issuance costs
-
-
-
-
(508)
-
(276)
-
-
(333)
Payment to refunded bond escrow agent
-
(45,352)
-
-
(128,920)
-
(54,537)
-
-
(13,344)
Retirement of refunded debt
-
(9,635)
-
-
-
-
-
-
-
-
Reclassofdebtfromcurrenttolong-term
-
-
-
-
-
-
-
-
30,279
-
Transfers in
59,971
51,356
6L238
59,394
57,412
66.864
75,711
77,240
90,199
86,482
Transfers out
(59,971)
(51,356)
(61,238)
(59,394)
(57,412)
(66,M4)
(75,711)
(77,240)
(90,199)
(86,482)
Total other financing sources
7,243
66,872
3.096
1,996
140,908
71,720
116,071
14,263
33,285
74,549
Net change in fund balances
$ (13,038)
$ 48,696
$ 10,404
$ (45,186)
$ 29,074
$ (30,159)
$ 50,563
$ 10,683
$ 25,713
$ 80,615
Debt service as a percentage of
noncapital expenditures
12.3 %
13.9 %
10.0 %
9.3 %
9.1 %
9.4 %
20.9 %
10.5 %
9.1 %
8.3
Unaudited - see accompanying independent auditors' report.
Amount for fiscal year 2014 has been changed for consistency.
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Taxpaye
Business
Kohanaiki Shores LLC
Developer
Hilton Resorts Corp.
Timeshare
Mauna Kea/Hapuna Beach Corps.
Developer/Hotel
Hualalai Investors LLC
Developer/Hotel
Hilton Land Investment 1 LLC
Hotel
DHL Mahi Opco LLC
Developer/Hotel
MAPS Orchid Hotel LLC
Hotel
Raptor Residence LLC
Residential
SMG I Hotel Waikoloa LLC
Hotel
Hotel/Condo/
Kona Coast Resort Ltd.
Timeshare
Mauna Kea Development Corp
Hotels/Dev.
Orchid 09 LLC
Hotel
WB KD Acquisition LLC
Developer
Mauna Lani Resort Inc.
Developer/Hotel
BRE/Waikoloa LLC
Hotel
COUNTY OF HAWAII
Principal Taxpayers
June 30, 2021 and 2012
Fiscal Year 2021
Percentage
2020
of Total
Assessed
Assessed
Valuation
Rank
Valuation
$ 297,444,700
1
0.8%
280,126,800
2
0.8%
176,732,700
3
0.5%
168,209,000
4
0.5%
151,667,000
5
0.4%
136,109,500
6
0.4%
127,282,600
7
0.4%
72,966,200
8
0.2%
71,891,600
9
0.2%
Table 6
Fiscal Year 2012
Percentage
2011
of Total
Assessed
Assessed
Valuation
Rank
Valuation
$ 65,347,000
8
0.2%
88,977,200
7
0.3%
189,089,800
3
0.6%
206,052,400
2
0.7%
66,802,400 10 0.2% 57,409,200 9
217,554,100 1
116,619,400 4
106,003,500 5
89,006,000 6
55,610,900 10
$1,549,232,500 4.4% $ 1,191,669,500
Note: Gross valuation at January 1, 2020: $ 35,242,547,841
Gross valuation at January 1, 2011: $29,720,043,200
Source: County of Hawaii, Department of Finance, Real Property Tax Division
Unaudited - see accompanying independent auditors' report.
0.2%
0.7%
0.4%
0.4%
0.3 %
0.2%
4.0%
- 162 -
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Table 9
COUNTY OF HAWAI`I
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)
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%
2,047
2021
416,225,798
1.2%
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 11 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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Table 11
COUNTY OF HAWAI'I
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 1
of dollars)
Income
Enrollment
Rate
2011
487,229
$
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
S
34,870
29,985
6.5%
2015
196,428
$
7,067,347
$
35,979
29,865
5.2%
2016
198,449
$
7,618,924
S
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
202,165
$
8,602,392
$
42,551
29,609
4.2%
2020
203,340
$
9,410,824
$
46,281
29,217
13.8%
* 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.
- 167 -
Table 12
Employer
State of Hawaii
Kamehameha Schools, Hawaii Island
County of Hawaii
United States Government
Mauna Kea Beach Hotel
Four Seasons Resort Hualalai
KTA Super Stores
Hilton Waikoloa Village
The Fairmont Orchid, Hawaii
Waikoloa Beach Marriott Resort & Spa
Wal-Mart
Mauna Lani Resort (Operations), Inc.
Total
COUNTY OF HAWAI`I
Principal Employers, County of Hawaii
June 30, 2021 and 2012
2021
2012
Percentage
Percentage
of Total County
of Total County
Employees
Rank
Employment
Employees
Rank
Employment
16,700
1
26.0%
7,962
1
10.1%
3,380
2
5.3%
2,800
3
4.4%
2,630
2
3.3%
1,300
4
2.0%
1,429
3
1.8%
1,100
5
1.7%
513
9
0.6%
1,003
6
1.6%
650
7
0.8%
900
7
1.4%
750
5
0.9%
850
8
1.3%
935
4
1.2%
560
9
0.9%
616
8
0.8%
259
10
0.4%
741
450
28,852 45.0% 16,676
6 0.9%
10 0.6%
21.0%
Total employee count 64,210 78,950
Source: County of Hawaii, Department of Research and Development
State of Hawaii, Hawaii Workforce Infonet: https://www.hiwi.org/vosnet/gsipub/documentview.aspx?
United State Department of Labor, Bureau of Labor Statistics: https://www.bls.gov/regions/west/news-release/countyemploymentandwages_hawaii.htm
Pacific Business News, "Employers, Big Island" Issue date: 10/16/2021
- 168 -
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