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Home My WebLink About2007 CAFR Part 4 COUNTY OF HAWAII Notes to the Basic Financial Statements June 30,2007 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. 10. LONG-TERM DEBT General Obligation Bonds The County issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. These bonds have been issued by the County for the primary government,component unit activities(see Note 14)and an improvement district. The following is a summary of general obligation bond transactions reported in the government-wide statement of net assets for the County for the fiscal year ended June 30, 2007: Bonds Issue Bond Balance Bond Balance Due within Authorize Amoun t June 30,2006 Issues Retirements June 30.2007 one ve ar 1993 Ref&PI $86,770,000 $35,565,000 S — $ 4,295,000 $31,270,000 $ 4,530,000 1999 Series A 30,000,000 25,160,000 — 22,170,000 2,990,000 1,455,000 1999 Refunding 18,940,000 2,710,000 — 2,710,000 — 2001 Series A 23,000,000 13,871,739 — 11,223,913 2,647,826 622,826 2003 Series A 36,310,000 36,310,000 — 1,440,000 34,870,000 1,470,000 2004 Series A 30,000,000 30,000,000 — — 30,000,000 1,130,000 2004 Ref Series B 19,545,000 19,545,000 — 1,600,000 17,945,000 1,665,000 2004 Ref Series C 5,050,140 4,602,776 — 456,588 4,146,188 465,812 2004 PI Series A 2,776,400 2,776,400 — 34,317 2,742,083 35,947 2004 PI Series B 920,000 920,000 12,246 907,754 12,782 2004 PI Series C 191,093 191,093 — 35,993 155,100 37,073 2006 Series A 25,000,000 25,000,000 — — 25,000,000 757,500 2007 Series A 85,000,000 85,000,000 — 85,000,000 — 2007 Series B 20,820,000 — 20,820,000 — 20,820,000 - 2007 Series C 10.787388 10,787.388 10,787,388 395,110,021 196,652,008 116,607,388 43,978,057 269,281,339 12,181,940 Add unamortized premium 5,420,154 3,296,826 1,789,402 226,272 4,859,956 271,008 Less deferred amount on refunding (2.828.759) (1,099,902) (1,534,757) (206,138) (2,428,521) (248,722) s39Z701.416 $198.848.932 $116.862.033 s43,998.191 5271.712,774 -64 - COUNTY OF HAWAII Notes to the Basic Financial Statements June 30,2007 General obligation bonds payable reported on the government-wide statement of net assets at June 30,2007 are comprised of the following individual issues: Public improvement and/or refunding bonds: 1993 Refunding&PI at 5.5%to 5.6%,due through 2013 $ 31,270,000 1999 Series A at 5.75%to 6.0%,due through 2009 2,990,000 2001 Series A at 4.0%to 4.5%,due through 2010 2,647,826 2003 Series A at 2.0%to 5.125%,due through 2023 34,870,000 2004 Series A at 3.0%to 5.25%,due through 2024 30,000,000 2004 Refunding Series B at 3.5%to 5.0%,due through 2015 17,945,000 2004 Refunding Series C at 2.5%to 3.7%,due through 2014 4,146,188 2004 PI Series A at 4.75%,due through 2039 2,742,083 2004 PI Series B at 4.375%,due through 2039 907,754 2004 PI Series C at 3.0%,due through 2010 155,100 2006 Series A at 4.0%to 5.0%,due through 2026 25,000,000 2007 Series A at 4.0%to 5.0%,due through 2027 85,000,000 2007 Series B at 3.75%to 5.0%,due through 2018 20,820,000 2007 Series C at 4.0%to 5.0%,due through 2021 10,787,388 Total general obligation bonds payable $269.281.339 Annual debt service requirements to maturity for the above general obligation bonds are as follows: Governmental Activities Fiscal year ending June 30: Principal Interest 2008 $ 12,181,940 $ 12,159,202 2009 15,426,981 11,765,031 2010 16,198,683 11,008,188 2011 16,950,530 10,264,615 2012 17,757,789 9,476,301 2013-2017 71,644,063 35,630,272 2018-2022 61,310,954 20,241,562 2023—2027 49,454,033 6,849,813 2028—2032 6,924,223 546,791 2033—2037 834,012 240,020 2038—2040 598,131 42,592 Total 269.281.339 $118 2.2387 -65 - COUNTY OF HAWAII Notes to the Basic Financial Statements June 30,2007 Refunded Bonds 2007 Series B In fiscal year 2007,the County issued$20,820,000 in refunding bonds as the 2007 Series B general obligation bond issue. The refunding bonds have a true interest cost of 3.900%and were issued to advance refund the$20,795,000 of callable bonds outstanding of the 1999 Series A general obligation bond issue. The bonds refunded bore interest at rates ranging from 5.125%to 5.625%. The par amount of $20,820,000 plus a premium of$900,326 and a payment of$235,039 from the debt service fund,minus$140,110 in underwriting fees,insurance and other issuance costs resulted in net proceeds of$21,815,255. The net proceeds were used to purchase U.S. government securities,which were deposited in an irrevocable trust administered by an escrow agent and will provide full payment on the outstanding 1999 Series A refunded bonds on May 15,2009. The bonds were considered defeased and are not included in the government-wide statement of net assets. The County's total debt service requirements over the next twelve years will decrease by $2,464,752 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$1,389,253. 2007 Series C Also in fiscal year 2007,the County issued$10,787,388 in refunding bonds as the 2007 Series C general obligation bond issue. The refunding bonds have a true interest cost of 3.987%and were issued to advance refund the$10,627,174 of callable bonds outstanding of the 2001 Series A general obligation bond issue. The bonds refunded bore interest at rates ranging from 4.50%to 5.50%. The par amount of $10,787,388 plus a premium of$409,477 and a payment of$23,218 from the debt service fund,minus$78,408 in underwriting fees, insurance and other issuance costs resulted in net proceeds of$11,141,675. The net proceeds were used to purchase U.S. government securities,which were deposited in an irrevocable trust administered by an escrow agent and will provide full payment on the outstanding 2001 Series A refunded bonds on July 15,2011. The bonds were considered defeased and are not included in the government-wide statement of net assets. The County's total debt service requirements over the next fifteen years will decrease by $1,062,695 as a result of the refunding,and the net present value savings was$851,672. As of June 30,2007,bonds outstanding considered defeased amounted to$31,422,174. Bond Premiums During the year,a bond premium of$1,789,402 was received from the 2007 Series A general obligation bonds. At June 30,2007,total unamortized bond premiums were$4,859,956, which is being amortized over the remaining life of the respective bond issues. -66- COUNTY OF HAWAII Notes to the Basic Financial Statements June 30,2007 Bonds Authorized and Unissued The County Council has authorized the issuance of$47 million in general obligation bonds to finance specified capital improvement projects. At June 30,2007,$7 million were not yet issued. Subsequent Events On September 11,2007,the County Council authorized the issuance of$40 million in general obligation bonds to finance a portion of the Waikoloa Workforce Housing Project. In addition,on October 19,2007,the County Council authorized the issuance of$147,000 in general obligation bonds for the Department of Water Supply to finance the Andrade Camp waterline improvements. State Revolving Fund Loans The County has obtained loans to assist in financing mandated wastewater projects from the State Water Pollution Control Revolving Fund(SRF). The purpose of this revolving fund is to provide low-interest, long-term loans and other financial assistance to the four counties in the state to finance construction of wastewater projects. The County has fifteen projects approved for funding with these loans. The schedule below shows the County's SRF transactions for the fiscal year ended June 30,2007: Loans Approved Loan Balance Loan Balance Due within Authorized Amount June 30,2006 Additions Retiremenu June 30,2007 one year Hilo WWTP $12,724,311 $5,244,784 $ $ 694,910 $4,549,874 $ 712,283 Waiakea Mill 1,300,000 602,676 - 68,987 533,689 70,711 Waiakea Hslts 459,321 190,098 - 25,187 164,911 25,817 Waiakea Hslts II 5,024,266 3,723,065 - 244,084 3,478,981 250,506 Ainako A&B 2,239,174 1,079,618 - 117,450 962,168 119,882 Kalanianaole 1,499,944 850,372 78,686 771,686 81,080 Kalanianaole RR 5,000,000 1,455,696 - 63,337 1,392,359 65,043 Alii Drive A&B 3,210,243 1,537,828 173,943 1,363,885 178,813 AM Drive C&D 3,780,000 2,031,078 195,781 1,835,297 199,835 Alii Drive F&F 2,112,654 1,288,364 111,993 1,176,371 115,400 Waiaha Bay 3,697,893 2,050,838 191,394 1,859,444 196,752 Kealakehe 1,300,071 601,578 68,861 532,717 70,583 HolualoaBay 3,080,000 1,901,109 156,369 1,744,740 161,127 PaukaaCCS 2,143,448 1,558,119 103,564 1,454,555 105,978 Cesspool Conv 8,908,035 -- 6,254,922 -- 6,254,922 302,487 Pahoehoe 2.817.760 2,298.119 126.967 2371.152 130.308 $2fi 413 U2 -67 - COUNTY OF HAWAII Notes to the Basic Financial Statements June 30,2007 The loans bear interest at 0.50%to 3.02%,exclusive of a 1.00%loan fee for all loans except for the Hawaii County Cesspool Conversion Project which is subject to a 0.25%loan fee,and require payments through fiscal year 2027. Debt service to maturity for disbursements to date on these projects are as follows: Governmental Activities Fiscal year ending June 30: Principal Interest 2008 $2,786,605 $ 942,190 2009 2,856,028 866,454 2010 2,923,237 792,777 2011 2,992,267 717,132 2012 3,062,984 639,648 2013-2017 10,199,622 1,625,292 2018-2022 3,688,237 269,653 2023—2027 1,737,771 40,345 Total 30.246.751 4 1 Other General Long-Term Obligations The following is a summary of other general long-term obligations transactions for the fiscal year ended June 30,2007: Balance Deductions Balance Due within June 30,2006 Additions &Payments June 30,2007 one ye Governmental activities: Compensated absences $24,066,380 $11,071,723 ($9,389,945) $25,748,158 $6,606,708 Claims and judgments (see Note 12) 21,340,393 1,495,883 (4,527,984) 18,308,292 3,282,252 Capital lease obligations (see Note 8) 2,864,515 2,402,731 (1,181,511) 4,085,735 1,418,078 Landfill closure costs (see Note 9) 18.663,000 2,806,000 (228,000) 21,241,000 183,103 Total 66.934.288 $17,776.337 015.327.440) 69.383.185 11.490.141 Fund Balances-Debt Service Funds The fund balance in the debt service funds at June 30,2007 includes$16,990,625,which is available for principal payments on general obligation bonds and$1,770,527,which is reserved for the payment of interest on the bonds. Enterprise Fund Notes Payable The Kulaimano Elderly Housing Project(Project)is indebted to the U.S.Department of Agriculture, Farmers Home Administration on two notes payable with balances aggregating -68- COUNTY OF HAWAII Notes to the Basic Financial Statements June 30,2007 $995,854 at June 30,2007. The notes,which mature in September 2029,are repayable in monthly installments of$7,826 including interest and are collateralized by substantially all of the project's property and equipment. Although the stated annual rate of interest on the notes is 9%, such rate is reduced to 7%for as long as the Project has a U.S.Department of Housing and Urban Development Section 8 Housing Assistance Payment contract in effect for all or part of the units within the Project. The following is a summary of enterprise fund notes payable transactions for the fiscal year ended June 30,2007: Balance at June 30,2006 $1,019,386 Deductions 23 532 Balance at June 30,2007 995,854 Less current portion (24,994) Note payable,net of current portion $ 970.860 The following is a summary of the annual maturities for the enterprise fund notes payable: Business-type Activities Fiscal year ending June 30: Principal Interest 2008 $ 24,994 $ 68,918 2009 26,801 67,111 2010 28,738 65,174 2011 30,816 63,096 2012 33,043 60,869 2013-2017 204,694 264,866 2018-2022 290,179 179,381 2023—2027 356,589 59,124 Total $995,854 $$� Special Assessment Bonds The County has outstanding special assessment bonds for one improvement district. In 1991, the County issued$14 million of special assessment bonds for Improvement District No. 17, Kaloko Subdivision,to finance a roadway and water system. In 2001,the County refunded the remaining bonds outstanding of$6,370,000. The bonds mature annually through 2011 and bear interest at 7.375%. Total special assessment bonds payable were$3,870,000 at June 30,2007. These are not general obligation bonds and the County is not obligated in any manner for the repayment of these bonds. The bonds are secured by a first lien on the land benefited by the improvements, and are to be repaid from the annual assessments levied against the owners of the land. The -69- COUNTY OF HAWAII Notes to the Basic Financial Statements June 30, 2007 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. Accordingly,these bonds are not reflected on the County's government-wide statement of net assets. The following is a summary of special assessment bond transactions for Improvement District No. 17,Kaloko Subdivision,for the fiscal year ended June 30,2007: Balance at June 30,2006 $4,490,000 Deductions (620,000 Balance at June 30,2007 3.870.000 The following is a summary of the annual maturities for the special assessment bonds: Year ending June 30: Principal Interest 2008 $ 670,000 $260,706 2009 715,000 209,634 2010 770,000 154,875 2011 825,000 96,059 2012 890,000 32,820 Total 3.870.00 7 4 4 The County has issued general obligation bonds on behalf of Improvement District No. 18 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 bonds mature annually through 2039 and bear interest at 3.0% to 4.75%. Total general obligation bonds payable included in the government-wide statement of net assets were$3,804,937 at June 30,2007. 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. -70- COUNTY OF HAWAII Notes to the Basic Financial Statements June 30,2007 The following is a summary of bond transactions for Improvement District No. 18, Coastview/Wonderview Water Improvements,forthe fiscal year ended June 30,2007: Balance at June 30,2006 $3,887,493 Additions -- Deductions (82,556) Balance at June 30,2007 U_&4,M The following is a summary of the annual maturities for the improvement district general obligation bonds: Year ending June 30: Principal Interest 2008 $ 85,802 $ 172,927 2009 89,181 169,479 2010 92,699 165,889 2011 96,362 162,149 2012 58,449 158,883 2013-2017 335,659 749,990 2018-2022 421,386 662,267 2023—2027 529,033 552,108 2028—2032 664,223 413,766 2033—2037 834,012 240,020 2038—2040 598,131 42,593 Total 3.490.071 11. COMMITMENTS AND CONTINGENCIES Contractual commitments— Contractual commitments for capital projects,expenses,and supplies at June 30,2007,except in the enterprise funds,are reflected in the balance sheets as fund balance reserved for encumbrances. 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 grant. 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 assets(see Note 12). Although the outcome of the various claims and -71 - COUNTY OF HAWAII Notes to the Basic Financial Statements June 30,2007 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 affect on the financial condition of the County. ADA compliance—The County has entered into two stipulated agreements approved by the federal court to implement provisions of the Americans with Disabilities Act(ADA). With respect to the first stipulated agreement relating to curb cuts,the County,with the help of a consultant,surveyed 669 intersections,then ranked them in order of priority. A transition plan,along with a funding commitment,was approved by the County Council. The total cost of all curb cuts was estimated to be$6.2 million. The cost of the first phase of the plan was $3 million,to be used in high priority areas such as government facilities,schools,and hospitals. The remaining cost will cover curb cuts at parks and in low-density single family residential areas. All corrective action was to be completed by July 2005,with an estimated 682 ramps to be completed. Funding allocated so far for this effort is$10.6 million. Since the proposed timetable proved to be too ambitious,the parties amended the agreement to require contracting by July 2005,rather than completion by that date. Pursuant to the April 2005 Stipulation of the Parties and Order of the Court,all curb ramps for 2005 and most curb ramps for 2004 were deferred. In the first phase,construction of curb ramps commenced in 2000 and ended in 2004,whereby 229 curb ramps were completed. In the second phase, 153 proposed curb ramps were deferred and 161 curb ramps were to be constructed; 151 out of the 161 are substantially completed,the remaining 10 curb ramps are being evaluated. We will be seeking closure of this matter with the federal court. In addition,the Department of Public Works has developed and advertised Procedures for Requesting New Curb Ramps or Modifications to Existing Curb Ramps within the County Streets. The second stipulated agreement relates to the Department of Parks and Recreation(the Parks Department). The agreement required the Parks Department 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 has been completed and approved by the County Council. The cost impact of implementation is not material because the necessary modifications are primarily procedural. This is an ongoing effort. The second part of this stipulated agreement is the reevaluation of all County facilities,which was completed and accepted by the County Council on June 30,2000. Approximately 240 County facilities were surveyed as part of this effort. The tentative completion date of all necessary repairs and renovations is 12 years from the date the County Council accepted the self-evaluation. The original estimated cost of the facilities repairs was $14.8 million,which will be spent over the 12 year period. Funding allocated so far for facilities repairs is$17.5 million,with another$4 million of federal funding anticipated. through community development block grants over the next2 years. Since 2000,the Department of Parks and Recreation has requested$2 to$3 million a year for the different park facilities' ADA projects,and recently,the Department of Public Works has requested an additional$2 million a year for the other County ADA facilities' project. Parties are currently working on a plan to ensure implementation of a Transition Plan with the assistance -72- COUNTY OF HAWAII Notes to the Basic Financial Statements June 30,2007 of a court Monitor and an ADA Specialist,to obtain extensions on the initial deadlines for completion that were set in the Original Transition Plan and to establish a Revised Transition Plan to satisfy the requirements of the ADA. In addition,the County's ADA coordinator (Equal Opportunity Officer)has access to an identifiable account of$50,000 to handle requests for reasonable accommodations for County departments;the procedures for these requests have been drafted,but not finalized. 12. RISK MANAGEMENT The County is exposed to various risks of losses related to torts;theft of,damage to,and destruction of assets;errors and omissions;injuries to employees;and natural disasters. The County maintains fire and commercial multiple peril insurance on County facilities,flood insurance on selected structures,medical malpractice insurance for emergency medical technicians, general liability insurance for water safety officers,aviation liability for helicopter operations,automobile coverage on transit buses,and no-fault insurance coverage for privately owned police vehicles. There was no reduction in insurance coverage during the year from coverage in the prior year. During the past three fiscal years,the amount of settlements in cases covered by insurance have not exceeded the insurance coverage. The County is substantially self-insured for its vehicles as well as for all other perils including workers'compensation and general liability. 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 assets. At June 30,2007,the amount of this liability was$18,308,292. This is the County's best estimate based on available information. Changes in the reported liability since June 30,2005 are given below. General Workers' Total Liability ComRensation Liabili Balance at June 30,2005 $9,963,152 $16,639,137 $26,602,289 Incurred claims(including IBNR)* (412,874) 52,510 (360,364) Claim payments (1.856,902) (3,044,630) X4,901,532) Balance at June 30,2006 $7,693,376 $13,647,017 $21,340,393 Incurred claims(including IBNR)* 403,514 1,092,369 1,495,883 Claim payments (2,093,882) _(2,434,102) (4,527,984) Balance at June 30,2007 6.003.008 $12.305284 $18.308.292 *Net of new claims liability and old claims resolved at less than previous estimate. -73 - COUNTY OF HAWAII Notes to the Basic Financial Statements June 30,2007 13. EMPLOYEE BENEFIT PLANS Pension Plan Plan description All full-time employees of the County participate in the Employees' Retirement System of the State of Hawaii(System),a cost-sharing multiple-employer defined benefit pension plan. The System was established by Chapter 88 of the Hawaii Revised Statutes(HRS)and is governed by a Board of Trustees. All contributions,benefits and eligibility requirements are established by Chapter 88,HRS,and can be amended by legislative action. The System regards the County,including its component unit,as one employer. Therefore, separate information for the primary government and its component unit is not available. All information given below on the pension plan is for the reporting entity as a whole,including both the primary government and its component unit. All of the County's full-time employees are eligible to participate in the System. The System consists of a contributory retirement plan and a noncontributory retirement plan. Eligible employees, in service and a member of the existing contributory plan on June 30, 1984,were given an option to remain in the existing plan or join the noncontributory plan,effective January 1, 1985. All new eligible employees hired after June 30, 1984 generally become members of the noncontributory plan. Both plans provide death and disability benefits and a cost of living adjustment. In the contributory plan,employees generally may elect normal retirement at age 55 with 5 or 10 years of credited service or elect early retirement at any age with 25 years of credited service. Such employees are generally entitled to retirement benefits,payable monthly for life,of 2%or 2'/z%of their average final salary,as defined,for each year of credited service with certain limitations. Benefits fully vest on reaching five years of service;retirement benefits are reduced for early retirement. In the noncontributory plan,employees may elect normal retirement at age 62 with 10 years of credited service or at age 55 with 30 years of credited service,or elect early retirement at age 55 with 20 years of credited service. Such employees are entitled to retirement benefits,payable monthly for life, of 1.25%of their average final salary,as defined, for each year of credited service. Benefits fully vest on reaching ten years of service;retirement benefits are reduced for early retirement. On July 1,2006,a new hybrid contributory plan will become effective pursuant to Act 179, Session Laws of Hawaii of 2004. Members in the hybrid plan will contribute 6%of their salary to the plan and will be eligible for retirement at age 62 with 5 years of credited service or age 55 and 30 years of credited service. Members will receive a benefit multiplier of 2% for each year of credited service in the hybrid plan. The benefit payment options are similar to the current contributory plan. Most of the new employees hired from July 1,2006 will be required to join the hybrid plan. -74- COUNTY OF HAWAII Notes to the Basic Financial Statements June 30,2007 The System issues a Comprehensive Annual Financial Report that may be obtained by writing to the Employees' Retirement System of the State ofHawai`i,201 Merchant Street, Suite 1400,Honolulu,Hawaii 96813. Funding policy All funding requirements are established by Chapter 88,HRS,and can be amended by the state legislature. Covered contributory plan employees are required to contribute 7.8%or 12.2%of their salary to the plan;the County is required to contribute the remaining amounts necessary to pay contributory plan benefits when due. The County is also required to contribute all amounts necessary to pay noncontributory benefits when due. The County's contribution requirements are actuarially determined based on actuarial assumptions established by Chapter 88,HRS. Effective July 1,2005,employer contribution rates are a fixed percentage of compensation,including the normal cost plus amounts required to pay for the unfunded actuarial accrued liability. The employer contribution rates in effect at June 30, 2007 were 15.75%for Police and Fire employees and 13.75%for all other employees. The County's contributions to the System for the fiscal years ended June 30,2005,2006 and 2007 were$10,487,763,$15,452,562 and$16,337,218,respectively,equal to the required contributions for each year. Post-Retirement Benefits In addition to providing the pension benefits described above,the County is required by state statute to contribute to the Hawaii Employer-Union Health Benefits Trust Fund(the EUTF), a statewide program which provides health and group life insurance for all retired and active County employees,their dependents and their beneficiaries. The state and other counties also participate in the fund. For employees hired prior to July 1, 1996 who retire with at least ten years of credited service,the County is required to pay 100%of the premiums of the medical, adult dental,prescription drug,vision,and group life insurance plans elected by the retiree. For employees hired prior to July 1, 1996 who retire with less than ten years of credited service,the County is required to pay half of the monthly premium cost ofthe above plans. For employees hired July 1, 1996 or after,the amount of the premium cost the County is required to pay varies depending on the employee's years of service at the time of retirement. Currently,the County has 1,131 former employees who have retired with at least ten years of credited service and are receiving the full benefit. Two additional employees have retired with less than ten years of service and have half of their medical premiums paid by the County. For each retiree and retiree's spouse eligible for Medicare,the County also pays $93.50 per month as reimbursement of their Medicare premiums. The County's contribution is recorded as an expenditure when paid. The amount of the contribution is limited by state statute to the actual cost of benefit coverage. During the fiscal year ended June 30,2007,the County's contribution to the EUTF for retired employees totaled$6.8 million. -75 - COUNTY OF HAWAII Notes to the Basic Financial Statements June 30,2007 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,in accordance with GASB Statement No.32, Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans, deferred compensation plan assets are not reported in the accompanying basic financial statements. 14. COMPONENT UNIT DISCLOSURES Deposits and Investments At June 30,2007, cash,time certificates of deposit,money market funds,and repurchase agreements of$67,105,777,with bank balances of$69,446,242,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 investments received by the Department that are refundable or restricted as to use,and is recorded as a restricted asset. Such funds amounted to$16,207,996 at June 30,2007. At June 30,2007,the Department's investment portfolio consists primarily of repurchase agreements,certificates of deposit, and a discounted note held by the County on behalf of the Department. 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 -76- COUNTY OF HAWAII Notes to the Basic Financial Statements June 30,2007 governmental agencies,private subdividers and customers at their cost or estimated cost. Construction costs include amounts for contract work,engineering supervision and other direct and indirect costs. Construction period interest is capitalized on utility plan constructed with tax-exempt debt. Depreciation on the Department 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 20 years Water systems 10 to 40 years The capital assets of the Department at June 30,2007 were as follows: Utility plant in service $295,675,414 Less: accumulated depreciation (140,834,013) 154,841,401 Land and rights 815,962 Construction in progress 42,489,082 Net capital assets $198,146.445 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$36,708,368 at June 30,2007. - 77- COUNTY OF HAWAII Notes to the Basic Financial Statements June 30,2007 General obligation bonds payable issued on behalf of the Department and other long-term debt at June 30,2007 are comprised of the following: Public improvement bonds: 1993 Series A at 5.05%to 5.6%,due through 2013 $4,395,000 1998 Series A at 4.5%,due through 2033 672,800 2001 Series A at 4.0%to 5.5%,due through 2010 1,080,000 2004 Series D at 4.5%,due through 2039 255,832 2006 Series A at 4.0%to 5.0%,due through 2026 24,242,500 Total public improvement bonds 30,646,132 Public improvement refunding bonds: 2004 Series at 5.0%,due through 2015 309,624 2007 Series at 4.0%to 5.0%,due through 2021 5,752,612 Total public improvement refunding bonds 6,062,236 State revolving fund loan,interest at 0.41%to 1.37%, due through 2027 5,599,767 Total 42.308.13 5 At June 30,2007,future principal payments for long-term debt are scheduled as follows: Fiscal year ending June 30: 2008 $ 2,200,000 2009 2,282,000 2010 2,388,000 2011 2,528,000 2012 2,637,000 2013-2017 11,070,000 2018-2022 11,540,000 2023—2027 7,308,000 2028—2032 233,000 2033—2037 100,000 2038—2039 22,135 Total 42.308.135 Contributions in Aid of Construction Effective July 1,2000,the Department adopted GASB Statement No.33,Accounting and Financial Reporting for Nonexchange Transactions,which requires the Department to recognize contributions in aid of construction as nonoperating revenues. Contributions in aid of construction were previously recognized as contributed capital. The Department -78- COUNTY OF HAWAII Notes to the Basic Financial Statements June 30,2007 recognized$5,730,506 of contributions in aid of construction as nonoperating revenues for the fiscal year ended June 30,2007. Commitments and Contingent Liabilities Claims and judgments—The Department is self-insured for workers' compensation and other perils. The liability at June 30,2007 for workers' compensation claims of$202,000 was estimated based on a combination of case-by-case review and the application of historical experience to outstanding claims. Construction contracts—The Department is obligated under construction contracts for the utility plant and other projects. Such commitments approximated$17,659,000 at June 30,2007. -79 - This page intentionally left blank. -80- NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS HIGHWAY FUND-Used to account for the costs of maintaining the County's highways and streets. Financing is provided primarily by fuel,motor vehicle weight and public utility franchise taxes. SEWER FUND-Used to account for costs of operating the County's various sewerage systems. Financing is provided by charges to users for sewer services SOLID WASTE FUND—Used to accumulate moneys for the operation,maintenance,and administration of the County's solid waste management,collection and disposal systems. Financing is provided by tipping fees at the landfills and by disposal permit fees. CEMETERY FUND-Used to accumulate moneys to guarantee the future maintenance of County cemetery sites. Financing is provided from the sale of burial lots in County cemeteries. PARKING METER FUND-Used to account for the costs of maintaining County oo-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 annud fees collected with motor vehicle registrations. BIKEWAY FUND-Used to accumulate moneys for the construction of bikeways within the County. Financing is provided by bicycle license fees. WORKFORCE INVESTMENT ACT FUND-Used to account for employment and training services provided to economically disadvantaged adults,dislocated workers and youth. Financing is provided by federal grants. GOLF COURSE FUND-Used to account for the cost of operating the Hilo Municipal Golf Course. Funding is provided from green fees and payments from restaurant and pro shop concessionaires. GEOTHERMAL RELOCA TION RE VOL VING FUND-Used to account for the County's share of geothermal resource royalties received from the operator of a geothermal power plant located in he County. The funds are earmarked for a geothermal relocation program. BEA UTIFICA TION FUND-Used to accumulate moneys for the beautification of highways and disposal of abandoned vehicles within the County. Financing is provided by assessments on vehile registrations. HAWAII COUNTY HOUSING AGENCY-Used to account for Federal and County moneys used to provide public housing assistance within the County. PARK DEDICATION FUND-Used to account for moneys deposited with the County by subdividers to provide land for parks and playgrounds in subdivisions. DEBT SERVICE FUNDS INTEREST FUND-Used to accumulate moneys for payment of interest on general obligation bonds. Moneys required to service interest maturities are transferred annually from the Geneal Fund. BOND REDEMPTION FUND-Used to accumulate moneys for the payment of general obligation bonds. Moneys required to retire the bonds are transferred from the General Fund one year in advance of maturity. This page intentionally left blank. - 81 - COUNTY OF HAWAII Nonmajor Governmental Funds Combining Balance Sheet June 30,2007 Special Revenue Funds Solid Parking Highway Sewer Waste Cemetery Meter Fund Fund Fund Fund Fund Assets Cash and cash equivalents $10,327,743 $ 8,877,990 $5,355,257 $50,409 $112,717 Investments - - - - - Imprest fund - 200 250 - - Receivables: Due from other governments 68,098 2,983 303,206 - - Due from other governmental funds 280,964 18,696 15,953 - - Due from other nongovernmental funds - 2,700 - - - Trade,net of allowance for doubtful accounts - 1,127,318 1,895,309 - - Other 762,646 - 765,311 - - 1,111,708 1,151,697 2,979,779 - - Total assets $11,439,451 $10,029,887 $8,335,286 $50,409 $112,717 Liabilities and Fund Balances Liabilities: Accounts payable $ 658,417 $ 103,677 $1,498,868 $ - $ - Due to other governmental funds 121,500 10,251 15,912 -Unearned revenue - 1,127,318 1,924,596 - - Accrued liabilities 703 13,389 - -Total liabilities 780,620 1,254,635 3,439,376 - - Fund balances: Reserved for: Encumbrances 3,883,426 1,062,129 1,849,367 - - Debt service - - - - - Unreserved: 6,775,405 7,713,123 3,046,543 50,409 112,717 Total fund balances 10,658,831 8,775,252 4,895,910 50,409 112,717 Total liabilities and fund balances $11,439,451 $10,029,887 $8,335,286 $50,409 $112,717 - 82 - Special Revenue Funds Vehicle Workforce Golf Geothermal Beauti- Park Disposal Bikeway Investment Course Relocation fication Housing Dedication Fund Fund Act Fund Fund Rev.Fund Fund Agency Fund $2,720,175 $386,992 $ - $ 19,626 $ 2,588,611 $ 804,919 $ 2,411,596 $ - - - - - - 3,204,614 80,958 2,000 - - 200 - - 330,883 - - - 14,121 - - - - - 67,502 - - - 38,994 2,028 - - 79,780 - - 369,877 2,028 - - 161,403 - $2,720,175 $386,992 $ 369,877 $ 23,654 $ 2,588,611 $ 804,919 $ 5,777;813 $ 80,958 $ 135,097 $ 75 $ - $ 1,078 $ - $ 1,163 $ 52,251 $ - - - 369,877 3,978 - - - - - - - - - 114,103 - 135,097 75 369,877 5,056 - 1,163 166,354 - 242,171 3,232 - 54,469 1,640,416 - 2,958,542 - 2,342,907 383,685 - (35,871) 948,195 803,756 2,652,917 80,958 2,585,078 386,917 - 18,598 2,588,611 803,756 5,611,459 80,958 $2,720,175 $386,992 $ 369,877 $ 23,654 $ 2,588,611 $ 804,919 $ 5,777,813 $ 80,958 (Continued) - 83 - COUNTY OF HAWAII Nonmajor Governmental Funds Combining Balance Sheet June 30,2007 (Concluded) Debt Service Funds Total Bond Nonmajor Interest Redemption Governmental Fund Fund Funds Assets Cash and cash equivalents $1,843,048 $ 1,286,597 $ 36,785,680 Investments - 15,944,028 19,229,600 Imprest fund - - 2,650 Receivables: Due from other governments - - 719,291 Due from other governmental funds - - 383,115 Due from other nongovernmental funds - - 2,700 Trade,net of allowance for doubtful accounts - - 3,022,627 Other - - 1,648,759 - 5,776,492 Total assets $1,843,048 $ 17,230,625 $ 61,794,422 Liabilities and Fund Balances Liabilities: Accounts payable $ - $ - $ 2,450,626 Due to other governmental funds - - 521,518 Deferred revenue - - 3,051,914 Accrued liabilities 72,521 240,000 440,716 Total liabilities 72,521 240,000 6,464,774 Fund balances: Reserved for: Encumbrances - - 11,693,752 Debt service 1,770,527 16,990,625 18,761,152 Unreserved: - - 24,874,744 Total fund balances 1,770,527 16,990,625 55,329,648 Total liabilities and fund balances $1,843,048 $ 17,230,625 $ 61,794,422 See accompanying independent auditors'report. - 84 - This page intentionally left blank. - 85 - COUNTY OF HAWAII Nonmajor Governmental Funds Combining Statement of Revenues,Expenditures,and Changes in Fund Balances(Deficit) For the Fiscal Year Ended June 30,2007 Special Revenue Funds Solid Parking Highway Sewer Waste Cemetery Meter Fund Fund Fund Fund Fund Revenues Fuel tax $ 8,471,453 $ - $ - $ - $ - Public utility franchise tax 8,520,133 - - - - Licenses and permits 6,816,451 - - - - Intergovernmental 409,198 2,983 1,284,311 - - Charges for services - 7,326,584 9,118,704 - 13,478 Investment earnings - - - - - Miscellaneous 484,640 92 84 11,750 - Total revenues 24,701,875 7,329,659 10,403,099 11,750 13,478 Expenditures Current: Public safety 4,916,044 - - - - Highways and streets 10,975,887 - - - - Sanitation - 5,175,592 24,391,432 - - Health,education and welfare - - - Culture and recreation - - - _ - Pension and retirement contributions 1,446,438 365,161 825,225 - - Employees'health insurance 643,513 166,605 368,697 - - Miscellaneous 502,957 325,717 172,394 - - Debt service: Principal - - 819,213 - - Interest - - 82,098 - - Total expenditures 18,484,839 6,033,075 26,659,059 - - Excess(deficiency)of revenues over expenditures 6,217,036 1,296,584 16,255,960) 11,750 13,478 Other Financing Sources(Uses) Transfers in 812,000 - 14,656,244 - - Increase in capital leases - - 2,402,731 - - Transfers out (6,141,687) - - - Total other financing sources(uses) (5,329,687) - 17,058,975 - Net change in fund balances 887,349 1,296,584 803,015 11,750 13,478 Fund balances(deficit)at beginning of year 9,771,482 7,478,668 4,092,895 38,659 99,239 Fund balances at end of year $ 10,658,831 $ 8,775,252 $ 4,895,910 $ 50,409 $112,717 - 86- Special Revenue Funds Vehicle Workforce Golf Geothermal Beauti- Park Disposal Bikeway Investment Course Relocation fication Housing Dedication Fund Fund Act Fund Fund Rev.Fund Fund Agency Fund 2,037,484 27,035 - - - 169,800 - - - - 1,652,602 - - - 11,547,079 - 406 - - 751,831 - - - - - - - - - - 176,226 3,187 - - - - 589,982 - 298,174 - 2,037,890 27,035 1,652,602 751,831 589,982 169,800 12,021,479 3,187 - 6,146 - - - 38,786 - - 1,220,511 - - - _ - _ _ - - 1,652,602 - - - 13,584,884 - - - - 845,649 - - - 17,139 - - 134,269 - - 414,324 - 10,247 - - 68,938 - - 139,266 - - - - 10,612 - - - - - - - 1,629 - - 339 - 1,247,897 6,146 1,652,602 1,059,468 - 38,786 14,140,442 - 789,993 20,889 - 307,637 589,982 131,014 2,118,963 3,187 - - - 342,531 - - 1,295,399 - 342,531 - - 1,295,399 - 789,993 20,889 - 34,894 589,982 131,014 (823,564) 3,187 1,795,085 366,028 - 16,296) 1,998,629 672,742 6,435,023 77,771 $2,585,078 $ 386,917 $ - $ 18,598 $ 2,588,611 $ 803,756 $5,611,459 $ 80,958 (Continued) -87 - COUNTY OF HAWAII Nonmajor Governmental Funds Combining Statement of Revenues,Expenditures,and Changes in Fund Balances(Deficit) For the Fiscal Year Ended June 30,2007 (Concluded) Debt Service Funds Total Bond Nonmajor Interest Redemption Governmental Fund Fund Funds Revenues Fuel tax $ - $ - $ 8,471,453 Public utility franchise tax - - 8,520,133 Licenses and permits - - 9,050,770 Intergovernmental - - 14,896,173 Charges for services - - 17,211,003 Investment earnings - - 179,413 Miscellaneous - - 1,384,722 Total revenues - - 59,713,667 Expenditures Current: Public safety - - 4,916,044 Highways and streets - - 11,020,819 Sanitation - - 30,787,535 Health,education and welfare - - 15,237,486 Culture and recreation - - 845,649 Pension and retirement contributions - - 3,202,556 Employees'health insurance - - 1,397,266 Miscellaneous - - 1,011,680 Debt service: Principal - 14,894,839 15,715,681 Interest 9,773,759 - 9,856,196 Total expenditures 9,773,759 14,894,839 93,990,912 Excess(deficiency)of revenues over expenditures 9,773,759) (14,894,839) (34,277,245) Other Financing Sources(Uses) Transfers in 11,258,133 15,387,910 43,752,217 Increase in capital leases - - 2,402,731 Transfers out - - (6,141,687) Total other financing sources(uses) 11,258,133 15,387,910 40,013,261 Net change in fund balances 1,484,374 493,071 5,736,016 Fund balances(deficit)at beginning of year 286,153 16,497,554 49,593,632 Fund balances at end of year $1,770,527 $ 16,990,625 $55,329,648 See accompanying independent auditors'report. -88- 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 30,2007 Actual Variance Original Final (Budgetary Positive Budget Budget Basis) (Negative) Revenues: Taxes: Fuel tax $ 7,895,000 $7,895,000 $ 8,471,453 $ 576,453 Public utility franchise tax 7,500,000 7,500,000 8,520,133 1,020,133 Total taxes 15,395,000 15,395,000 16,991,586 1,596,586 Licenses and permits-motor vehicle weight taxes 6,305,141 6,305,141 6,816,451 511,310 Intergovernmental 302,817 302,817 409,198 106,381 Charges for current services 180,000 180,000 342,778 162,778 Miscellaneous 89,950 99,950 141,862 41,912 Total revenues 22,272,908 22,282,908 24,701,875 2,418,967 Expenditures: Public safety-traffic engineering 5,435,188 5,627,188 4,796,038 831,150 Highways and streets 11,696,193 12,899,427 11,083,204 1,816,223 Highways and streets-mass transit 1,021,231 1,671,231 1,082,014 589,217 Pension and retirement contributions 1,427,408 1,455,620 1,446,438 9,182 Health fund 918,750 750,538 643,513 107,025 Miscellaneous 1,190,000 1,190,000 493,448 696,552 Total expenditures 21,688,770 23,594,004 19,544,655 4,049,349 Excess(deficiency)of revenues over expenditures 584,138 (1,311,096) 5,157,220 6,468,316 Other financing uses-transfers in(out)- General Fund 700,000 839,015 812,000 (27,015) Capital Projects Fund (4,908,415) (6,168,702) (6,141,687) 27,015 Total other financing uses (4,208,415) (5,329,687) (5,329,687) - Deficiency of revenues over expenditures and other uses (3,624,277) (6,640,783) (172,467) 6,468,316 Fund balance at beginning of year 9,771,482 9,771,482 9,771,482 - Fund balance at end of year $ 6,147,205 $3,130,699 $ 9,599,015 $ 6,468,316 See accompanying independent auditors'report. - 89- COUNTY OF HAWAII Sewer Fund Schedule of Revenues,Expenditures and Changes in Fund Balance- Budget and Actual(Budgetary Basis) For the Fiscal Year Ended June 30,2007 Actual Variance Original Final (Budgetary Positive Budget Budget Basis) (Negative) Revenues: Charges for current services- sewer fees $ 6,355,220 $ 6,355,220 $ 7,326,584 $ 971,364 Intergovernmental - - 2,983 2,983 Miscellaneous 200 200 92 (108) Total revenues 6,355,420 6,355,420 7,329,659 974,239 Expenditures: Sanitation 6,173,517 6,173,517 5,302,433 871,084 Pension and retirement contributions 518,706 518,706 365,161 153,545 Health fund 243,475 243,475 166,605 76,870 Miscellaneous 1,126,323 1,126,323 59,787 1,066,536 Total expenditures 8,062,021 8,062,021 5,893,986 2,168,035 Excess(deficiency)of revenues over expenditures (1,706,601) (1,706,601) 1,435,673 3,142,274 Fund balance at beginning of year 7,478,668 7,478,668 7,478,668 - Fund balance at end of year $ 5,772,067 $ 5,772,067 $ 8,914,341 $ 3,142,274 See accompanying independent auditors'report. -90- 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 30,2007 Actual Variance Original Final (Budgetary Positive Budget Budget Basis) (Negative) Revenues: Intergovernmental $ 974,000 $ 976,500 $ 911,909 $ (64,591) Charges for services-tipping fees 10,535,671 10,535,671 9,118,704 (1,416,967) Miscellaneous - - 84 84 Total revenues 11,509,671 11,512,171 10,030,697 (1,481,474) Expenditures: Sanitation 25,660,373 25,666,873 21,575,282 4,091,591 Pension and retirement contributions 925,500 925,500 825,225 100,275 Health fund 561,000 561,000 368,697 192,303 Miscellaneous 320,000 320,000 176,402 143,598 Total expenditures 27,466,873 27,473,373 22,945,606 4,527,767 Deficiency of revenues over expenditures (15,957,202) (15,961,202) (12,914,909) 3,046,293 Other financing sources: Transfers in-General Fund 14,483,706 14,487,706 14,656,244 168,538 Excess(deficiency)of revenues and other sources over expenditures (1,473,496) (1,473,496) 1,741,335 3,214,831 Fund balance at beginning of year 4,092,895 4,092,895 4,092,895 - Fund balance at end of year $2,619,399 $2,619,399 $5,834,230 $ 3,214,831 See accompanying independent auditors'report. -91 - COUNTY OF HAWAII Cemetery Fund Schedule of Revenues,Expenditures and Changes in Fund Balance- Budget and Actual(Budgetary Basis) For the Fiscal Year Ended June 30,2007 Actual Variance Original Final (Budgetary Positive Budget Budget Basis) (Negative) Revenues-miscellaneous-sale of cemetery plots $ 10,000 $ 10,000 $ 11,750 $ 1,750 Expenditures-health,education and welfare 10,000 10,000 - 10,000 Excess of revenues over expenditures - - 11,750 11,750 Fund balance at beginning of year 38,659 38,659 38,659 - Fund balance at end of year $ 38,659 $ 38,659 $ 50,409 $ 11,750 See accompanying independent auditors'report. -92- COUNTY OF HAWAII Parking Meter Fund Schedule of Revenues, Expenditures and Changes in Fund Balance- Budget and Actual(Budgetary Basis) For the Fiscal Year Ended June 30,2007 Actual Variance Original Final (Budgetary Positive Budget Budget Basis) (Negative) Revenues- Charges for current services-highways and streets $ - $ - $ 13,478 $ 13,478 Expenditures- Highways and streets _ _ _ - Excess of revenues over expenditures - - 13,478 13,478 Fund balance at beginning of year 99,239 99,239 99,239 - Fund balance at end of year $ 99,239 $ 99,239 $ 112,717 $ 13,478 See accompanying independent auditors'report. - 93 - COUNTY OF HAWAII Vehicle Disposal Fund Schedule of Revenues,Expenditures and Changes in Fund Balance- Budget and Actual(Budgetary Basis) For the Fiscal Year Ended June 30,2007 Actual Variance Original Final (Budgetary Positive Budget Budget Basis) (Negative) Revenues: Licenses and permits-vehicle disposal fee $1,908,000 $ 1,908,000 $2,037,484 $ 129,484 Charges for services-towing charges - - 406 406 Total revenues 1,908,000 1,908,000 2,037,890 129,890 Expenditures: Sanitation 2,740,769 2,740,769 1,253,319 1,487,450 Pension and retirement contributions 25,050 25,050 17,139 7,911 Health fund 20,700 20,700 10,247 10,453 Total expenditures 2,786,519 2,786,519 1,280,705 1,505,814 Excess(deficiency)of revenues over expenditures (878,519) (878,519) 757,185 1,635,704 Fund balance at beginning of year 1,795,085 1,795,085 1,795,085 - Fund balance at end of year $ 916,566 $ 916,566 $2,552,270 $ 1,635,704 See accompanying independent auditors'report. -94- COUNTY OF HAWAII Bikeway Fund Schedule of Revenues, Expenditures and Changes in Fund Balance- Budget and Actual(Budgetary Basis) For the Fiscal Year Ended June 30,2007 Original Actual Variance and Final (Budgetary Positive Budget Basis) (Negative) Revenues- licenses and permits- bicycle tax $ 25,000 $ 27,035 $ 2,035 Expenditures-highways and streets 171,000 378 170,622 Excess(deficiency)of revenues over expenditures (146,000) 26,657 172,657 Fund balance at beginning of year 366,028 366,028 - Fund balance at end of year $220,028 $392,685 $172,657 See accompanying independent auditors'report. -95 -