HomeMy WebLinkAbout2010 CAFR COMPREHENSIVE
ANNUAL FINANCIAL REPORT
Fiscal Year Ended June 30, 2010
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COUNTY OF HAWAII
Hilo, Hawaii
William P. Kenoi
Mayor
William Takaba
Managing Director
Prepared by
The Department of Finance
Nancy E. Crawford
Director of Finance
COUNTY OF HAWAII
Comprehensive Annual Financial Report
For the Fiscal Year Ended June 30,2010
Table of Contents
Page
INTRODUCTORY SECTION
Letter of Transmittal 1
GFOA Certificate of Achievement 7
Organization Chart 8
List of Elected Officials 9
List of Principal Officials 10
FINANCIAL SECTION
Report of Independent Auditors 11
Management's Discussion and Analysis 13
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Assets 26
Statement of Activities 28
Fund Financial Statements:
Balance Sheet-Governmental Funds 30
Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Assets 31
Statement of Revenues,Expenditures,and Changes in Fund Balances-
Governmental Funds 32
Reconciliation of the Change in Fund Balances of Governmental
Funds to the Statement of Activities 34
Statement of Revenues,Expenditures,and Changes in Fund Balance-
Budget and Actual(Budgetary Basis)-General Fund 36
Statement of Net Assets-Proprietary Funds 40
Statement of Revenues,Expenses,and Changes in Fund Net Assets-
Proprietary Funds 41
Statement of Cash Flows-Proprietary Funds 42
Statement of Fiduciary Net Assets-Fiduciary Funds 43
Statement of Changes in Fiduciary Net Assets-Fiduciary Funds 44
Notes to the Basic Financial Statements 45
Required Supplementary Information 86
FINANCIAL SECTION (Continued)
Page
Combining and Individual Nonmajor Fund Statements and Schedules:
Combining Balance Sheet-Nonmajor Governmental Funds 88
Combining Statement of Revenues,Expenditures,and Changes in Fund
Balances-Nonmajor Governmental Funds 92
Schedules of Revenues,Expenditures,and Changes in Fund Balances-
Budget and Actual(Budgetary Basis):
Highway Fund 95
Sewer Fund 96
Solid Waste Fund 97
Cemetery Fund 98
Parking Meter Fund 99
Vehicle Disposal Fund 100
Bikeway Fund 101
Workforce Investment Act Fund 102
Golf Course Fund 103
Geothermal Relocation and Community Benefits Fund 104
Beautification Fund 105
Hawaii County Housing Agency 106
Park Dedication Fund 107
Combining Statement of Net Assets-Agency Funds 108
Combining Statement of Changes in Assets and Liabilities-Agency Funds 110
Combining Statement of Net Assets-Private Purpose Trusts 115
Combining Statement of Changes in Net Assets-Private Purpose Trusts 116
STATISTICAL SECTION
Table 1 -Net Assets by Component 117
Table 2-Changes in Net Assets 118
Table 3 -Fund Balances,Governmental Funds 119
Table 4-Changes in Fund Balance,Governmental Funds 120
Table 5-Real Property Assessed Values by Classification and Tax Rates 121
Table 6-Principal Taxpayers 125
Table 7-Property Tax Levies and Collections 126
Table 8-Ratios of Outstanding Debt by Type 127
Table 9-Ratios of General Bonded Debt Outstanding 128
Table 10-Legal Debt Margin Information 129
Table 11 -Demographic and Economic Statistics 130
Table 12-Principal Employers,County of Hawaii 131
Table 13 -Full-Time Equivalent County Government Employees by Function 132
Table 14-Operating Indicators by Function 133
Table 15-Capital Asset Statistics by Functions 134
INTRODUCTORY SECTION
Ntr OF p
William P.Kenoi Nancy E.Crawford
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Mayor Director'
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Deanna S.Sako
T"OF Deputy�Director
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County of Hawaii
Finance Department
25 Atipuni Street, Room 2103 • Hilo,Hawaii 96720
(808)961-8234 • Fax(808)961-8569
December 30, 2010
The Honorable Mayor and Members of the Council
County of Hawai`i
25 Aupuni Street
Hilo,Hawaii 96720
We transmit herewith the Comprehensive Annual Financial Report for the County of Hawaii,
State of Hawaii (the County), for the fiscal year July 1, 2009 to June 30, 2010.
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, 2010 and results
of operations for the fiscal year then ended. The report is divided into three sections:
• The Tntroductory 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
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the County government. This component unit is included in the County's reporting entity
because of its financial relationship with the County.
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. Although 2009 proved to be a challenge for most of
the major sectors of the island's economy, the end of fiscal year 2010 and beginning of fiscal
year 2011 showed the early signs of an impending economic recovery.
The County's labor force numbered 83,167 at June 2010. The State of Hawaii overall is showing
signs that the unemployment rate has reached its peak and has begun a slow road to decreasing
and the County is no exception. A sign that the economy is on the road to improving instead of
the dramatic downturn that confronted the County in the prior year is the fact that the County's
unemployment rate at the end of fiscal year 2010(10.4%)was slightly lower than the end of
fiscal year 2009 (11.5%),whereas it had doubled between fiscal year 2008 and fiscal year 2009.
However despite the higher level of unemployment facing the State in recent years,the State
continued to remain below the national rate as it did prior to the onset of the recession.
Tourism—Tourism has always remained the major industry on the island. In addition to the
mild climate and natural beauty it shares with other areas in the state, the County features the
Hawai'i Volcanoes National Park. A popular attraction, the park is the most visited site in the
state,handling over 2 million visitors annually,which became even more popular with the
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increased activity of Kilauea Volcano. Another indication of the County's slowly rebounding
industry, is the fact that although total visitors to Hawaii for fiscal year 2010 was about even
with fiscal year 2009, total visitors for the month of June 2010 was up by almost 9%from the
prior year's June.
Construction—The County's second significant industry is construction,which also began to
show signs of recovery and even looked better for the Big Island than for the state overall in
2010. One important indicator of the sector's improving situation is the growth in private
permits from a year ago, especially in Kona.
Scientific Research and Development—Due largely to its unique geographic characteristics
which has attracted scientists in fields of astronomy,meteorology,volcanology, and
agriculture/aquaculture,the County has benefited economically by the significant investments
made in scientific research. The total astronomy related capital investment on Mauna Kea
exceeds $600 million and combined annual budgets are about$72 million. On July 21,2009,the
TMT Observatory Corporation announced that its board of directors had selected Mauna Kea
over Chile as the preferred site for the Thirty Meter Telescope (TMT). It is projected that the
TMT project will pour an estimated$1.2 billion into the economy over nine years,resulting in
300 construction jobs and 140 full-time permanent jobs. The Hawaiian Volcano Observatory in
Hawaii Volcanoes National Park and the Natural Energy Laboratory of Hawaii Authority at
Keahole, Kona are also major contributors to international research and the local economy.
Major Initiatives
For the Year
During the year,the County focused on public works,planning, and other issues affecting the
quality of life in the County.
Public Safety—Construction began on the building that will house the Pahoa Police Station and
an office for the Vehicle Registration&Licensing Division of the Department of Finance.
Expenditures related to this project totaled almost$4.0 million at the end of the year. This
project was in addition to the $5.4 million that was spent in recent years for the Pahoa Fire
Station and related offsite improvements for the entire complex.
The proposed development and construction of a new Fire Department Administration, Training,
and Emergency Communications complex was presented before the Planning Commission and
received a conditional land use approval.
The County has hired Scientel Wireless as project manager to upgrade the County's current radio
system to meet Federal Communications Commission(FCC) efficiency requirements.
Public Works—Construction continued on the Waikoloa Housing project with an additional $7.5
million being spent during the fiscal year. Construction also continued on the 85,000-square-
foot West Hawaii Civic Center on Kealakehe Parkway that began in 2008, and is scheduled for
completion in January 2011. Total project expenditures reached$34.3 million at the end of the
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fiscal year. The center will consolidate under one roof, 28 County departments, currently at
different locations in West Hawai'i, and one State agency.
Planning—The EnVision Downtown Hilo 2025 5-Year Action Plan Update has been completed
in draft form and is going through the final review stages. The Department has, also, engaged a
consultant to develop the Hawaii Livable Communities Code,which will be adopted in the
Zoning Code.
Environmental Management—The Department completed construction related to the various
site improvements at the West Hawaii Resource Recovery facilities,which include a new scrap
metal facility, organics collection and processing area and vehicle impound lot.
Public Access, Open Space and Natural Resources Preservation Fund—In January 2010,the
County purchased 151 acres at Kaiholena for$6.5 million. These properties contain some of the
most intact historic and cultural sites and traditionally used accesses to the shoreline used by the
public for subsistence fishing and shoreline gathering.
For the Future
Public Safety—Construction is expected to begin in the upcoming fiscal year for the new
Makalei Fire Station project. The County received an award of$4.1 million through the
Assistance to Firefighters Fire Station Construction grant program for this project.
The South Kona Police Station is nearing completion of its design phase. This facility will be
situated on more than 5 acres directly across from the existing Captain Cook Police Sub-station
and will include a 10-lane indoor firing range,training room,American Disabilities Act(ADA)
and Commission on Accreditation for Law Enforcement Agencies (CALEA) compliant holding
cells,and an ADA compliant public meeting room.
The Police Department is currently in the self assessment phase of obtaining law enforcement
accreditation through CALEA. Upon completion of this phase, the Department will need to
request for an on-site assessment from CALEA and then continue with on-going, quality
performance reviews.
Public Works —The Ane Keohokalole Highway or Mid-Level Road is scheduled for completion
in January 2012. The $35 million project is being built with American Reinvestment and
Recovery Act(Stimulus Funds). The project will provide construction jobs and enhance further
development in the immediate areas.
Planning—Action Committees for the Kona,North Kohala and South Kohala are conducting
meetings as an ongoing process to implement the Community Development Plans (CDPs)that
were previously adopted by the Council. The Department will be continuing its public outreach
program for the proposed CDP for the districts of Kau and Hamakua and the Puna CDP Action
Committee has adopted a work plan template for the implementation of prioritized actions in the
CDP.
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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 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 reported as
reservations of fund balances 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.
Cash Management
Cash temporarily idle during the year was invested in savings accounts,money market mutual
funds, certificates of deposit,repurchase agreements, and agency notes. The average yield on
deposits and investments was .89%.
The County's policy is to minimize credit and market risks while maintaining a competitive yield
on its portfolio. Accordingly,with the exception of$177,788 held by a rental management
agent, deposits were either insured by federal depository insurance, collateralized, or secured by
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irrevocable letters of credit. All collateral on deposit was held for safe keeping with a County-
designated agent in the County's name.
Other Information
Independent Audit
The County Charter requires an annual audit by independent certified public accountants.
Accuity LLP was selected in accordance with the County Charter and the procurement
provisions of the Hawaii Revised Statutes (HRS)and Hawaii Administrative Rules (HAR)to
perform the audit.
Employee Union Contracts
County employees are members of eight different bargaining units and all eight bargaining units'
contracts will expire on June 30, 2011.
Certificate of Achievement
The Government Finance Officers Association of the United States and Canada(GFOA)
awarded a Certificate of Achievement for Excellence in Financial Reporting to the County of
Hawaii for its Comprehensive Annual Financial Report for the fiscal year ended June 30,2009.
This was the twenty-second consecutive year that the government has achieved this prestigious
award. In order to be awarded a Certificate of Achievement, a government must publish an
easily readable and efficiently organized comprehensive annual financial report. This report
must satisfy both generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe our current
Comprehensive Annual Financial Report continues to meet the Certificate of Achievement
Program's requirements, and we are submitting it to the GFOA to determine its eligibility for
another certificate.
Acknowledgments
The preparation of this report was made possible by the efficient and dedicated services of the
entire staff of the Department of Finance and fiscal personnel in other departments. I am grateful
for their help in preparing this report. I also thank the Mayor and the members of the County
Council for their interest and support in assuring the continuing sound financial condition of the
County of Hawaii.
NANCY E. CRAWFORID
Director of Finance
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Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
County of Hawaii
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30,2009
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports(CAFRs)achieve the highest
standards in government accounting
and financial reporting.
LU AND
�U�IITEO STiti1ES�
President
Executive Director
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County of Hawaii
Organization Chart
County Electorate
County Council Mayor Prosecuting Attorney
County Legislative Office of Management:
Clerk Auditor Managing Director
Departments and agencies Agencies under Departments under
under direct supervision administrative supervision commissions and
of the Mayor and/or of the Mayor: administrative supervision
Managing Director: of the Mayor:
Corporation Counsel Civil Defense Civil Service
Finance Office of Aging Police
Planning Mass Transportation Liquor Control
Environmental Management Housing&Community Fire
Research&Development Development Water Supply
Public Works (semi-autonomous)
Parks&Recreation
Data Systems
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County of Hawaii
Elected Officials
June 30,2010
Administrative Officers (Term: 2008-2012)
William P. Kenoi Mayor
Jay T. Kimura Prosecuting Attorney
County Council (Term: 2008-2010)
J Yoshimoto Chair
Emily I.Naeole-Beason Vice Chair
Guy Enriques Member
Brenda Ford Member
Kelly Greenwell Member
Pete Hoffman Member
Donald Ikeda Member
Dennis "Fresh"Onishi Member
Dominic Yagong Member
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Principal Officials
June 30,2010
County Clerk Kenneth Goodcnow
Legislative Auditor Colleen Schrandt
Managing Director William Takaba
Deputy Managing Director Walter Lau
Corporation Counsel Lincoln Ashida
Director of Finance Nancy E. Crawford
Planning Director Bobby Jean Lcithcad-Todd
Director of Personnel Ronald Takahashi
Director of Research and Development Randy Kurohara
Chief of Police Harry S. Kubojiri
Fire Chief Darryl Oliveira
Director of Public Works Warren Lee
Director of Environmental Management Lono Tyson
Director of Parks and Recreation Robert Fitzgerald
Manager,Department of Water Supply Milton Pavao
Civil Defense Administrator Quince Mento
Director of Liquor Control Janice A. Pakele
Transit Operations Administrator Thomas Brown
Executive on Aging Alan Parker
Administrator, Office of Housing and
Community Development Stephen Arnett
Director of Data Systems Burt Tsuchiya
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FINANCIAL SECTION
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C U I LLP
CMIFIV.D PUBLIC ACCVUN'IANTS
Report of Independent Auditors
To the Chair and Members of the County Council
County of Hawaii
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 (the"County")as of and for the year ended June 30,
2010,which collectively comprise the County's basic financial statements as listed in the table of
contents. These financial statements are the responsibility of County's management. 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 of
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis for our 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
as of June 30, 2010, and the respective changes in financial position and,where applicable, cash flows
thereof and the budgetary comparison for the general fund for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
As discussed in Note 14 to the financial statements, the net assets of the County of Hawaii, Department
of Water Supply, a component unit of the County, has been restated as of June 30, 2009 for errors
discovered by management of the Department during the current year.
In accordance with Government Auditing Standards,we have also issued our report dated December 30,
2010, 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 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 internal control
over financial reporting or on compliance. That report is an integral part of an audit performed in
accordance with Government Auditing Standards and should be considered in assessing the results
of our audit.
The accompanying management's discussion and analysis on pages 13 through 23 and required
supplementary information on page 86 are not a required part of the basic financial statements but are
supplementary information required by the Governmental Accounting Standards Board. We have applied
certain limited procedures,which consisted principally of inquiries of management regarding the methods
of measurement and presentation of the required supplementary information. However,we did not audit
the information and express no opinion on it.
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Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the County's basic financial statements. The introductory section, combining and individual
nonmajor fund financial statements, and 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 have been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to
the basic financial statements taken 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 express no opinion on them.
&CX- L Lp
Honolulu, Hawaii
December 30, 2010
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MANAGEMENT'S DISCUSSION AND ANALYSIS
This section of the County of Hawaii's(the County)Comprehensive Annual Financial Report
presents a narrative overview and analysis of the financial activities of the County for the fiscal
year ended June 30,2010. 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$551.8 million
(net assets). This amount includes $38.1 million in unrestricted net assets,a decrease of$4.9
million from the prior year.
• The County's total net assets increased by$25.2 million during the fiscal year.
• As of the close of the current fiscal year, the County's governmental funds reported combined
ending fund balances of$172.2 million,a decrease of$71.3 million from the prior year.
Approximately 33 percent of this total amount,$57.6 million,is available for spending at the
County's discretion(unreserved fund balance).
• At the end of the current fiscal year,unreserved fund balance for the general fund was$31.4
million,or 12 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 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 assets presents information on all of the County's assets and liabilities,
with the difference between the two reported as net assets. Over time,increases or decreases in
net assets 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 assets changed
during the most recent fiscal year. All changes in net assets 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,
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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,capital projects
fund and bond redemption 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 statements 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
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are used to report the same functions presented as business-type activities in the government-
wide financial statements. The County uses enterprise funds to account for the operations of
the Kulaimano Elderly Housing Project and the Ouli Ekahi Affordable Housing Project.
Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of
parties outside the County. The private-purpose trusts and the agency funds are reported
under the fiduciary funds. Since the resources of these funds are not available to support the
County's own programs,they are not reflected in the government-wide financial statements.
The accounting used for fiduciary funds is much like that used for proprietary funds.
Notes to the Basic Financial Statements
The notes to the basic financial statements provide additional information that is essential to a full
understanding of the data provided in the government-wide and fund financial statements.
Other Supplementary Information
In addition to the basic financial statements and accompanying notes,this report also presents
supplementary information,including the combining statements referred to earlier in connection
with nonmajor governmental funds and budget comparison statements for the nonmajor special
revenue funds. This supplementary information is presented immediately following the notes to
the basic financial statements.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
Condensed Schedule of Net Assets
June 30,2010 and 2009
Primary Government
Governmental Activities Business-type Activities Total
2010 2009 2010 2009 2010 2009
Assets:
Current and other assets $220,363,931 $287,338,601 $1,067,909 $1,189,499 $221,431,840 $288,528,100
Capital assets,net 757,580,639 661,265,646 1,219,361 1,249,251 758,800,000 662,514,897
Total assets 977,944,570 948,604,247 2,287,270 2,438,750 980,231,840 951,042,997
Liabilities:
Long teen liabilities
outstanding 398,064,998 393,196,221 916,117 944,124 398,981,115 394,140,345
Other liabilities 29,061,094 29,927,036 385,529 395,058 29,446,623 30,322,094
Total liabilities 427,126,092 423,123,257 1,301,646 1,339,182 428,427,738 424,462,439
Net assets:
Invested in capital assets,net
of related debt 469,235,881 419,615,479 303,244 305,127 469,539,125 419,920,606
Restricted 43,958,660 63,408,379 184,914 184,643 44,143,574 63,593,022
Unrestricted 37,623,937 42,457,132 497,466 609,798 38,121,403 43,066,930
Total net assets $550,818,478 $525,480,990 $985,624 $1,099,568 $551,804,102 $526,580,558
- 15 -
Analysis of Net Assets
As noted earlier,net assets may serve over time as a useful indicator of a government's financial
position. In the case of the County,assets exceeded liabilities by$551.8 million at the close of
the most recent fiscal year.
By far the largest portion of the County's net assets(85 percent)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 assets(8 percent)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 all three
categories of net assets,both for the government as a whole,as well as for its separate
governmental and business-type activities.
The County's net assets increased by$25.2 million during the current fiscal year. Although real
property tax revenues decreased approximately$11.2 million,the County was successful in
reducing its expenses by$33 million to meet the anticipated decline in revenues.
The County's current and other assets decreased by$67.1 million during the current fiscal year.
Approximately$74.1 million of the decrease is due to a decrease in cash and investments,which
is offset by a$5.7 million increase in receivables. The decrease in cash and investments is
primarily due to the spending of proceeds from previously issued bonds. The majority of the
increase in receivables is due to an increase in the amount of real property taxes and
intergovernmental grants uncollected at fiscal year end.
The County's net capital assets increased by$96.3 million due to the large amount of capital
improvement projects done by the County during the current fiscal year. See further discussion
of the increase in capital assets on page 21.
The County's long-term liabilities outstanding increased by$4.8 million(1 percent)due primarily
to drawdowns of the State Revolving Fund loans and issuance of Bond Anticipation Notes,which
were offset by the County's required principal payments on debt from the prior year. See further
discussion of the increase in long-term debt outstanding on page 22.
The County's other liabilities decreased by$0.9 million primarily due to increases in accounts
payable and accrued liabilities($4.1 million)offset by decreases in other liabilities($0.2 million)
and unearned revenue($43 million).
- 16 -
Condensed Statement of Activities
For the Fiscal Years Ended June 30,2010 and 2009
Primary Government
Governmental Activities Business-type Activities Total
2010 2009 2010 2009 2010 2009
Revenues:
Program revenues:
Charges for services $ 35,373,972 $ 38,432,997 $ 337,982 $ 371,511 $ 35,711,954 $ 38,804,508
Operating grants and contributions 49,571,173 42,273,795 136,802 135,674 49,707,975 42,409,469
Capital grants and contributions 13,532,669 15,728,186 - - 13,532,669 15,728,186
General revenues:
Property taxes 218,037,567 229,262,980 218,037,567 229,262,980
Othertaxes 26,016,092 29,009,085 26,016,092 29,009,085
Grants and contributions,unrestricted 17,500,038 17,888,019 17,500,038 17,888,019
Investment earnings 2,187,266 8,369,221 1,403 17,861 2,188,669 8,387,082
Miscellaneous 1,779,223 2,749,335 - - 1,779,223 2,749,335
Total revenues 363,998,000 383,713,618 476,187 525,046 364,474,187 384,238,664
Expenses:
General government 65,552,278 69,968,534 - - 65,552,278 69,968,534
Public safety 148,115,428 144,755,837 148,115,428 144,755,837
Highways and streets 38,075,835 36,466,541 38,075,835 36,466,541
Health,education and welfare 30,528,977 33,783,223 590,131 525,449 31,119,108 34,308,672
Culture and recreation 14,739,755 32,633,418 - - 14,739,755 32,633,418
Sanitation 27,527,841 40,191,704 27,527,841 40,191,704
Interest on long-term debt 14,120,398 13,914,969 14,120,398 13,914,969
Total expenses 338,660,512 371,714,226 590,131 525,449 339,250,643 372,239,675
Increase(decrease)in net assets 25,337,488 11,999,392 (113,944) (403) 25,223,544 11,998,989
Net assets at beginning ofyear 525,480,990 513,481,598 1,099,568 1,099,971 526,580,558 514,581,569
Net assets at end of year $550,818,478 $525,480,990 $ 985,624 $ 1,099,568 $551,804,102 $526,580,558
Analysis of Changes in Net Assets
Governmental activities. Governmental activities increased the County's net assets by
$25.3 million or basically all of the total growth in net assets of the County.
Total revenues decreased by$19.7 million(5 percent). The County's property taxes decreased by
$11.2 million(5 percent)during the year. Most of this decrease is attributable to the decrease in
assessed values. Franchise taxes and investment earnings decreased by a combined total of$8.3
million(43 percent). The majority of the decrease($62 million)was in investment earnings,
which was a result of lower interest rates.
Total expenses decreased by$33 million(9 percent). The majority of the decrease was a result of
planned reductions in the categories of culture and recreation($17.9 million)and sanitation
($12.7 million). All departments were instructed to reduce expenditures due to the anticipated
reduction in revenues but certain cost increases were unavoidable due to contractual obligations.
- 17 -
Expenses and Program Revenues—Governmental Activities
Year Ended June 30,2010
160,000,000 —
140,000,000
120,000,000 ■Expenses
100,000,000 ■Program revenues
80,000,000
60,000,000
40,000,000
20,000,000
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�e0 �•�c aJOa �\�0t 500
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Revenue by Source—Governmental Activities
Year Ended June 30,2010
Grants and Investment Miscellaneous, Charges for
contributions not earnings, 1,779,223 services,
restricted to 2,187,266 X35,373,972
specific programs,
17,500,038
Operating grants
and contributions,
Othertaxes, 49,571,173
26,016,092
Capital grants and
contributions,
13,532,669
Property taxes,
218,037,567
- 18 -
The charts above 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(44 percent),
followed by general government(19 percent)and highways and streets(I 1 percent). General
revenues such as property and other taxes are not shown by program,but are effectively used to
support program activities countywide. For governmental activities overall,without regard to
programs, property taxes are the largest single source of funds(60 percent),followed by
operating grants and contributions(14 percent)and charges for services(10 percent).
Business-type activities. Business-type activities decreased the County's net assets by$113,944.
Expenses for health,education and welfare account for all of the$590,131 of expenses. Charges
for services were$337,982,operating grants and contributions were$136,802 and investment
earnings were$1,403. Revenues decreased by$48,859 due to a$32,226 decrease in rental
receipts and a$16,458 decrease in investment earnings. Expenses increased$64,682(12 percent)
due primarily to an increase in repairs and maintenance.
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,unreserved fund balance may
serve as a useful measure of a government's net resources available for spending at the end of the
fiscal year.
As of the end of the current fiscal year,the County's governmental funds reported combined
ending fund balances of$172.2 million,a decrease of$71.3 million in comparison with prior
year. Approximately 33 percent of this total amount($57.6 million)constitutes unreserved fund
balance,which is available for spending at the County's discretion. The remainder of the fund
balance is reserved to indicate that it is not available for new spending because it has already been
committed 1)to liquidate contracts and purchase orders for last fiscal year($81.3 million),2)to
pay debt service($25.4 million),or 3)for a variety of other restricted purposes($7.9 million).
The general fund is the chief operating fund of the County. At the end of the current fiscal year,
unreserved fund balance of the general fund was$31.4 million,while total fund balance
decreased to$39.5 million. As a measure of the general fund's liquidity,it may be useful to
compare both unreserved fund balance and total fund balance to total fund expenditures.
Unreserved fund balance represents 12 percent of total general fund expenditures,while total
fund balance represents 16 percent of that same amount.
The fund balance of the County's general fund decreased by$20 million during the current fiscal
year. Key factors in this decrease are as follows:
• A decrease of$10.3 million(5 percent) in property tax revenue due to declining property
values.
• An increase of$1.1 million(1 percent)in public safety expenditures due primarily to accrual
of invoices totaling$1 million for the Police Department's new contract to improve and
update their mapping data within the geographic information system(GIS)relating to the
E911 system for their Dispatch.
- 19 -
• An increase of$4.1 million(103 percent) in highways and streets expenditures due primarily
to increases in expenditures for mass transit($4 million),which is primarily due to the
purchase of additional buses for the County's fleet using federal grant monies.
• An increase of$4.1 million(23 percent)in Employee's health insurance expenditures due to
the rising cost of healthcare insurance premiums.
The fund balance of the County's capital projects fund decreased by$51.5 million during the
current fiscal year. The decrease is primarily due to the combined total of the fund's main
revenue sources of long-term debt financing($25.8 million),which consists of bond anticipation
notes($19.0 million)and state revolving fund loan proceeds($6.8 million), intergovernmental
revenue($6.4 million),and transfers in($42 million)being less than capital expenditures($88.3
million)for the current fiscal year.
Although the fund balance of the capital projects fund was $69.0 million at the end of the current
fiscal year,the unreserved portion of the fund balance was a negative$3.3 million. This was due
to a change in the prior year in the County's procedures regarding the issuance of bonds,in that
the County defers the issuance of bonds until the funds are actually needed even though the
project will be allotted so that work may begin.
The debt service funds consist of the Bond Redemption Fund and the Interest Fund. These funds
have combined total fund balances of$25.4 million,all of which is reserved for the payment of
debt service. The net increase in the combined fund balances during the current year in the debt
service funds was$2.6 million(11 percent).
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 assets of the Kulaimano Elderly Housing Project(Kulaimano)at the end of the
year amounted to $646,468,and the unrestricted net deficit of the Ouli Ekahi Affordable Housing
Project(Ouli Ekahi)amounted to$149,002. The net assets for Kulaimano decreased by$55,820
and the net assets for Ouli Ekahi decreased by$58,124. 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$14.4 million increase in appropriations,all of which is due to increases in the appropriations
for capital and operating grants and contributions.
Differences between the final budget and the actual (budgetary basis)resulted in$17.9 million
less revenues than expected and$28.1 million less expenditures than appropriated. This is
primarily due to the following factors:
• $2.7 million negative variance in combined licenses and permits and charges for current
services revenues. $1 million of the variance was due to a reduction in building permits
attributable to a decline in the construction industry and$1 million was due to a reduction in
gas and oil charges which correlated to a decline in gas prices.
• $5.6 million negative variance in intergovernmental revenue,including$3.7 million in
federal grants and$1.9 million in state grants.
-20 -
• $8.1 million negative variance in miscellaneous revenues attributable mostly to the County's
decision to not sell a particular piece of real property as planned.
• $25.2 million is due to the increased efforts by each department to control costs during the
budget year due to the tough financial situation facing the County. Amount consists
primarily of variances in the following functions: general government($8.8 million),public
safety($11.7 million),health,education and welfare($1.7 million)and culture and education
($2.2 million).
• $2.2 million is due to lower than anticipated payments needing to be made in pension related
payments. With each department increasing efforts to control costs,overtime was also
closely monitored and the corresponding pension expenditures were not incurred.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital assets. The County's investment in capital assets for its governmental and business-type
activities as of June 30,2010 amounts to$758.8 million(net of accumulated depreciation). This
investment in capital assets includes land,buildings and improvements,equipment, 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 15 percent.
Major capital asset events during the current fiscal year included the following:
• Construction continued on both Phase II of the Hawaii County Building Improvements
Project;construction in progress as of the end of the current fiscal year for both phases had
increased by$6.6 million to reach a total of$23.9 million.
• Construction continued on the Waikoloa Housing Project; construction in progress as of the
end of the current fiscal year had increased by$7.5 million to reach a total of$31.8 million.
• Construction continued on the East Hawaii Regional Sort Station;construction in progress as
of the end of the current fiscal year had increased by$4.1 million to reach a total of$10.6
million.
• Construction continued on the West Hawaii Civic Center; construction in progress as of the
end of the current fiscal year had increased by$23.4 million to reach a total of$34.3 million.
• Construction began on the Pahoa Police Station&Vehicle Registration&Licensing Division
project; construction in progress as of the end of the current fiscal year had reached$4
million.
• Construction began on the Komohana and Kinoole Street Improvement project;construction
in progress as of the end of the current fiscal year had reached$4.7 million.
• In January 2010, the County purchased 151 acres at Kaiholena for$6.5 million using funding
from the Public Access,Open Space and Natural Resources Preservation Fund. These
properties contain some of the most intact historic and cultural sites and traditionally used
accesses to the shoreline used by the public for subsistence fishing and shoreline gathering.
-21 -
Capital Assets
(net of depreciation)
As of June 30,2010 and 2009
Primary Government
Governmental Activities Business-type Activities Total
2010 2009 2010 2009 2010 2009
Land $ 35,517,270 S 28,644,734 $ 753,877 $ 753,877 $ 36,271,147 $ 29,398,611
Infrastructure assets 223,637,430 226,557,289 - - 223,637,430 226,557,289
Ground and site improvements - - 75,089 78,843 75,089 78,843
Buildings and improvements 259,595,193 256,229,424 378,960 403,575 259,974,153 256,632,999
Equipment 54,046,284 49,486,543 11,435 12,956 54,057,719 49,499,499
Construction work in progress 184,784,462 100,347,656 184,784,462 100,347,656
Total $757,580,639 $661,265,646 $1,219,361 $1,249,251 $758,800,000 $662,514,897
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 comprised of bonds of$275.2 million, State Revolving Fund
loans of$30.5 million and general obligation bond anticipation notes of$19.0 million. At the end
of the current fiscal year,the County had total bonded debt outstanding of$275.2 million. This
entire amount was comprised of general obligation bonds which are backed by the full faith and
credit of the County.
The County's total bonded debt decreased by$16.2 million(5 percent)during the current fiscal
year due to the regularly scheduled principal payments.
At the end of the fiscal year, the County maintained an"AA-"rating from Standard&Poor's,but
experienced a recalibration in ratings to an"Aa2"rating from Moody's and an"AA-"rating from
Fitch for general obligation debt.
State statutes limit the amount of general obligation debt the County may issue to 15 percent of
the total assessed value of all county real property as established for tax purposes on the last tax
assessment rolls. The current debt limitation for the County is$4.2 billion,which is in excess of
the County's outstanding general obligation debt. Currently the County's outstanding debt
represents seven percent of our debt limitation.
At the end of the current fiscal year, the County also had notes payable to the U.S.Department of
Agriculture,Farmers Home Administration amounting to$0.9 million.
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 at the end of the current fiscal year is at 10.4
percent,which represents a slight decline from last year's rate at the same time of 11.5
percent.
• The number of visitors to the County for the current fiscal year was 1,234,507,which is
almost stable with the previous year's count of 1,229,268.
-22 -
• The outlook for the County in the construction sector appears better than the overall state
in 2010 as the Big Island witnessed a 36%gain from last year. Construction and
employment on the Big Island will benefit from a new Target and a mega-Safeway store
that is projected to generate approximately 500 new jobs.
• Another upcoming boost to the County's economy is the selection of the Mauna Kea
summit over Chile for the Thirty Meter Telescope by the TMT Observatory Corporation.
It is projected that construction will span over nine years resulting in 300 construction
jobs and 140 full-time permanent jobs.
These factors were considered in preparing the County's budget for the 2011 fiscal year.
At the end of the current fiscal year,unreserved fund balance in the general fund was$31.4
million. The County has appropriated$14.3 million of this amount for spending in the 2011
fiscal year budget.
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.
-23 -
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BASIC FINANCIAL STATEMENTS
COUNTY OF HAWAII
Statement of Net Assets
June 30,2010
Primary Government
Governmental Business-type Component
Activities Activities Total Unit
Assets
Current assets:
Cash and cash equivalents(notes 3 and 14) $ 50,443,987 $ 219,241 $ 50,663,228 $ 13,801,181
Restricted cash and cash equivalents(note 3) 30,453,740 31,536 30,485,276 -
Investments(notes 3 and 14) 6,788,622 600,000 7,388,622 11,245,453
Restricted investments(note 3) 25,700,000 - 25,700,000 -
Receivables,net(note 4) 40,461,570 17,132 40,478,702 7,013,427
Receivable from improvement district
(notes 4 and 10) 96,361 - 96,361 -
Internal balances(note 5) 1,350 (1,350) - -
Inventories 2,007,317 - 2,007,317 1,196,491
Prepaid expenses - 1,572 1,572 401,424
Other 5,044,432 - 5,044,432 -
Total current assets 160,997,379 868,131 161,865,510 33,657,976
Investments(note 3) 23,424,115 - 23,424,115 -
Restricted investments(notes 3 and 14) 32,810,743 - 32,810,743 5,490,658
Restricted cash and cash equivalents(note 3) - 199,778 199,778 -
Receivable from improvement district,excluding
current portion(notes 4 and 10) 3,131,694 - 3,131,694 -
Deferred charges - - - 4,522,232
Capital assets(notes 6, 8 and 14):
Utility plant in service, net - - - 191,052,553
Infrastructure assets,net 223,637,430 - 223,637,430 -
Ground and site improvements,net - 75,089 75,089 -
Buildings and improvements,net 259,595,193 378,960 259,974,153 -
Equipment,net 54,046,284 11,435 54,057,719 -
Construction work in progress 184,784,462 - 184,784,462 55,990,039
Land 35,517,270 753,877 36,271,147 1,714,727
Total capital assets,net 757,580,639 1,219,361 758,800,000 248,757,319
Total noncurrent assets 816,947,191 1,419,139 818,366,330 258,770,209
Total assets 977,944,570 2,287,270 980,231,840 292,428,185
(Continued)
-26-
COUNTY OF HAWAII
Statement of Net Assets
June 30,2010
(Concluded)
Primary Government
Governmental Business-type Component
Activities Activities Total Unit
Liabilities
Current liabilities:
Accounts payable and accrued liabilities $ 14,854,487 $ 380,162 $ 15,234,649 $ 3,924,274
Deferred revenue(note 7) 4,378,054 5,367 4,383,421 -
Interest due on long-term debt 5,996,365 - 5,996,365 1,249,926
Bonds and loans payable,current portion net
(notes 10 and 14) 25,968,622 30,758 25,999,380 4,488,000
Compensated absences,current portion(note 10) 8,316,668 - 8,316,668 1,581,441
Claims and judgments,current portion
(notes 10, 12 and 14) 3,111,767 - 3,111,767 62,412
Capital leases,current portion(notes 8 and 10) 1,537,974 - 1,537,974 -
Landfill costs payable,current portion
(notes 9 and 10) 218,290 - 218,290 -
Customers'deposits - - - 600,167
Other 3,832,188 - 3,832,188 -
Totalcurrentliabilities 68,214,415 416,287 68,630,702 11,906,220
Noncurrent liabilities:
Bonds and loans payable, net
(notes 10 and 14) 301,201,255 885,359 302,086,614 39,226,532
Compensated absences(note 10) 22,151,472 - 22,151,472 1,129,144
Claims and judgments(notes 10, 12 and 14) 12,258,924 - 12,258,924 216,588
Capital leases(notes 8 and 10) 3,014,316 - 3,014,316 -
Landfill costs payable(notes 9 and 10) 20,285,710 - 20,285,710 -
Customers'deposits - - - 14,949,531
Total noncurrent liabilities 358,911,677 885,359 359,797,036 55,521,795
Total liabilities 427,126,092 1,301,646 428,427,738 67,428,015
Net Assets
Invested in capital assets,net of
related debt 469,235,881 303,244 469,539,125 210,533,445
Restricted for:
Capital projects 18,569,487 - 18,569,487 5,490,658
Debt service(note 10) 25,389,173 184,914 25,574,087 -
Unrestricted 37,623,937 497,466 38,121,403 8,976,067
Total net assets $550,818,478 $ 985,624 $551,804,102 $ 225,000,170
See accompanying notes to the basic financial statements.
-27-
COUNTY OF HAWAIT
Statement of Activities
For the Fiscal Year Ended June 30, 2010
Program Revenues
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions
Primary government:
Governmental activities:
General government $ 65,552,278 $ 4,315,849 $ 2,475,968 $ 5,1 12,038
Public safety 148,115,428 4,449,519 19,531,745 867,204
Highways and streets 38,075,835 9,351,219 4,616,583 7,237,621
Health,education and welfare 30,528,977 713,774 21,937,113 299,865
Culture and recreation 14,739,755 1,609,041 119,977 15,941
Sanitation 27,527,841 14,934,570 889,787 -
Interest on long-term debt 14,120,398 - - -
Total governmental activities 338,660,512 35,373,972 49,571,173 13,532,669
Business-type activities:
Health, education and welfare 590,131 337,982 136,802 -
Total primary government $ 339,250,643 $ 35,711,954 $ 49,707,975 $ 13,532,669
Component unit:
Water(note 14) $ 46,955,629 $ 39,692,339 $ - $ 2,911,333
General revenues:
Taxes:
Property taxes, levied for general purposes
Public service company taxes
Public utility franchise taxes
Fuel taxes
Grants and contributions not restricted to specific programs
Investment earnings
Miscellaneous
Total general revenues
Change in net assets
Net assets, beginning of year,as previously reported(note 14)
Prior period adjustments
Net assets,beginning of year,as restated(note 14)
Net assets,end of year
See accompanying notes to the basic financial statements.
-28 -
Net(Expense)Revenue and Changes in Net Assets
Primary Government
Governmental Business-type Component
Activities Activities Total Unit
$ (53,648,423) $ - $ (53,648,423) $ -
(123,266,960) - (123,266,960) -
(16,870,412) - (16,870,412) -
(7,578,225) - (7,578,225) -
(12,994,796) - (12,994,796) -
(11,703,484) - (11,703,484) -
(14,120,398) - (14,120,398) -
(240,182,698) - (240,182,698) -
(115,347) (115,347) -
(240,182,698) (115,347) (240,298,045) -
- - - (4,351,957)
218,037,567 - 218,037,567 -
9,647,055 - 9,647,055 -
8,963,041 - 8,963,041 -
7,405,996 - 7,405,996 -
17,500,038 - 17,500,038 -
2,187,266 1,403 2,188,669 205,012
1,779,223 - 1,779,223 -
265,520,186 1,403 265,521,589 205,012
25,337,488 (113,944) 25,223,544 (4,146,945)
525,480,990 1,099,568 526,580,558 220,238,283
- - - 8,908,832
525,480,990 1,099,568 526,580,558 229,147,115
$ 550,818,478 $ 985,624 $551,804,102 $ 225,000,170
-29 -
COUNTY OF HAWAII
Governmental Funds
Balance Sheet
June 30,2010
Bond Other Total
Capital Redemption Governmental Governmental
General Projects Fund Funds Funds
Assets
Cash and cash equivalents(note 3) $ 13,764,389 $ 36,288,605 $ 2,087,692 $ 28,757,041 $ 80,897,727
Investments(note 3) 17,714,665 36,810,743 21,700,000 12,498,072 88,723,480
Receivables,net(note 4) 15,430,665 676,348 - 2,462,260 18,569,273
Due from other governmental
funds(note 5) 530,095 240,740 - 76,417 847,252
Due from other nongovernmental
funds(note 5) - - - 1,350 1,350
Receivables from other
governments(note 4) 13,956,882 6,568,011 - 1,367,404 21,892,297
Inventories 2,007,317 - - - 2,007,317
Other 484,641 - - 628,410 1,113,051
Total assets $63,888,654 $ 80,584,447 $23,787,692 $ 45,790,954 $214,051,747
Liabilities and Fund Balances
Liabilities:
Accounts payable $ 4,374,384 $ 8,719,603 $ - $ 1,760,500 $ 14,854,487
Due to other governmental
funds(note 5) 52,060 - - 795,192 847,252
Deferred revenue(note 7) 17,045,915 2,750,806 - 2,500,914 22,297,635
Other 2,897,378 89,074 240,000 605,736 3,832,188
Total liabilities 24,369,737 11,559,483 240,000 5,662,342 41,831,562
Fund balances:
Reserved for:
Encumbrances 4,970,096 67,516,787 - 8,850,668 81,337,551
Inventories 2,007,317 - - - 2,007,317
Taxicab investigations 50,445 - - - 50,445
Liquor control 1,060,489 - - - 1,060,489
Unexpended allotments - 4,798,990 - - 4,798,990
Debt service(note 10) - - 23,547,692 1,841,481 25,389,173
Unreserved,reported in:
General fund 31,430,570 - - - 31,430,570
Special revenue funds - - - 29,436,463 29,436,463
Capital projects funds - (3,290,813) - - (3,290,813)
Total fund balances 39,518,917 69,024,964 23,547,692 40,128,612 172,220,185
Total liabilities and fund balances $63,888,654 $ 80,584,447 $23,787,692 $ 45,790,954 $214,051,747
See accompanying notes to the basic financial statements.
-30-
COUNTY OF HAWAII
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets
June 30,2010
Total fund balances-governmental funds $ 172,220,185
Amounts reported for governmental activities in the statement of
net assets 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 35,517,270
Infrastructure assets,net 223,637,430
Buildings and improvements,net 2595595,193
Equipment,net 54,046,284
Construction work in progress 184,784,462
Total capital assets 757,580,639
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) 17,919,581
Excess contributions over Other Postemployment Benefit Obligation(OPEB) 3,931,381
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 (323,941,822)
Interest on long-term debt (5,996,365)
Capital leases (4,552,290)
Compensated absences (30,468,140)
Claims and judgments (15,370,691)
Landfill costs payable (20,504,000)
Total long-term liabilities (400,833,308)
Net assets of governmental activities $ 550,818,478
See accompanying notes to the basic financial statements.
-31 -
COUNTY OF HAWAII
Governmental Funds
Statement of Revenues,Expenditures,and Changes in Fund Balances
For the Fiscal Year Ended June 30,2010
Bond Other Total
Capital Redemption Governmental Governmental
General Projects Fund Funds Funds
Revenues
Property taxes $215,547,937 $ - $ - $ - $215,547,937
Public service company taxes 9,647,055 - - - 9,647,055
Fuel taxes - - - 7,405,996 7,405,996
Public utility franchise taxes - - - 8,963,041 8,963,041
Licenses and permits 5,684,007 - - 9,040,814 14,724,821
Intergovernmental 51,188,604 6,374,426 - 20,050,800 77,613,830
Charges for services 5,280,988 - - 13,628,471 18,909,459
Investment earnings 2,229,819 - - 23,709 2,253,528
Miscellaneous 2,074,772 421,992 - 743,767 3,240,531
Total revenues 291,653,182 6,796,418 - 59,856,598 358,306,198
Expenditures
Current:
General government 40,581,229 - - 4,317 40,585,546
Public safety 102,427,065 - - 6,371,214 108,798,279
Highways and streets 8,186,017 - - 12,035,898 20,221,915
Health,education and welfare 7,045,115 - - 18,474,286 25,519,401
Culture and recreation 16,347,426 - - 918,778 17,266,204
Sanitation 883,199 - - 34,791,277 35,674,476
Pension and retirement
contributions(note 13) 24,439,301 - - 4,069,863 28,509,164
Employees'health insurance 21,651,282 - - 1,921,762 23,573,044
Other postemployment benefits 15,700,000 - - - 15,700,000
Miscellaneous 4,046,556 - - 726,845 4,773,401
Debt service:
Principal 165,156 - 19,144,492 1,410,338 20,719,986
Interest 18,703 - - 14,564,856 14,583,559
Capital outlay 12,322,715 88,330,502 - - 100,653,217
Total expenditures 253,813,764 88,330,502 19,144,492 95,289,434 456,578,192
Excess(deficiency)of revenues
over(under)expenditures 37,839,418 (81,534,084) (19,144,492) (35,432,836) (98,271,994)
(Continued)
- 32 -
COUNTY OF HAWAII
Governmental Funds
Statement of Revenues,Expenditures,and Changes in Fund Balances
For the Fiscal Year Ended June 30,2010
(Concluded)
Bond Other Total
Capital Redemption Governmental Governmental
General Projects Fund Funds Funds
Other Financing Sources(Uses)
Sale of assets $ 9,729 $ - $ - $ - $ 9,729
Increase in capital leases(notes 8 and 10) 156,754 - - 1,791,225 1,947,979
State Revolving Fund loans(note 10) - 6,810,988 - - 6,810,988
Bond Anticipation Notes(note 10) - 19,000,000 - - 19,000,000
Bond Anticipation Notes issuance
costs(note 10) - (18,978) - - (18,978)
Transfers in(note 5) - 4,248,409 21,489,704 35,757,241 61,495,354
Transfers out(note 5) (57,246,945) - - (4,248,409) (61,495,354)
Total other financing sources(uses) (57,080,462) 30,040,419 21,489,704 33,300,057 27,749,718
Net change in fund balances (19,241,044) (51,493,665) 2,345,212 (2,132,779) (70,522,276)
Fund balances at beginning of year 59,578,247 120,518,629 21,202,480 42,261,391 243,560,747
Decrease in reserve for inventories (818,286) - - - (818,286)
Fund balances at end of year $ 39,518,917 $69,024,964 $23,547,692 $40,128,612 $172,220,185
See accompanying notes to the basic financial statements.
- 33 -
COUNTY OF HAWAII
Reconciliation of the Change in Fund Balances of Governmental Funds
to the Statement of Activities
For the Fiscal Year Ended June 30,2010
Net change in fund balances-total governmental funds $ (70,522,276)
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 118,570,203
Dedicated property 2,894,010
Depreciation expense and loss on disposals (25,149,219)
Excess of capital outlay over depreciation expense 96,314,994
Borrowings provide current financial resources to governmental funds;
however,issuing debt increases long-term liabilities in the statement
of net assets. In the current period,proceeds were received from:
General obligation bond anticipation notes (19,000,000)
State Revolving Fund loans (6,810,988)
Capital leases (1,947,979)
Total debt proceeds (27,758,967)
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 assets. In the current year,these amounts consist of:
Bond principal retirement,net of refunding 16,105,983
State Revolving Fund loan repayments 3,038,509
Capital lease payments 1,575,494
Total long-term debt repayment 20,719,986
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. 2,514,659
(Continued)
-34-
COUNTY OF HAWAII
Reconciliation of the Change in Fund Balances of Governmental Funds
to the Statement of Activities
For the Fiscal Year Ended June 30,2010
(Concluded)
Some items reported in the statement of activities do not involve current
financial resources and therefore are not reported as expenditures in
governmental funds. These activities are:
Decrease in inventory $ (818,286)
Increase in Other Postemployment Benefit Obligation(OPEB) 2,359,265
Increase in compensated absences (261,043)
Decrease in claims and judgments 2,307,018
Amortization of premium from bond issuance 280,250
Amortization of deferred amount on refunding of bonds (248,721)
Net decrease in accrued interest 450,609
Net additional expenditures 4,069,092
Change in net assets of governmental activities $ 25,337,488
See accompanying notes to the basic financial statements.
-35 -
COUNTY OF HAWAII
General Fund
Statement of Revenues,Expenditures,and Changes in Fund Balance-
Budget and Actual(Budgetary Basis)
For the Fiscal Year Ended June 30,2010
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
Taxes and assessments:
Property taxes $ 217,150,000 S 217,150,000 $215,547,937 S(1,602,063)
Public service company taxes 8,630,000 8,630,000 9,647,055 1,017,055
Total taxes and assessments 225,780,000 225,780,000 22.5,194,992 (585,008)
Licenses and permits:
Nonbusiness licenses and permits 3,964,389 3,964,389 3,092,443 (871,946)
Business licenses 1,676,281 1,676,281 1,116,480 (559,801)
Street use 1,600,000 1,600,000 1,475,084 (124,916)
Total licenses and permits 7,240,670 7,240,670 5,684,007 (1,556,663)
Intergovernmental:
Federal:
Programs for the aged 2,392,892 2,723,762 1,674,078 (1,049,684)
Community development block grants - 2,998,922 3,007,796 8,874
HOME program grant - 999,573 999,573 -
Law enforcement 2,110,800 2,865,879 1,335,871 (1,530,008)
Other 4,111,095 8,219,986 7,118,022 (1,101,964)
Total federal 8,614,787 17,808,122 14,135,340 (3,672,782)
State:
State General Fund-Act 185,
SLH 1990 17,425,000 17,425,000 17,108,655 (316,345)
Emergency medical services 13,804,556 13,804,556 13,164,764 (639,792)
Other 4,894,348 9,839,803 8,913,275 (926,528)
Total State 36,123,904 41,069,359 39,186,694 (1,882,665)
Total intergovernmental revenue 44,738,691 58,877,481 53,322,034 (5,555,447)
Charges for services:
General government 4,974,416 4,974,416 3,961,867 (1,012,549)
Culture and recreation 988,726 988,726 898,792 (89,934)
Highways and streets 276,000 276,000 343,647 67,647
Public safety 158,878 158,878 76,682 (82,196)
Total charges for services 6,398,020 6,398,020 5,280,988 (1,1 17,032)
Fines and forfeitures 1,675,500 1,675,500 1,089,687 (585,813)
Rents 117,677 117,677 114,550 (3,127)
(Continued)
-36-
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 30,2010
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues(continued):
Interest and penalties $ 2,600,000 $ 2,600,000 $ 2,199,651 $ (400,349)
Miscellaneous 12,525,148 12,732,162 4,597,344 (8,134,818)
Total revenues 301,075,706 315,421,510 297,483,253 (17,938,257)
Expenditures:
Current:
General government:
Finance 12,328,970 12,328,970 10,366,012 1,962,958
General government building 6,467,046 6,467,046 4,279,809 2,187,237
Legislative 3,711,862 3,562,862 3,060,779 502,083
Automotive equipment 5,678,866 5,678,866 3,997,202 1,681,664
Law 2,932,050 2,932,050 2,519,499 412,551
Research and development 2,640,927 3,398,727 3,198,878 199,849
Planning and zoning 3,638,039 3,666,039 3,307,369 358,670
Mayor's office 1,576,662 3,993,753 3,742,824 250,929
Engineering 2,052,011 2,123,311 1,831,339 291,972
Data systems 1,225,045 269,921 142,887 127,034
Personnel services 2,109,154 2,108,048 1,890,873 217,175
Public works administration 1,307,915 1,307,915 1,098,044 209,871
Elections 875,026 877,606 780,130 97,476
Legislative Auditor 776,880 1,000,880 723,806 277,074
Total general government 47,320,453 49,715,994 40,939,451 8,776,543
Public safety:
Police department 52,534,179 58,726,370 53,695,651 5,030,719
Fire department 37,054,571 37,453,596 34,205,258 3,248,338
Prosecuting attorney 9,231,981 8,594,787 6,513,436 2,081,351
Protective inspection 2,410,194 2,410,194 2,074,694 335,500
Liquor control 1,617,581 1,642,581 1,242,585 399,996
Flood control 1,017,502 1,017,502 1,001,085 16,417
Civil defense agency 1,793,842 1,813,842 1,657,130 156,712
Animal control 2,280,269 2,280,269 1,888,179 392,090
Total public safety 107,940,1 19 113,939,141 102,278,018 11,661,123
Highways and streets:
Mass transit 4,820,711 5,876,259 5,155,741 720,518
(Continued)
-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 30,2010
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Expenditures(continued):
Current(continued):
Health,education and welfare:
Elderly activities $ 3,627,799 S 3,734,399 $ 3,168,585 $ 565,814
Office of Aging 2,679,022 2,955,292 1,902,889 1,052,403
Education 58,500 59,606 59,606 -
Social programs 1,500,000 1,500,000 1,500,000 -
Cemeteries 341,462 341,462 265,926 75,536
Physical examination 133,825 133,825 133,825 -
Total health,education and welfare 8,340,608 8,724,584 7,030,831 1,693,753
Culture and recreation:
Community music 381,602 357,602 245,939 111,663
Organized recreation:
Maintenance 7,393,351 7,393,351 6,984,744 408,607
Recreation 2,645,425 2,645,425 2,326,982 318,443
Aquatics 2,418,180 2,428,180 2,267,516 160,664
Hoolulu Park complex 1,000,064 1,000,064 872,078 127,986
Administration 2,271,647 2,271,647 1,612,266 659,381
Children's zoo 692,352 692,352 670,574 21,778
Summer/Tntersession 512,811 512,811 301,447 211,364
Culture and arts 173,158 173,158 166,578 6,580
Elderly activities administration 664,380 656,380 531,406 124,974
Total culture and recreation 18,152,970 18,130,970 1.5,979,530 2,151,440
Sanitation:
Environmental management 1,072,178 1,072,178 883,226 188,952
Pension and retirement contributions 27,267,789 26,467,789 24,215,726 2,252,063
Employees'health insurance 21,016,250 21,816,250 21,651,282 164,968
Other postemployment benefits 15,700,000 15,700,000 15,700,000 -
Miscellaneous 3,759,000 3,724,000 3,207,462 516,538
Total current 255,390,078 265,167,165 237,041,267 28,125,898
(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 30,2010
(Concluded)
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Expenditures(continued):
Capital Outlay:
Community Development Block
grants(HUD) $ $ 3,119,144 $ 3,119,144 $
HOME Program 999,573 999,573
Other 475,000 475,000
Total capital outlay 4,593,717 4,593,717
Total expenditures 255,390,078 269,760,882 241,634,984 28,125,898
Excess of revenues over expenditures 45,685,628 45,660,628 55,848,269 10,187,641
Other financing uses:
Transfers out:
Housing Fund (1,501,860) (1,501,860) (1,501,860) -
Solid Waste Fund (19,147,721) (19,147,721) (19,147,721)
Golf Course Fund (433,418) (433,418) (433,418)
Disaster/Emergency Fund (100,000) (100,000) (100,000) -
Debt Service Fund (40,610,744) (40,610,744) (39,881,025) 729,719
Total transfers out (61,793,743) (61,793,743) (61,064,024) 729,719
Total other financing uses (61,793,743) (61,793,743) (61,064,024) 729,719
Excess(deficiency)of revenues and other
sources over(under)expendinues and other uses (16,108,115) (16,133,115) (5,215,755) 10,917,360
Fund balance at beginning of year 59,578,247 59,578,247 59,578,247 -
Fund balance at end of year $ 43,470,132 $ 43,445,132 $ 54,362,492 $10,917,360
See accompanying notes to the basic financial statements.
-39-
COUNTY OF HAWAH
Proprietary Funds
Statement of Net Assets
June 30,2010
Business-type Activities-
Enterprise Funds
Kulaimano Ouli Ekahi
Elderly Affordable
Housing Housing
Project Project Total
Assets
Current assets:
Cash and cash equivalents(note 3) $ 41,303 $ 177,788 $ 219,091
Restricted cash and cash equivalents(note 3) 12,068 19,468 31,536
Investments(note 3) 600,000 - 600,000
Imprest fund(note 3) 50 100 150
Receivables,net(note 4) 8,231 8,901 17,132
Prepaid expenses 1,572 - 1,572
Total current assets 663,224 206,257 869,481
Noncurrent assets:
Restricted cash and cash equivalents(note 3) 184,914 14,864 199,778
Capital assets(note 6):
Land and site improvements 511,000 503,877 1,014,877
Buildings and equipment 1,234,642 - 1,234,642
Less accumulated depreciation (1,030,158) - (1,030,158)
Total capital assets 715,484 503,877 1,219,361
Total noncurrent assets 900,398 518,741 1,419,139
Total assets 1,563,622 724,998 2,288,620
Liabilities
Current liabilities:
Accounts payable - 342,275 342,275
Internal balances(note 5) 1,350 - 1,350
Due to developer - 7,729 7,729
Security deposits payable from restricted assets 12,068 18,090 30,158
Deferred revenue(note 7) 3,338 2,029 5,367
Notes payable,current portion(note 10) 30,758 - 30,758
Total current liabilities 47,514 370,123 417,637
Noncurrent liabilities:
Notes payable(note 10) 885,359 - 885,359
Total liabilities 932,873 370,123 1,302,996
Net Assets
Invested in capital assets, net of related debt (200,633) 503,877 303,244
Restricted for debt service 184,914 - 184,914
Unrestricted 646,468 (149,002) 497,466
Total net assets $ 630,749 $ 354,875 $ 985,624
See accompanying notes to the basic financial statements.
-40-
COUNTY OF HAWATT
Proprietary Funds
Statement of Revenues,Expenses,and Changes in Fund Net Assets
For the Fiscal Year Ended June 30,2010
Business-type Activities-
Enterprise Funds
Kulaimano Ouli Ekahi
Elderly Affordable
Housing Housing
Project Project Total
Operating revenues:
Rental receipts from tenants $ 108,248 $ 223,994 $ 332,242
Rental subsidy from federal government-HUD 136,802 - 136,802
Laundry receipts 2,650 - 2,650
Miscellaneous - 3,090 3,090
Total operating revenues 247,700 227,084 474,784
Operating expenses:
Utilities 38,862 36,716 75,578
General and administration 99,178 163,499 262,677
Maintenance and repairs 66,912 75,872 142,784
Lease expense - 9,146 9,146
Depreciation(note 6) 34,041 - 34,041
Total operating expenses 238,993 285,233 524,226
Operating income(loss) 8,707 (58,149) (49,442)
Nonoperating revenues(expenses):
Investment income 1,378 25 1,403
Tnterest expense (65,905) - (65,905)
Total nonoperating revenues(expenses) (64,527) 25 (64,502)
Change in net assets (55,820) (58,124) (113,944)
Net assets,beginning of year 686,569 412,999 1,099,568
Net assets,end of year $ 630,749 $ 354,875 $ 985,624
See accompanying notes to the basic financial statements.
-41 -
COUNTY OF HAWAII
Proprietary Funds
Statement of Cash Flows
For the Fiscal Year Ended June 30,2010
Business-type Activities-
Enterprise Funds
Kulaimano Ouli Ekahi
Elderly Affordable
Housing Housing
Project Project Total
Cash Flows from Operating Activities
Receipts from tenants $ 111,291 $ 221,479 $ 332,770
Receipts from federal government-HUD 136,802 - 136,802
Payments to suppliers for goods and services (206,089) (243,366) (449,455)
Net cash provided by(used in)operating activities 42,004 (21,887) 20,117
Cash Flows from Capital and Related Financing Activities
Principal paid on notes payable (28,007) - (28,007)
Interest paid on notes payable (65,905) - (65,905)
Purchase of capital assets (4,151) - (4,151)
Net cash used in capital and related financing activities (98,063) - 98,063)
Cash Flows from Investing Activities
Purchase of investments (1,300,000) - (1,300,000)
Proceeds from maturities of investments 1,400,000 - 1,400,000
Interest on investments 1,400 27 1,427
Net cash provided by investing activities 101,400 27 101,427
Net increase(decrease)in cash and cash equivalents 45,341 (21,860) 23,481
Cash and cash equivalents at beginning of year(including
restricted cash and cash equivalents) 192,994 234,080 427,074
Cash and cash equivalents at end of year(including
restricted cash and cash equivalents) $ 238,335 $ 212,220 $ 450,555
Reconciliation of Operating(Loss)Income to Net Cash
Provided by(Used in)Operating Activities
Operating(loss)income $ 8,707 $ (58,149) $ (49,442)
Adjustments to reconcile operating(loss) income to net cash
provided by(used in)operating activities:
Depreciation expense 34,041 - 34,041
Change in assets and liabilities:
Receivables,net (717) 42,384 41,667
Prepaid expenses (22) - (22)
Accounts and other payables (750) (6,613) (7,363)
Deferred revenue 745 491 1,236
Net cash provided by(used in)operating activities $ 42,004 $ (21,887) $ 20,117
Supplemental disclosure of cash flow information-Interest paid $ 65,905 $ - $ 65,905
See accompanying notes to the basic financial statements.
-42-
COUNTY OF HAWATT
Fiduciary Funds
Statement of Fiduciary Net Assets
June 30,2010
Private-
Purpose Agency
Trusts Funds
Assets
Cash and cash equivalents(note 3) $ 2,878,377 $ 4,958,593
Tnvestments(note 3) 1,770,085 1,323,233
Receivables:
Due from other agency funds - 1,955
Other receivables 170 123,063
Total receivables 170 125,018
Restricted cash and cash equivalents(note 3) - 637,000
Total assets 4,648,632 $ 7,043,844
Liabilities
Due to other agency funds - 1,955
Accrued liabilities - 3,304,506
Advances payable - 242,636
Assets held for the benefit of improvement districts - 3,494,747
Total liabilities - $ 7,043,844
Net Assets
Held in trust for other parties 4,648,632
Total net assets $ 4,648,632
See accompanying notes to the basic tinancial statements.
-43 -
COUNTY OF HAWAIT
Fiduciary Funds
Statement of Changes in Fiduciary Net Assets
For the Fiscal Year Ended June 30,2010
Private-
Purpose
Trusts
Additions
Contributions:
Puna Geothermal Venture $ 50,000
Investment earnings:
Net decrease in fair value of investments (45,475)
Dividends 50,872
Interest 3,235
Total additions 58,632
Deductions
Grant payments 90,373
Total deductions 90,373
Change in net assets (31,741)
Net assets,beginning of year 4,680,373
Net assets,end of year $ 4,648,632
See accompanying notes to the basic financial statements.
-44-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
The accounting policies of the County of Hawaii (the County)conform to U.S.generally
accepted accounting principles(GAAP)as applicable to local governmental units. The following
notes to the basic financial statements are an integral part of the County's Comprehensive Annual
Financial Report.
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). All organizations,activities or-
functions that meet the criteria in GASB Statement No. 14 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 defines component units as legally separate organizations for which
the elected officials of the primary government are financially accountable. "Financial
accountability"is the level of accountability that exists if a primary government appoints a
voting majority of an organization's governing board 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 set-vices 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 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,these basic financial
statements present the County of Hawai`i (the primary government)and its component unit,
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
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
Commission,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 Kekuanaoa 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 assets,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 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.
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.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
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 on a current financial
resource 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 on a different measurement focus and
basis of accounting than the government-wide statements' governmental 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 column of the government-wide presentation.
The County's fiduciary funds are presented in the fund financial statements by type(private
purpose and agency). Since by definition these assets are being held for the benefit of a third
party(private parties,state government,etc.)and cannot by 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 assets and the statement of changes in net assets)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.
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.
Separate financial statements are provided for governmental funds,proprietary funds,and
fiduciary funds,even though the latter-are excluded from the government-wide financial
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
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,liabilities,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,liabilities,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. Tt 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.
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.
The County reports the following major proprietary funds:
Kulaimano 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 30,2010
The County reports the following fiduciary funds:
Private-Purpose Trust Funds—Used to account for funds received from geothermal
developers to mitigate the effects of geothermal energy development. Also used to
account for investment income on funds received from import businesses at the port of
Hilo and the related expenditures to promote health and safety on the Island of Hawaii.
Agency Funds—Used to account for assets held by the County for other governmental
units and individuals. The agency funds are custodial in nature and do not involve
measurement of results of operations. The County has the following agency funds:
• State Weight Tax Fund
• Improvement District No. 17 Fund
• Improvement District No. 18 Fund
• Improvement District Revolving Fund
• Performance and Refundable Deposits Fund
• Payroll Clearance Fund
• Flexible Spending Account
• Lapsed Warrants Fund
• Non-Profit License Plates Fund
• Organ and Tissue Education Fund
• Business Improvement District 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
(within 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 30,2010
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. 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 unearned revenue in its fund financial statements(see Note 7).
Unearned revenues 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 liability for unearned revenue is removed from the
combined balance sheet 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; and(c)principal and interest on general long-term debt which are
recognized as expenditures when due.
When both restricted and unrestricted resources are available for use,generally it is the
County's policy to use restricted resources first,then unrestricted resources as they are
needed.
In accordance with GASB Statement No. 20,Accounting and Financial Reporting for
Proprietary Funds and Other Governmental Entities That Use Proprietary Fund
Accounting, the County applies all applicable GASB pronouncements as well as the
following pronouncements issued on or before November 30, 1989,unless those
pronouncements conflict with or contradict GASB pronouncements;Financial Accounting
Standards Board statements and interpretations,Accounting Principles Board opinions,and
Accounting Research Bulletins of the Committee on Accounting Procedures.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
Encumbrances
The general, special revenue,and capital projects funds follow encumbrance accounting
under which purchase orders,contracts and other commitments are recorded as a reserve 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 reported
as reservations of fund balances and do not constitute expenditures or liabilities because the
commitments will be honored during the subsequent year.
Unexpended Allotments
Allotment accounting is employed in the general and capital projects funds to reserve
appropriations to complete capital projects that were funded during a given fiscal period.
Unexpended allotments represent reserves of capital projects appropriations that are
available to complete such projects in future fiscal periods.
Cash and Investments
Cash and cash equivalents include cash on hand,amounts in demand deposits and short-term
investments with a maturity date of three months or less from the date acquired by the
County.
Investments consist of time certificates of deposit at financial institutions and bank
repurchase agreements with original maturities exceeding three months. Included are
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 amortized
cost(see Note 3). 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 I%per month and penalties of up to 10%of the amount due.
Assessments are based on 100%of estimated fair market values prior to the application of
exemptions or preferential assessments.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
Inventories
Inventories consist of materials and supplies and are reported as expenditures at the time of
purchase(purchase method). Police and fire department inventories are stated using the first
in,first out(FTFO)method. Other inventories are stated at average cost.
Liquor Control
Section 281 of the Hawaii Revised Statutes requires that liquor license revenues collected
be used only for costs and expenses directly relating to operational and administrative costs
actually incurred by the liquor commission collecting such fees. The unexpended fees at
June 30,2010 of$1,060,489 are reflected as a reserve 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 estimated fair market
value at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or
materially extend the life of the asset are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed.
Interest incurred during the construction phase of capital assets of business-type activities is
included as part of the capitalized value of the assets constructed.
Capital assets of the primary government and enterprise fund are depreciated using the
straight-line method over the following estimated useful lives of the assets:
Assets Years
Infrastructure 20 to 100 years
Buildings and improvements 50 to 100 years
Ground and site improvements 20 to 50 years
Equipment 5 to 40 years
Long-term Obligations
The County reports long-term debt of governmental funds at face value on the government-
wide statement of net assets. Certain other governmental fund obligations not expected to be
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
financed with current available resources are also reported on the government-wide
statement of net assets. 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 assets 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 30,2010 totaled$63,868,000 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 market value at the inception of the lease and
the related present value of the future minimum lease obligations is recorded as long-term
debt. Operating lease expenditures and expenses are recognized when the lease obligation is
paid.
Retirement Plan Contributions
The County's contribution to the Employees'Retirement System of the State of Hawaii
includes the normal cost plus the level annual payment required to amortize the unfunded
actuarial accrued liability. The County's policy is to fund its required contribution annually
(see Note 13).
- 53 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
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 conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of assets
and liabilities,as well as disclosure of contingent assets and liabilities at the date of the
financial statements,and the reported amounts of revenues,expenditures,and other
financing sources and uses during the reporting period. Actual results could differ from
those estimates.
New Accounting Pronouncements
In March 2009,the GASB issued Statement No. 54,Fund Balance Reporting and
Governmental Fund Type Definitions. This Statement establishes fund balance
classifications that comprise a hierarchy based primarily on the extent to which a
government is bound to observe constraints imposed upon the use of the resources reported
in governmental funds. The requirements in this Statement will improve financial reporting
by providing fund balance categories and classifications that will be more easily understood.
The provisions of this Statement are effective for the County for periods beginning after
June 15,2010. The County has not yet determined the effect this Statement will have on its
financial statements.
In December 2009,the GASB issued Statement No. 57, OPEB Measurements by Agent
Employers and Agent Multiple-Employer Plans, which clarifies that when actuarially
determined other postemployment benefits("OPEB")measures are reported by an agent
multiple-employer OPEB plan and its participating employers, those measures should be
determined as of a common date and at a minimum frequency to satisfy the agent multiple-
employer OPEB plan's financial reporting requirements. These provisions are effective for
years beginning after June 15,2011. The County has not yet determined the effect this
Statement will have on its financial statements.
- 54-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
2. STEWARDSHIP,COMPLIANCE AND ACCOUNTABILITY
Annual Budget
The County follows these procedures in establishing its operating and capital budgets:
• On or before March 1,the Mayor submits to the County Council proposed operating
and capital projects budgets for the fiscal year commencing the following July 1. The
operating budget includes proposed expenditures for the general fund and special
revenue funds,and the means of financing them. A project-length budget is submitted
to the County Council for the capital projects fund.
• The Mayor submits to the County Council amendments to the proposed operating and
capital budgets within ten working days after the close of the state legislature, but not
later than May 5.
• The County Council conducts public hearings on the proposed operating and capital
budgets after March 1 but prior to the first reading on the budget bills,which must be
after May 5.
• On or before June 30,the County Council adopts the budgets. The legal level of
budgetary control is the department level because the Mayor can transfer funds from
any unencumbered appropriation to another within a department or agency without
County Council approval. During the year,the budget may be amended by action of
the County Council,except for appropriations required by law and appropriations for
debt service,which may not be decreased or deleted. Supplemental appropriations were
made during the 2009-2010 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$14.4 million in the
general fund and$6.7 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 Revolving Fund,
Beautification Fund,Housing Agency Fund and Park Dedication Fund.
• Appropriations for the operating budget lapse at the end of the fiscal year to the extent
that they have not been expended or encumbered. Appropriations for capital
expenditures that are not encumbered lapse at the end of two fiscal years following the
fiscal year that the appropriation was made.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
• Formal budgetary integration is employed as a management control device during the
year for the general fund, special revenue funds,and capital projects fund. Formal
budgetary integration is not employed for debt service funds because effective
budgetary control is alternatively achieved through general obligation bond indenture
provisions.
• The accompanying statement of revenues,expenditures and changes in fund balances—
budget and actual (budgetary basis)for the general fund presents a comparison of the
legally adopted budget with actual data on a budgetary basis. Accounting principles
applied for purposes of developing data on a budgetary basis differ significantly from
those used to present financial statements in conformity with GAAP. On the budgetary
basis,intergovernmental revenues are recognized when awarded by the granting
agency,encumbrances and unexpended allotments are treated as expenditures,accounts
payable are not accrued,and all leases are treated as operating leases. In preparing the
financial statements on a GAAP basis,accounts payable are accrued and treated as a
reduction of encumbrances for balance sheet presentation.
Budget to GAAP Reconciliation
The following is a summary of the adjustments necessary to convert fund balances of the
County's general fund from a GAAP basis to a budgetary basis at June 30,2010:
Ending fund balance—GAAP basis $39,518,917
Encumbrance adjustments:
Beginning encumbrances and unexpended allotments 10,831,607
Ending encumbrances and unexpended allotments (4,970,096)
Other adjustments 8,982,064
Ending fund balance—Non-GAAP budgetary basis $54,362,492
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. 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.
- 56 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
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,time certificate of deposit,and money market accounts. Cash and short-term
investments also include repurchase agreements 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 30,2010 was$126,323,811 for the primary government and
$9,797,203 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$150,007,690 at June 30,2010. Of that amount, $149,829,902
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$177,788
represent deposits held by a management agent and were uncoil ateral i zed. 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
accounts,time certificates of deposit,and repurchase agreements,the County requires,in
accordance with State statutes,that the depository banks pledge collateral based on the
available bank balances to limit its exposure to custodial credit risk. 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(all rated AAA),
repurchase agreements and certificates of deposit,while the fiduciary fund also holds equity
securities.
- 57 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
The County's investments and maturities at June 30,2010 are as follows:
Maturi (in years)
Fair Value Less than 1 1 —5
Investments—Primary Government:
Certificates of deposit $ 19,314,350 $ 7,388,622 $11,925,728
Repurchase agreements 25,700,000 25,700,000 --
Government sponsored securities 44,309,130 -- 44,309,130
89.323.480 S 33.088.622 $56,234,858
Investments—Fiduciary Funds:
Certificates ofdeposit $ 1,323,233 $ -- $1,323,233
Government sponsored securities 1,000,000 -- 1,000,000
2.323233 $
Equity securities 770,085
Interest Rate Risk-: As a means of limiting its exposure to fair value losses arising from
rising interest rates,the County's investment policy generally limits maturities on
investments to not more than five years from the date of investment.
Credit Risk.- The County's investment policy limits investments in state and U.S. Treasury
securities,time certificates of deposit,U.S. government or agency obligations,repurchase
agreements,commercial paper,bankers' acceptances,and money market funds,or other
securities maintaining a Triple-A rating.
Custodial Risk: For an investment,custodial risk is the risk that, in the event of failure of
the counterparty,the County will not be able to recover the value of its investments or
collateral securities that are in the possession of an outside party. The County's investments
are held by its fiscal agent and are registered in the County's name. The securities held by
the fiduciary fund are held by the County. In addition,the County requires the institutions to
set aside in safekeeping,certain types of securities to collateralize repurchase agreements.
Concentration of Credit Risk: The County's investment policy contains no limitations on
the amount that can be invested in any one issuer beyond that stipulated by the Hawaii
Revised Statutes.
- 58 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
Restricted Cash and Cash Equivalents and Investments
Cash and cash equivalents and investments classified as restricted assets at June 30,2010
consisted of the following:
Primary government $89,195,797
Fiduciary funds 637,000
89.832.797
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$63,262,789 at June 30,2010.
Cash and investments in the Bond Redemption and Interest Fund are restricted to debt
service related payments and amounted to$25,701,694.
Tenant security deposits received by the County for the Kulaimano Elderly Housing
Project and the Ouli Ekahi Affordable Housing Project are recorded as restricted assets.
Such funds amounted to$12,068 and$19,468,respectively,at June 30,2010.
Restricted amounts set aside by the Kulaimano Elderly Housing Project under its loan
agreement with the Farmers Home Administration totaled$184,914 at June 30,2010.
This amount is restricted for debt service,or for other purposes with prior approval from
the Farmers Home Administration. An operating reserve fund was established by the
Ouli Ekahi Affordable Housing Project pursuant to an agreement with the developer of
the project. This restricted reserve amounted to $14,864 at June 30,2010.
The Improvement District No. 17 Fund has restricted$637,000 as a bond reserve at June
30, 2010 to comply with the requirements of its Kaloko Subdivision bond issuance.
- 59 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
4. RECEIVABLES
Receivables as of June 30,2010,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:
Capital Other
General Projects Governmental
Fund Fund Funds Total
Real property taxes $15,430,665 $ -- $ -- $15,430,665
Accounts receivable:
Sewer -- -- 2,075,588 2,075,588
Solid waste -- -- 2,186,817 2,186,817
Capital projects -- 676,348 -- 676,348
Intergovernmental 13,956,882 6,568,011 1,367,404 21,892,297
Gross receivables 29,387,547 7,244,359 5,629,809 42,261,715
Less: allowance for
uncollectibles -- -- 1800145) (1,800,145)
Net total receivables 29.387.547 $7,244,359 3 829 664 40.461.570
During fiscal year 2005,the County issued$3,887,493 in general obligation bonds on behalf
of improvement District No. 18, an agency fund. At June 30, 2010,the outstanding balance
of$3,228,055 is reflected in the government-wide statement of net assets as a receivable(see
Note 10).
Business-type activities:
Enterprise
Funds
Accounts receivable:
Rent $60,324
Other 2,608
Gross receivables 62,932
Less: allowance for
uncollectibles 45,800
Net total receivables 17 132
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
5. INTERFUND RECEIVABLES AND PAYABLES
interfund receivables and payables consist of the following at June 30, 2010:
Receivable Fund Payable Fund Amount
General fund Other governmental funds $ 530,095
Capital projects fund Other governmental funds 240,740
Other governmental funds General fund 52,060
Other governmental funds 24,357
76,417
Total 847 252
Other governmental funds Enterprise funds 1 350
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 30,2010 consisted of the following:
Transfers out:
Other
General Governmental
Fund Funds Total
Transfers in:
Capital projects fund $ -- $4,248,409 $ 4,248,409
Bond redemption fund 21,489,704 -- 21,489,704
Other governmental funds 35,757,241 -- 35,757,241
57.246.945 4 248 409 61.495.354
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.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
6. CAPITAL ASSETS
Capital asset activity for the year ended June 30,2010 for the County was as follows:
Balance Balance
July 1, Retirements/ June 30,
2009 Additions Transfers 2010
Governmental activities:
Capital assets not being depreciated:
Land $ 28,644,734 $ 6,872,536 $ -- $ 35,517,270
Construction work in
progress 100,347,656 98,215,273 (13,778,467) 184,784,462
Total capital assets not
being depreciated 128,992,390 105,087,809 (13,778,467) 220,301,732
Capital assets being depreciated:
Buildings and
improvements 312,583,850 7,354,371 -- 319,938,221
Equipment 103,598,559 11,791,794 (1,470,156) 113,920,197
Infrastructure 368,055,294 11,008,705 379,063,999
Total capital assets
being depreciated 784,237,703 30,154,870 (1,470,156) 812,922,417
Less accumulated depreciation for:
Buildings and
improvements (56,354,426) (3,988,602) -- (60,343,028)
Equipment (54,112,016) (7,143,847) 1,381,950 (59,873,913)
Infrastructure (141,498,005) (13,928,564) -- (155,426,569)
Total accumulated
depreciation (251,964,447) (25,061,013) 1,381,950 (275,643,510)
Total capital assets
being depreciated,
net 532,273,256 5,093,857 (88,206) 537,278,907
Governmental
activities capital
assets,net $661,265,646 $110,181,666 ($13.866.673) $757,580,639
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
Balance Balance
July 1, Retirements/ June 30,
2009 Additions Transfers 2010
Business-type activities:
Capital assets not being depreciated:
Land $ 753,877 $ $ $ 753,877
Capital assets being depreciated:
Buildings and
improvements 1,136,008 -- -- 1,136,008
Ground and site
improvements 261,000 -- -- 261,000
Equipment 97,935 4,151 (3,452) 98,634
Total capital assets
being depreciated 1,494,943 4,151 (3,452) 1,495,642
Less accumulated depreciation for:
Buildings and
improvements (732,433) (24,615) -- (757,048)
Ground and site
improvements (182,157) (3,754) -- (185,911)
Equipment (84,979) (5,672) 3,452 (87,199)
Total accumulated
depreciation (999,569) (34 041 3,452 (1,030,158)
Total capital assets
being depreciated,
net 495,374 (29,8901 -- 465,484
Business-type
activities capital
assets,net 1 249 251 29 890 $ -- 1 219 361
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
Depreciation expense was charged to functions/programs of the primary government as
follows:
Governmental activities:
General government $ 2,139,984
Public safety 2,510,974
Highways and streets 15,091,748
Sanitation 3,604,842
Health,education and welfare 377,953
Culture and recreation 1,335,512
Total depreciation expense—governmental activities 25.061.013
Business-type activities:
Kulaimano Elderly Housing Project $34,041
7. DEFERRED REVENUE
Deferred revenue consists of the following at June 30,2010
Governmental activities:
Capital Other Total
General Projects Governmental Governmental
Fund Fund Funds Funds
Real property taxes $ 15,974,675 $ -- $ -- $ 15,974,675
Liquor control revenue 170,270 -- -- 170,270
Sewer revenue -- -- 1,070,415 1,070,415
Housing revenue -- -- 26,656 26,656
Solid waste revenue -- -- 1,403,843 1,403,843
Intergovernmental 900,970 2,750,806 -- 3,651,776
Total presented in
fund financial
statements 17,045,915 2,750,806 2,500,914 22,297,635
Less adjustments for
accrual of revenues (15,430,665) -- (2,488,916) (17,919,5811
Total government-
wide financial
statements $ 1,615,250 2 750 806 11.998 4.378.054
Business-type activities:
Enterprise
Funds
Unearned rental income 5 367
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
8. LEASES
The County leases machinery and equipment under noncancellable leases expiring at various
dates through May 2015. 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$15,420,273 and$6,436,951,
respectively,and the related present value of the remaining obligations under the capital
leases amounting to $4,552,290 at June 30,2010 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 May 2022. Expenditures for such operating leases were
$2,812,849 for the fiscal year ended June 30, 2010.
The future minimum payments under capital and operating leases at June 30,2010 are as
follows:
Capital Operating
Leases Leases
Year Ending June 30:
2011 $1,652,996 $2,415,634
2012 1,492,292 1,415,208
2013 823,197 1,381,684
2014 525,035 835,634
2015 286,885 770,827
2016-2020 -- 2,267,013
2021 -2022 35,772
Total minimum lease payments 4,780,405 9 121 772
Less amount representing
interest (228,1 15)
Obligations under capital leases 4 552 290
9. SOLID WASTE LANDFILL CLOSURE AND POSTCLOSURE CARE COSTS
Hilo Landfill The County owns and operates a landfill located in the city of Hilo. State and
federal laws require the County to place covers on certain landfill sites and to monitor and
maintain the sites for thirty years after the facility is closed. Although the closure and
postclosure care costs will be paid near and after the date that the landfill stops accepting
waste,the County recognizes a portion of the closure and postclosure care costs in each
operating period. The liability for these costs is included in the government-wide statement
of net assets. The amount recognized each year is based on the landfill capacity used as of
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
the balance sheet date. At June 30,2010,the County recognized a liability of$12,682,000,
based on the use of 83%of the estimated capacity of the landfill. During the fiscal year
ended June 30,2010,there were no expenditures incurred for the closure of the landfill. The
remaining$2,463,000 in estimated cost of closure and postclosure care will be recognized as
the remaining estimated capacity is used. The estimated remaining useful life of the landfill
is approximately five years. These amounts are based on what it would cost to perform the
required closure and postclosure care in 2010. Actual costs at that time may be higher due
to inflation,changes in technology,or changes in regulations.
The percentage of estimated capacity used as of June 30,2010 reflects revised estimates
regarding the landfills total capacity from previous years. Historically, landfill capacity
estimates were based on volumes going into the landfill which did not account for
decomposition, settlement and corrosion.
The County's permit to operate the landfill expired October 9, 1998. The County filed for
an extension which was approved by the state until permitted capacity is reached. In
accordance with state statute,the County is allowed to continue operations provided that the
County acts consistently with the permit previously granted and the extension application,
plans, specifications and all other information contained therein.
Kealakehe In October 1993,the County closed its Kealakehe landfill in Kona. 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 postelosure is$15,250,000,based on what
it would cost to perform the required closure and postclosure care in 2010. Actual costs may
be higher due to inflation,changes in technology,or changes in regulations. Through
June 30,2010, $7,428,000 was spent on closure and postclosure care of the landfill. The
remaining estimated liability of$7,822,000 is included in the government-wide statement of
net assets. During the year ended June 30,2010, $333,000 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 2010,the County has provided for financial resources
that will be available to provide for closure,postclosure care and remediation or containment
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
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.
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,
2010:
Bonds Issue Bond Balance Bond Balance Due Within
Authorized Amount July 1,2009 Issues Retirements June 30,2010 One Year
1993 Ref&PI $86,770,000 $21,950,000 $ ($ 5,045,000) $16,905,000 $ 5,330,000
2001 Series A 23,000,000 1,379,348 (675,000) 704,348 704,348
2003 Series A 36,310,000 31,895,000 (1,550,000) 30,345,000 1,610,000
2004 Series A 30,000,000 27,705,000 (1,200,000) 26,505,000 1,235,000
2004 Ref Series B 19,545,000 14,545,000 (1,810,000) 12,735,000 1,890,000
2004 Ref Series C 5,050,140 3,200,728 (493,484) 2,707,244 507,320
2004 PT Series A 2,776,400 2,359,281 (39,444) 2,319,837 41,317
2004 PI Series B 920,000 881,631 (13,924) 867,707 14,534
2004 PI Series C 191,093 79,842 (39,331) 40,511 40,511
2006 Series A 25,000,000 23,445,000 (837,500) 22,607,500 882,500
2007 Series A 85,000,000 82,315,000 (2,790,000) 79,525,000 2,905,000
2007 Series B 20,820,000 20,820,000 (1,705,000) 19,115,000 1,790,000
2007 Series C 10,787,388 10,787,388 10,787,388
2008 Series A 50,000,000 50,000,000 50.000.000 1.665.000
396,170,021 291,363,218 (16,198,683) 275,164,535 18,615,530
Add unatnortized
premium 5,605,017 4,498,181 (280,250) 4,217,931 280,251
Less deferred aniount
on refunding (2,828,759) (1,931,077) 248.721 (1,682,356) 248.722)
$398,946,279 $293,930,322 $ $162302121 $277,700,110 $18,647,059
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
General obligation bonds payable reported on the government-wide statement of net assets at
June 30,2010 are comprised of the following individual issues:
Public improvement(PI)and/or refunding bonds:
1993 Refunding and PI at 2.5%to 5.6%,due through 2013 $ 16,905,000
2001 Series A at 4.0%to 5.125°/x,due through 2010 704,348
2003 Series A at 2.0%to 5.125°/x,due through 2023 30,345,000
2004 Series A at 3.0%to 5.25%,due through 2024 26,505,000
2004 Refunding Series B at 3.5%to 5.0°/x,due through 2015 12,735,000
2004 Refunding Series C at 2.0%to 3.7°/x,due through 2014 2,707,244
2004 PI Series A at 4.75°/x,due through 2037 2,319,837
2004 PT Series B at 4.375%,due through 2039 867,707
2004 PT Series C at 3.0%,due through 2010 40,511
2006 Series A at 4.0%to 5.0°/x,due through 2026 22,607,500
2007 Series A at 4.0%to 5.0°/x,due through 2027 79,525,000
2007 Series B at 3.75%to 5.0°/x,due through 2018 19,115,000
2007 Series C at 4.0%to 5.0%,due through 2021 10,787,388
2008 Series A at 4.0%to 6.0%,due through 2028 50,000,000
Total general obligation bonds payable $275,164,535
Annual debt service requirements to maturity for the above general obligation bonds are as
follows:
Governmental Activities
Fiscal year ending June 30: Principal Interest
2011 $ 18,615,530 $ 12,828,432
2012 19,492,789 11,887,703
2013 20,401,566 10,968,542
2014 15,115,470 9,980,949
2015 15,812,380 9,262,180
2016-2020 74,583,309 35,341,826
2021 —2025 72,500,172 17,994,124
2026—2030 37,236,429 3,450,849
2031 —2035 761,423 240,866
2036—2040 645,467 56,235
Total $275,164,535 112.011.706
Bond Premiums
At June 30,2010,total unamortized bond premiums were$4,217,931,which are being
amortized over the remaining life of the respective bond issues.
- 68 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
Bonds Authorized and Unissued
The County Council has authorized the issuance of$209.6 million in general obligation
bonds to finance specified capital improvement projects. At June 30,2010,$119.6 million
was not yet issued.
Subsequent Events
On July 28,2010, the County issued a total of$60,000,000 in general obligation bonds
(2010 Series A)and taxable general obligation bonds(2010 Series B). The interest rates on
the 2010 Series A and B range from 4.0%to 5.0%and from 3.335%to 5.308%,respectively.
The bonds are due through 2030. The bonds were authorized as noted above.
General Obligation Bond Anticipation Notes
On February 25,2010 and June 3,2010,the County issued general obligation bond
anticipation notes(BAN)in the total amount of$15,000,000 and$4,000,000 respectively.
These notes were issued to provide funds for the acquisition and construction of major
capital facilities and bear interest at 1.10%and 1.18%. The notes were paid with funds
received from the issuance of general obligation bonds in August 2010 and therefore,the
$19,000,000 of debt is reflected as noncurrent liabilities.
The following is a summary of general obligation bond anticipation note transactions
reported in the government-wide statement of net assets for the County for the fiscal year
ended June 30, 2010:
Issue Balance Balance
Authorized Amount July l,2009 Tssues Retirements June 30,2010
2010 Series A $ 5,000,000 $ -- $ 5,000,000 $ $ 5,000,000
2010 Series A 10,000,000 10,000,000 10,000,000
2010 Series A 4,000,000 4,000,000 4,000,000
$19,000,000 $ $19,000,000 $ 519,000,000
- 69 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
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, 2010:
Loans Approved Loan Balance Loan Balance Due Within
Authorized Amount July 1,2009 Additions Retirements June 30,2010 One Year
Hilo WWTP $12,724,311 $3,107,502 $ (S 748,342) $2,359,160 S 767,051
Waiakea Mill 1,300,000 390,499 (74,292) 316,207 76,148
Waiakea
Houselots 459,321 112,632 (27,124) 85,508 27,802
Waiakea
Houselots 11 5,024,266 2,971,413 (263,830) 2,707,583 270,761
Ainako A&B 2,239,174 719,922 (124,898) 595,024 127,484
Kalanianaolc 1,499,944 607,058 (86,089) 520,969 88,709
Kalanianaole RH 1,615,980 1,342,663 (72,619) 1,270,044 74,351
Alii Drive A&B 3,210,243 1,001,253 (188,963) 812,290 194,254
Alii Drive C&D 3,780,000 1,431,489 (208,197) 1,223,292 212,507
Alit Drive E&F 2,112,654 942,060 (122,530) 819,530 126,258
Waiaha Bay 3,697,893 1,460,433 (207,921) 1,252,512 213,742
Kealakehe 1,300,071 389,788 (74,156) 315,632 76,010
Holualoa Bay 3,080,000 1,417,585 (171,082) 1,246,503 176,287
PaukaaCCS 2,143,448 1,239,934 (111,182) 1,128,752 113,844
Cesspool
Conversion 8,908,035 7,655,930 (420,046) 7,235,884 421,789
Pahoehoe 2,817,760 1,907,127 (137,238) 1,769,889 140,843
Komohana Hts
LCC-ARRA 1,085,800 997,091 997,091 997,091
Honokaa LCC-
ARRA 5,332,346 2,133,074 2,133,074 2,133,074
Queen
Liliuokalani
LCC-ARRA 1,019,929 1,019,929 1,019,929 1,019,929
Queen
Liliuokalani 10,186,277 2,660,894 2,660,894 63,629
$73,537,452 $26,697,288 &_ O9 8 8 ($3.038.5091 $30,469,767 V321,563
The loans bear interest at 0.50%to 3.02°/x, 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 2030. Those loans with the"ARRA"designation
are interest free with principal forgiveness upon the County's fulfillment of certain
conditions.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
Debt service to maturity for disbursements to date on these projects are as follows:
Governmental Activities
Fiscal year ending June 30: Principal Interest
2011 $ 7,321,563 $ 745,142
2012 3,309,768 674,530
2013 3,383,891 588,181
2014 2,605,686 431,161
2015 2,205,752 336,628
2016-2020 6,698,776 685,566
2021 —2025 3,553,204 155,505
2026—2030 1,391,127 19,821
Total $3,636,534, ,
Other General Long-Term Obligations
The following is a summary of other general long-term obligations transactions for the fiscal
year ended June 30,2010:
Balance Deductions Balance Due Within
July 1,2009 Additions and Payments June 30,2010 One Year
Governmental activities:
Compensated absences $30,207,097 $11,185,544 ($10,924,501) $30,468,140 $8,316,668
Claims and judgments
(see Note 12) 17,677,709 1,637,767 (3,944,785) 15,370,691 3,111,767
Capital leases
(see Note 8) 4,179,805 1,947,979 (1,575,494) 4,552,290 1,537,974
Landfill costs payable
(see Note 9) 20,504,000 333,000 (333,000) 20,504,000 218,290
Total $72,568,61 I 15.1 04.290 (�1 6.777.7801 70.895.121 1 3.184.699
Fund Balances-Debt Service Funds
The fund balance in the debt service funds at June 30,2010 includes$23,547,692,which is
available for principal payments on general obligation bonds and$1,841,481,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
$916,117 at June 30,2010. 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
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
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, 2010:
Balance at July 1, 2009 $944,124
Deductions (28,007)
Balance at June 30,2010 916,117
Less current portion (30,758)
Note payable,net of
current portion $ 885,359
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
2011 $ 30,758 $ 63,154
2012 32,982 60,930
2013 35,366 58,546
2014 37,923 55,989
2015 40,664 53,248
2016-2020 251,901 217,659
2021 —2025 357,102 112,458
2026—2027 129,421 7,058
Total 916 117 629 042
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°/x.
Total special assessment bonds payable were$1,715,000 at June 30,2010. 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 County acts as an agent for the property owners within the improvement
districts to collect assessments receivable,forward payments to bond-paying agents at
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
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 30,2010:
Balance at July 1,2009 $ 2,485,000
Deductions (770,000)
Balance at June 30,2010 1.715.000
The following is a summary of the annual maturities for the special assessment bonds:
Fiscal year ending June 30: Principal Interest
2011 $ 825,000 $ 96,059
2012 890,000 32,819
Total 1 715 000 128 878
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$3,228,055 at June 30,2010.
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,for the fiscal year ended June 30,2010:
Balance at July 1,2009 $3,320,754
Deductions (92,699)
Balance at June 30,2010 S3,228,055
- 73 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
The following is a summary of the annual maturities for the improvement district general
obligation bonds:
Fiscal year ending June 30: Principal Interest
2011 $ 96,361 $ 147,463
2012 58,449 144,196
2013 61,168 141,414
2014 64,015 138,501
2015 66,993 135,453
2016-2020 384,737 626,335
2021 —2025 483,013 525,769
2026—2030 606,428 399,476
2031 —2035 761,424 240,867
2036—2040 645,467 56,233
Total 3 228 055 2 555 707
11. COMMITMENTS AND CONTINGENCIES
Contractual commitments— Contractual commitments for capital projects,expenses,and
supplies at June 30,2010, 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 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 assets(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 affect on the financial
condition of the County.
ADA compliance—The County has entered into two stipulated agreements(or Consent
Decrees)approved by the federal district court judges 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
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
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. As of May 21,2008,there were
approximately 204 curb ramps(which included at least 151 of the 161 curb ramps that were
required by the amended transition plan) installed in Hilo,Waikoloa and Kona at a total cost
of close to$4.8 million. The County will be seeking closure of this matter with the federal
district 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 would have been spent over the 12-year period. Funding
allocated initially for facilities repairs was$17.5 million,with another$4 million of federal
funding anticipated through community development block grants over the next 2 years.
Since 2000,the Department of Parks and Recreation has requested$2 to$3 million a year
for the different park facilities' ADA projects. Recently,the Department of Public Works
has requested an additional $2 million a year for the other County ADA facilities'project.
Because of the substantial hardships predominantly incurred in the funding and cost aspects
of the implementation of the Original Transition Plan, the learning curve process, and the
timing and scheduling of the different stages of work for each project, the parties have been
working on a plan to ensure implementation of a Transition Plan with the assistance of a
federal district 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 at
least$50,000 to handle requests for reasonable accommodations for County departments;
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
and the procedures for these requests have been finalized and are available on The County's
ADA web page.
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,aviation liability for helicopter operations,automobile coverage on transit buses
and County Police fleet vehicles,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 has not exceeded the insurance coverage. The County is substantially self-insured
for the majority of its vehicles as well as for all other perils including workers'compensation
and general liability. The liability for claims and judgements is reported on the government-
wide statement of net assets 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 assets. At June 30,2010,the
amount of this liability was$15,370,691. This is the County's best estimate based on
available information. Changes in the reported liability since June 30,2008 are given below.
General Workers' Total
Liability Compensation Liability
Balance at July 1, 2008 $ 8,257,472 $ 11,230,939 $19,488,411
Incurred claims(including TBNR)* 1,346,633 2,581,469 3,928,102
Claim payments (3,157,335) (2,581,4691 (5,738,804)
Balance at June 30, 2009 $ 6,446,770 $ 11,230,939 $17,677,709
Incurred claims(including IBNR)* (1,015,017) 2,652,784 1,637,767
Claim payments (1,292,001) (2,652,784) (3,944,785)
Balance at June 30,2010 S 4,139,752 S 11.230.939 $15,370,691
*Net of new claims liability and old claims resolved at less than previous estimate.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
13. EMPLOYEE BENEFIT PLANS
Pension Plan
Plan description All eligible employees of the County are required by Chapter 88 of the
Hawaii Revised Statutes(HRS)to become members of the Employees' Retirement System
of the State of Hawaii (the ERS),a cost-sharing multiple-employer defined benefit pension
plan. The ERS provides retirement, survivor,and disability benefits with multiple benefit
structures known as the contributory,hybrid,and noncontributory plans. All contributions,
benefits,and eligibility requirements are established by Chapter 88,HRS,and can be
amended by legislative action.
The ERS 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.
Employees covered by Social Security on June 30, 1984 were given the option of joining the
noncontributory plan or remaining in the contributory plan. All new employees hired after
June 30, 1984 and before July 1,2006,who are covered by Social Security,were generally
required to join the noncontributory plan. Qualified employees in the contributory and
noncontributory plan were given the option of joining the hybrid plan effective July 1,2006,
or remaining in their existing plan. Starting July 1,2006,all new employees covered by
Social Security are required to join the hybrid plan.
The three plans provide a monthly retirement allowance equal to the benefit multiplier
percentage(1.25%or 2.00%)multiplied by the average final compensation (AFC)multiplied
by years of credited service. 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,if the employee
became a member prior to January 1, 1971. The AFC for members hired on or after this date
is based on the three highest paid years of service,excluding the payment of salary in lieu of
vacation.
For postrctirement increases,every retiree's original retirement allowance is increased by
2.5%on 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%the third year,etc.).
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
The following summarizes the three plan provisions relevant to the general employees of the
respective plan:
Contributory Plan General employees in the contributory plan are required to
contribute 7.8%of their salary and are fully vested for benefits upon receiving 5 years
of credited service. The County may also make contributions for these members.
Under the contributory plan,employees may retire with full benefits at age 55 and 5
years of credited service,or may retire early at any age with at least 25 years of credited
service and reduced benefits. The benefit multiplier is 2.0%for employees covered by
Social Security.
Police officers,fire fighters and certain other members that are not covered by Social
Security contribute 12.2%of their salary and receive a retirement benefit using the
benefit multiplier of 2.5%for qualified service,up to a maximum of 80%of AFC.
These members may retire at age 55 with 10 years of credited service or at any age with
25 years of credited service,provided the last 5 years of credited service is in any of the
qualified occupations.
Hybrid Plan General employees in the hybrid plan are required to contribute 6.0%of
their salary and are fully vested for benefits upon receiving 5 years of credited service.
The County may also make contributions for these members. Employees may retire
with full benefits at age 62 and 5 years of credited service or at age 55 and 30 years of
credited service,or may retire at age 55 and 20 years of credited service with reduced
benefits. The benefit multiplier used to calculate retirement benefits is 2.0%.
Noncontributory Plan General employees in the noncontributory plan are fully vested
upon receiving 10 years of credited service. The County is required to make all
contributions for these members. Employees may retire with full benefits at age 62 and
10 years of credited service or age 55 and 30 years of credited service or age 55 and 20
years of credited service with reduced benefits. The benefit multiplier used to calculate
retirement benefits is 1.25°/x.
The ERS funding policy provides for periodic employer contributions at actuarially
determined rates,expressed as a percentage of annual covered payroll,such that the
employer contributions,along with employee contributions and an actuarially determined
rate of investment return,are adequate to accumulate sufficient assets to pay benefits when
due. The funding method used to calculate the total employer contribution required is the
entry age normal actuarial cost method. 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. Employers contribute 19.70%for police
officers and fire fighters,and 15.00%for all other employees. Employer rates are set by
statute based on the recommendation of the ERS actuary resulting from an experience study
conducted every five years.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
The required pension contributions by the County for the years ended June 30,2010,2009,
and 2008 were$22,127,289, $22,334,894 and$18,222,311,respectively,which equal the
required contributions for each year. Measurement of assets and actuarial valuations are
made for the ERS as a whole and are not separately computed for individual participating
employers such as the County.
The ERS issues a Comprehensive Annual Financial Report(CAFR)that includes financial
statements and required supplementary information,which may be obtained by writing to the
Employees' Retirement System of the State of Hawaii,201 Merchant Street, Suite 1400,
Honolulu,Hawaii 96813.
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. The EUTF was established on July 1, 2003 to design,
provide,and administer medical,prescription drug,dental,vision,chiropractic,dual-
coverage medical and prescription drug,and group life benefits.
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.
For employees hired after June 30, 1996, and who retire with fewer than 10 years of service,
the County makes no contributions. For those retiring with at least 10 years but fewer than
15 years of service,the County pays 50%of the retired employees'monthly Medicare or
non-Medicare premium. For employees hired after June 30, 1996,and who retire with at
least 15 years but fewer than 25 years of service,the County pays 75%of the retired
employees' monthly Medicare or non-Medicare premium. For those retiring with over 25
years of service, the County pays the entire healthcare premium.
For employees hired after June 30,2001, and who retire with fewer than 10 years of service,
the County makes no contributions. For those retiring with at least 10 years but fewer than
15 years of service,the County pays 50%of the retired employees'monthly Medicare or
non-Medicare premium based on the self-plan. For employees hired after June 30,2001,and
who retire with at least 15 years but fewer than 25 years of service,the County pays 75%of
the retired employees'monthly Medicare or non-Medicare premium; for those retiring with
over 25 years of service,the County pays the entire healthcare premium.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
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.
The County's annual other postemployment benefit(OPEB)cost is calculated based on the
annual required contribution(ARC)of the employer,which is an amount actuarially
determined in accordance with the parameters of Governmental Accounting Standards Board
Statement No.45,Accounting and Financial Reporting by Employers f6r Postemployment
Benefits Other than Pensions(GASB Statement No.45). GASB Statement No.45 addresses
the failure of previous financial reporting practices to measure and recognize the cost of
OPEB during the periods when employees render the services or to provide relevant
information about OPEB obligations and the extent to which progress is being made in
funding those obligations. The ARC represents a level of funding that, if paid on an ongoing
basis,is projected to cover normal cost each year and amortize any unfunded actuarial
liabilities(or funding excess)over a period not to exceed thirty(30)years. The current ARC
rate is 18.8%of annual covered payroll.
The following section shows the County's Annual OPEB cost for the year ended June 30,
2010,the amount actually contributed to the plan,and changes in the net OPEB asset:
Annual required contribution $25,046,000
Interest on net OPEB obligation (63,000)
Adjustment to annual required contribution 840,000
Annual OPEB Cost 25,823,000
Contributions made 28,182,265
Increase in net OPEB asset (2,359,265)
Net OPEB asset-beginning of year (1,572,116)
Net OPEB asset-end of year $(3,931,381)
The annual OPEB cost,the percentage of annual OPEB cost contributed to the plan,and the
net OPEB asset for the year ended June 30,2010 and the preceding years were as follows:
Percentage of Annual
Fiscal Year OPEB Cost Net OPEB
Ended Annual OPEB Cost Contributed Asset
June 30,2008 $23,426,000 100.3% ($78,313)
June 30,2009 $23,426,000 102.9% ($1,572,116)
June 30, 2010 $25,823,000 109.1% ($3,931,381)
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
The schedule of funding progress based on the actuarial valuation date of July 1, 2009, is as
follows:
Actuarial accrued liability $439,225,000
Actuarial value of plan assets 28,814,000
Unfunded actuarial accrued liability(UAAL) $410,411,000
Funded ratio 7%
Covered payroll(active plan members) $133,555,000
UAAL as a percentage of covered payroll 307%
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts
and assumptions about the probability of occurrence of events far into the future. Examples
include assumptions about future employment,mortality,and the healthcare cost trend.
Amounts determined regarding the funded status of the plan and the annual required
contributions of the employer are subject to continual revision as actual results are compared
with past expectations and new estimates are made about the future.
Projections of benefits for financial reporting purposes are based on the substantive plan(the
plan as understood by the employer and plan members)and include the types of benefits
provided at the time of each valuation and the historical pattern of sharing of benefit costs
between the employer and plan members to that point. The actuarial methods and
assumptions used include techniques that are designed to reduce short-term volatility in
actuarial accrued liabilities and the actuarial value of assets,consistent with the long-term
perspective of the calculations.
In the July 1, 2009 actuarial valuation,the entry age normal cost actuarial cost method was
used. The actuarial assumptions included a 7.0%discount rate,which is based on the
County's anticipated funding level,and an annual healthcare cost trend rate of 10.5%
initially,reduced by decrements to an ultimate rate of 5.0%after nine years. The
assumptions also include a 3.5%increase in payroll. The UAAL is being amortized as a
level percentage of projected payroll on an open basis. The remaining amortization period at
July 1,2009 for the UAAL balance varies depending on the date each portion was
established but is set to not exceed 30 years.
The EUTF issues a publicly available financial report that includes financial statements and
required supplementary information,which is available on-line at their web-site
www.eutf.hawaii.gov or by contacting them at P.O. Box 2121,Honolulu,HI 96805-2121.
Deferred Compensation Plan
County employees are permitted to participate in a deferred compensation plan of the State
of Hawaii,adopted pursuant to Internal Revenue Code(IRC)section 457. The plan permits
eligible employees to defer a portion of their salary until future years by contributing to a
- 81 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
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 30,2010,cash,time certificates of deposit and money market funds of$30,537,292,
with bank balances of$32,597,948 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
restricted as to use and are recorded as a restricted asset. Such funds amounted to
$5,490,658 at June 30,2010. At June 30,2010,the Department's investment portfolio
consists primarily of certificates of deposit.
Capital Assets
The Department began operations as of January 1, 1950. At that date,the utility plant in
service was transferred to the Department from the County at the cost of the utility plant
assets acquired by the County for its water system from January 1, 1924 to
December 31, 1949,less accumulated depreciation.Acquisitions prior to 1924 and
acquisitions by gift or grant prior to 1950 are not included in utility plant. Additions to
utility plant since January 1, 1950 are stated at original cost and include contributions by
governmental agencies,private subdividers and customers at their cost or estimated cost.
Construction costs include amounts for contract work, engineering supervision and other
direct and indirect costs. Construction period interest is capitalized on utility plan
constructed with tax-exempt debt.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
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 20 years
Water systems 10 to 40 years
The capital assets of the Department at June 30,2010 were as follows:
Utility plant in service $346,223,076
Less: accumulated depreciation (155,170,523)
191,052,553
Land and rights 1,714,727
Construction in progress 55,990,039
Net capital assets 248,757,319
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 $31,730,311
at June 30, 2010.
General obligation bonds payable issued on behalf of the Department and other long-term
debt at June 30,2010 are comprised of the following:
Public improvement bonds:
1993 Series A at 2.5%to 5.6%,due through 2013 $2,375,000
2001 Series A at 4.0%to 5.125°/x,due through 2010 375,652
2004 Series D at 4.5%,due through 2039 244,791
2006 Series A at 4.0%to 5.0%,due through 2026 22,607,500
2008 Series A at 4.125°/x,due through 2043 147,000
Total public improvement bonds 25,749,943
Public improvement refunding bonds:
2004 Series at 2.0%to 5.25°/x,due through 2015 227,756
2007 Series at 4.0%to 5.0°/x,due through 2021 5,752,612
Total public improvement refunding bonds 5,980,368
Revolving fund loans:
State revolving fund loan,interest at 0.41%to 1.37%,
due through 2027 10,278,382
- 83 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
American Recovery and Reinvestment Act State revolving
fund loan,interest free,with total principal forgiveness
upon fulfillment of conditions 1,705,839
Total revolving fund loans 11,984,221
Total 43.714.532
At June 30,2010, future principal payments for long-term debt are scheduled as follows:
Fiscal year ending June 30:
2011 $ 4,488,000
2012 2,923,000
2013 3,039,000
2014 2,280,000
2015 2,358,000
2016-2020 12,793,000
2021 —2025 11,323,000
2026—2030 4,309,000
2031 —2035 79,000
2036—2040 98,000
Thereafter 24,532
Total 43.714.532
Contributions in Aid of Construction
The Department recognized$2,911,333 of contributions in aid of construction as
nonoperating revenues for the fiscal year ended June 30,2010.
Commitments and Contingent Liabilities
Claims and judgments—The Department is self-insured for workers' compensation and
other perils. The liability at June 30,2010 for workers' compensation claims of$279,000
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$37,653,000 at
June 30,2010.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2010
Post-Retirement Benefits
Effective July 1,2007,the Department adopted the provisions of GASB Statement No.45.
This statement addresses how state and local governments should account for and report
their costs and obligations related to postemployment benefits,healthcare,and other
nonpension benefits. The Department's annual required contribution for its postemployment
benefit obligation for the year ended June 30,2010 was$1,607,000 with interest and
adjustments of$8,000 and$99,000, respectively. The Department made contributions of
$1,964,000 during the year ended June 30, 2010 and recorded a postemployment benefit
asset of$250,000 at June 30,2010.
Restatement
The Department's net assets were restated as of June 30,2009 to correct$8,908,832 in errors
in accounting for revenues in the proper period,project costs that should have been
expensed,costs that should have been accrued,and over-depreciation of capital assets.
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COUNTY OF HAWAII
Required Supplementary Information
June 30,2010
Schedule of Funding Progress for the EUTF
(In thousands)
Actuarial
Accrued UAAL as a
Actuarial Liability Unfunded Percentage
Actuarial Value of (AAL)— AAL Funded Covered of Covered
Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll
Date (a) (b) (b-a) (alb) (c) ((b-a)/c)
July 1,2007 - $275,828 $275,828 - $127,420 216.5%
July 1, 2009 $28,814 $439,225 $410,411 6.6% $133,555 307.3%
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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 set-vices.
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.
BIKEW4YFUND-Used to accumulate moneys for the construction of bikeways within the County.
Financing is provided by bicycle license fees.
WORKFORCE INVEST_IIENT 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 REVOLVING FU\'D-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.
BEAUT1F1C4TIONFUND-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 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 General Fund.
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COUNTY OF HAWAII
Nonmajor Governmental Funds
Combining Balance Sheet
June 30,2010
Special Revenue Funds
Solid Parking
Highway Sewer Waste Cemetery Meter
Fund Fund Fund Fund Fund
Assets
Cash and cash equivalents $ 3,218,581 $ 3,385,127 $ 8,470,859 $ 76,659 $157,033
Investments 8,000,000 3,000,000 - - -
Imprest fund - 400 250 - -
Receivables:
Due from other governments - - 976,918 - -
Due from other governmental funds - 9,578 - - -
Due from other nongovernmental funds - 1,350 - - -
Trade,net of allowance for doubtful accounts - 1,070,415 1,391,845 - -
Other - - 388,165 - -
- 1,081,343 2,756,928 - -
Total assets $11,218,581 $ 7,466,870 $11,228,037 $ 76,659 $157,033
Liabilities and Fund Balances
Liabilities:
Accounts payable $ 390,626 $ 134,306 $ 1,062,331 $ - $ -
Due to other governmental funds 275,485 3,307 21,496 - -
Unearned revenue - 1,070,415 1,403,843 - -
Accrued liabilities 17 313,386 40 - -
Total liabilities 666,128 1,521,414 2,487,710 - -
Fund balances:
Reserved for:
Encumbrances 2,183,291 714,939 2,333,865 - -
Debt service - - - - -
Unreserved 8,369,162 5,230,517 6,406,462 76,659 157,033
Total fund balances 10,552,453 5,945,456 8,740,327 76,659 157,033
Total liabilities and fund balances $11,218,581 $ 7,466,870 $11,228,037 $76,659 $157,033
- 88 -
Special Revenue Funds
Vehicle Workforce Golf Geothermal Reloc. Beauti- Park
Disposal Bikeway Investment Course &commu»uy tication Housing Dedication
Fund Fund Act Fund Fund Benefits Fund Fund Agency Fund
$2,081,909 $466,699 $ - $ 167,560 $ 2,979,383 $ 1,044,519 $ 4,705,185 $ 86,675
- - - - - - 1,498,072 -
- - - 2,000 - - 200 -
- - 390,486 - - - - -
- - - - - - 66,839 -
- 110 38,994 3,678 39,209 - 158,250 4
- 110 429,480 3,678 39,209 - 225,089 4
$2,081,909 $466,809 $ 429,480 $ 173,238 $ 3,018,592 $ 1,044,519 $ 6,428,546 $ 86,679
$ 2,347 $ - $ - $ 2,567 $ - $ 6,582 $ 161,741 $ -
- - 429,480 3,307 - - 62,117 -
- - - - - - 26,656 -
- 4,400 - - - - 215,372 -
2,347 4,400 429,480 5,874 - 6,582 465,886 -
564,102 27,903 - - - 22,213 3,004,355 -
1,515,460 434,506 - 167,364 3,018,592 1,015,724 2,958,305 86,679
2,079,562 462,409 - 167,364 3,018,592 1,037,937 5,962,660 86,679
$2,081,909 $466,809 $ 429,480 $ 173,238 $ 3,018,592 $ 1,044,519 $ 6,428,546 $ 86,679
(Continued)
- 89-
COUNTY OF HAWAII
Nonmajor Governmental Funds
Combining Balance Sheet
June 30,2010
(Concluded)
Debt Service Fund Total
Nonmajor
Interest Governmental
Fund Funds
Assets
Cash and cash equivalents $1,914,002 $ 28,754,191
Investments - 12,498,072
Imprest fund - 2,850
Receivables:
Due from other governments - 1,367,404
Due from other governmental funds - 76,417
Due from other nongovernmental funds - 1,350
Trade,net of allowance for doubtful accounts - 2,462,260
Other - 628,410
- 4,535,841
Total assets $1,914,002 $ 45,790,954
Liabilities and Fund Balances
Liabilities:
Accounts payable $ - $ 1,760,500
Due to other governmental funds - 795,192
Deferred revenue - 2,500,914
Accrued liabilities 72,521 605,736
Total liabilities 72,521 5,662,342
Fund balances:
Reserved for:
Encumbrances - 8,850,668
Debt service 1,841,481 1,841,481
Unreserved - 29,436,463
Total fund balances 1,841,481 40,128,612
Total liabilities and fund balances $1,914,002 $ 45,790,954
See accompanying independent auditors'report.
- 90-
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-91 -
COUNTY OF HAWATT
Nonmajor Governmental Funds
Combining Statement of Revenues,Expenditures,and Changes in Fund Balances
For the Fiscal Year Ended June 30,2010
Special Revenue Funds
Solid Parking
Highway Sewer Waste Cemetery Meter
Fund Fund Fund Fund Fund
Revenues
Fuel taxes $ 7,405,996 -
Public utility franchise taxes 8,963,041 - - - -
Licenses and permits 6,813,888 - - - -
Intergovernmental 535,356 - 889,787 - -
Charges for services - 6,070,432 6,831,982 - 15,003
Tnvestment earnings - - - - -
Miscellaneous 460,659 1,485 1,329 8,250 -
Total revenues 24,178,940 6,071,917 7,723,098 8,250 15,003
Expenditures
Current:
General government - - - - -
Public safety 6,371,214 - - - -
Highways and streets 11,500,767 - - - -
Health,education and welfare - - - - -
Culture and recreation - - - - -
Sanitation - 6,176,037 25,958,931 - -
Pension and retirement contributions 1,810,421 560,407 1,007,792 - -
Employees'health insurance 839,876 238,496 563,012 - -
Miscellaneous 261,843 243,851 214,402 - -
Debt service:
Principal - - 1,408,447 - -
Interest - - 115,555 - -
Total expenditures 20,784,121 7,218,791 29,268,139 - -
Excess(deficiency)of revenues
over(under)expenditures 3,394,819 (1,146,874) (21,545,041) 8,250 15,003
Other Financing Sources(Uses)
Tncrease in capital leases - - 1,791,225 - -
Transfers in - - 19,147,721 - -
Transfers out (3,198,409) - - - -
Total other financing sources(uses) (3,198,409) - 20,938,946 - -
Net change in fund balances 196,410 (1,146,874) (606,095) 8,250 15,003
Fund balances at beginning of year 10,356,043 7,092,330 9,346,422 68,409 142,030
Fund balances at end of year $ 10,552,453 $ 5,945,456 $ 8,740,327 $ 76,659 $157,033
-92 -
Special Revenue Funds
Vehicle Workforce Golf Gthn,mai R,10 Beauti- Park
Disposal Bikeway Investment Course &community fication Housing Dedication
Fund Fund Act Fund Fund Benefit;Fund Fund Agency Fund
1,983,988 77,604 - - - 165,334 - -
- - 3,344,662 - - - 15,280,995 -
926 - - 710,128 - - - -
- - - - - - 23,631 78
- - - 43 192,780 - 79,221 -
1,984,914 77,604 3,344,662 710,171 192,780 165,334 15,383,847 78
- - - - 4,317 - - -
- 86,608 - - 380,000 68,523 - -
- - 3,344,662 - - - 15,129,624 -
- - - 833,336 67,046 18,396 - -
2,656,309 - - - - - - -
22,637 - - 149,222 - - 519,384 -
15,533 - - 69,021 - - 195,824 -
- - - 6,749 - - - -
- - - - - - 1,891 -
- - - - - - 77 -
2,694,479 86,608 3,344,662 1,058,328 451,363 86,919 15,846,800 -
(709,565) (9,004) - (348,157) (258,583) 78,415 (462,953) 78
- - - 433,418 - - 1,501,860 -
- - - - (1,050,000) - - -
- - - 433,418 (1,050,000) - 1,501,860 -
(709,565) (9,004) - 85,261 (1,308,583) 78,415 1,038,907 78
2,789,127 471,413 - 82,103 4,327,175 959,522 4,923,753 86,601
$2,079,562 $ 462,409 $ - $ 167,364 $ 3,018,592 $1,037,937 $ 5,962,660 $ 86,679
(Continued)
-93 -
COUNTY OF HAWAII
Nonmajor Governmental Funds
Combining Statement of Revenues,Expenditures,and Changes in Fund Balances
For the Fiscal Year Ended June 30,2010
(Concluded)
Debt Service Fund Total
Nonmajor
Interest Governmental
Fund Funds
Revenues
Fuel taxes $ - $ 7,405,996
Public utility franchise taxes - 8,963,041
Licenses and permits - 9,040,814
Intergovernmental - 20,050,800
Charges for services - 13,628,471
Investment earnings - 23,709
Miscellaneous - 743,767
Total revenues - 59,856,598
Expenditures
Current:
General government - 4,317
Public safety - 6,371,214
Highways and streets - 12,035,898
Health,education and welfare - 18,474,286
Culture and recreation - 918,778
Sanitation - 34,791,277
Pension and retirement contributions - 4,069,863
Employees'health insurance - 1,921,762
Miscellaneous - 726,845
Debt service:
Principal - 1,410,338
Interest 14,449,224 14,564,856
Total expenditures 14,449,224 95,289,434
Excess(deficiency)of revenues
over(under)expenditures (14,449,224) (35,432,836)
Other Financing Sources(Uses)
Increase in capital leases - 1,791,225
Transfers in 14,674,242 35,757,241
Transfers out - (4,248,409)
Total other financing sources(uses) 14,674,242 33,300,057
Net change in fund balances 225,018 (2,132,779)
Fund balances at beginning of year 1,616,463 42,261,391
Fund balances at end of year $ 1,841,481 $40,128,612
See accompanying independent auditors report.
-94-
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 30,2010
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
Taxes:
Fuel taxes $ 8,021,000 $8,021,000 $ 7,405,996 $ (615,004)
Public utility franchise taxes 9,216,000 9,216,000 8,963,041 (252,959)
Total taxes 17,237,000 17,237,000 16,369,037 (867,963)
Licenses and permits-motor vehicle weight taxes 7,303,385 7,303,385 6,813,888 (489,497)
Intergovernmental 431,654 431,654 535,356 103,702
Charges for services 438,908 438,908 371,133 (67,775)
Miscellaneous 180,177 180,177 89,526 (90,651)
Total revenues 25,591,124 25,591,124 24,178,940 (1,412,184)
Expenditures:
Public safety-traffic engineering 6,630,907 6,630,907 5,919,579 711,328
Highways and streets 11,843,002 11,843,002 9,229,311 2,613,691
Highways and streets-mass transit 11055,982 1,055,982 1,055,982 -
Pensionandretirementcontributions 2,113,000 2,113,000 1,810,421 302,579
Employees'health insurance 810,000 839,876 839,876 -
Miscellaneous 1,606,200 1,576,324 254,542 1,321,782
Total expenditures 24,059,091 24,059,091 19,109,711 4,949,380
Excess of revenues over expenditures 1,532,033 1,532,033 5,069,229 3,537,196
Other financing uses:
Transfers out-Capital Projects Fund (3,540,000) (3,540,000) (3,198,409) 341,591
Excess(deficiency)of revenues over(under)
expenditures and other uses (2,007,967) (2,007,967) 1,870,820 3,878,787
Fund balance at beginning of year 10,356,043 10,356,043 10,356,043 -
Fund balance at end of year $ 8,348,076 $8,348,076 $ 12,226,863 $ 3,878,787
See accompanying independent auditors'report.
-95 -
COUNTY OF HAWATT
Sewer Fund
Schedule of Revenues,Expenditures,and Changes in Fund Balance-
Budget and Actual(Budgetary Basis)
For the Fiscal Year Ended June 30,2010
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
Charges for services-sewer fees $ 6,890,000 $ 6,890,000 $ 6,070,432 $ (819,568)
Miscellaneous 200 200 1,485 1,285
Total revenues 6,890,200 6,890,200 6,071,917 (818,283)
Expenditures:
Sanitation 7,554,564 7,464,564 5,657,977 1,806,587
Pension and retirement contributions 657,070 653,070 560,407 92,663
Employees'health insurance 234,563 238,563 238,496 67
Miscellaneous 1,549,165 1,639,165 (333,159) 1,972,324
Total expenditures 9,995,362 9,995,362 6,123,721 3,871,641
Deficiency of revenues under expenditures (3,105,162) (3,105,162) (51,804) 3,053,358
Fund balance at beginning of year 7,092,330 7,092,330 7,092,330 -
Fund balance at end of year $ 3,987,168 $ 3,987,168 $ 7,040,526 $ 3,053,358
See accompanying independent auditors report.
-96-
COUNTY OF HAWATT
Solid Waste Fund
Schedule of Revenues,Expenditures,and Changes in Fund Balance-
Budget and Actual(Budgetary Basis)
For the Fiscal Year Ended June 30,2010
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
Intergovernmental $ 1,110,498 $ 1,118,831 $ 726,198 $ (392,633)
Charges for services-tipping fees 10,894,238 10,894,238 6,831,982 (4,062,256)
Miscellaneous - - 1,329 1,329
Total revenues 12,004,736 12,013,069 7,559,509 (4,453,560)
Expenditures:
Sanitation 29,099,390 29,107,723 22,616,823 6,490,900
Pension and retirement contributions 1,255,941 1,255,941 1,007,792 248,149
Employees'health insurance 577,126 577,126 563,012 14,114
Miscellaneous 220,000 220,000 213,425 6,575
Total expenditures 31,152,457 31,160,790 24,401,052 6,759,738
Deficiency of revenues under expenditures (19,147,721) (19,147,721) (16,841,543) 2,306,178
Other financing sources:
Transfers in-General Fund 19,147,721 19,147,721 19,147,721 -
Excess of revenues and other
sources over expenditures - - 2,306,178 2,306,178
Fund balance at beginning of year 9,346,422 9,346,422 9,346,422 -
Fund balance at end of year $9,346,422 $9,346,422 $11,652,600 $2,306,178
See accompanying notes to the basic financial statements.
-97-
COUNTY OF HAWATT
Cemetery Fund
Schedule of Revenues,Expenditures,and Changes in Fund Balance-
Budget and Actual(Budgetary Basis)
For the Fiscal Year Ended June 30,2010
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues-miscellaneous-sale of cemetery plots $ 10,000 $ 10,000 $ 8,250 $ (1,750)
Expenditures-health,education and welfare 10,000 10,000 - 10,000
Excess of revenues over expenditures - - 8,250 8,250
Fund balance at beginning of year 68,409 68,409 68,409 -
Fund balance at end of year $ 68,409 $ 68,409 $ 76,659 $ 8,250
See accompanying independent auditors'report.
-98 -
COUNTY OF HAWATT
Parking Meter Fund
Schedule of Revenues,Expenditures,and Changes in Fund Balance-
Budget and Actual(Budgetary Basis)
For the Fiscal Year Ended June 30,2010
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues-Charges for services-highways and streets $ - $ - $ 15,003 $ 15,003
Excess of revenues over expenditures - - 15,003 15,003
Fund balance at beginning of year 142,030 142,030 142,030 -
Fund balance at end of year $ 142,030 $ 142,030 $ 157,033 $ 15,003
See accompanying independent auditors'report.
-99-
COUNTY OF HAWATT
Vehicle Disposal Fund
Schedule of Revenues,Expenditures,and Changes in Fund Balance-
Budget and Actual(Budgetary Basis)
For the Fiscal Year Ended June 30,2010
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
Licenses and permits-vehicle disposal fee $2,111,328 $2,111,328 $ 1,983,988 $ (127,340)
Charges for services-towing charges - - 926 926
Total revenues 2,111,328 2,111,328 1,984,914 (126,414)
Expenditures:
Sanitation 3,938,578 3,938,578 3,265,070 673,508
Pension and retirement contributions 35,000 35,000 22,637 12,363
Employees'health insurance 20,700 20,700 15,533 5,167
Miscellaneous 10,000 10,000 - 10,000
Total expenditures 4,004,278 4,004,278 3,303,240 701,038
Deficiency of revenues under expenditures (1,892,950) (1,892,950) (1,318,326) 574,624
Fund balance at beginning of year 2,789,127 2,789,127 2,789,127 -
Fund balance at end of year $ 896,177 $ 896,177 $ 1,470,801 $ 574,624
See accompanying independent auditors'report.
- 100-
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 30,2010
Original Actual Variance
and Final (Budgetary Positive
Budget Basis) (Negative)
Revenues-licenses and permits-bicycle tax $ 20,000 $ 77,604 $ 57,604
Expenditures-highways and streets 171,000 - 171,000
Excess(deficiency)of revenues over(under)
expenditures (151,000) 77,604 228,604
Fund balance at beginning of year 471,413 471,413 -
Fund balance at end of year $320,413 $549,017 $228,604
See accompanying independent auditors'report.
- 101 -
COUNTY OF HAWATT
Workforce Investment Act Fund
Schedule of Revenues,Expenditures,and Changes in Fund Balance-
Budget and Actual(Budgetary Basis)
For the Fiscal Year Ended June 30,2010
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues-intergovernmental-federal grants $ - $ 2,942,901 $ 2,942,901 $ -
Expenditures-health,education and welfare - 2,942,901 2,942,901 -
Excess of revenues over expenditures - - - -
Fund balance at beginning of year - - - -
Fund balance at end of year
See accompanying independent auditors'report.
- 102-
COUNTY OF HAWATT
Golf Course Fund
Schedule of Revenues,Expenditures,and Changes in Fund Balance-
Budget and Actual(Budgetary Basis)
For the Fiscal Year Ended June 30,2010
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
Charges for services $ 768,103 $ 768,103 $ 710,128 $ (57,975)
Miscellaneous - - 43 43
Total revenues 768,103 768,103 710,171 (57,932)
Expenditures:
Culture and recreation 942,521 942,521 829,730 112,791
Pension and retirement contributions 162,900 162,900 149,222 13,678
Employees'health insurance 80,000 80,000 69,021 10,979
Miscellaneous 16,100 16,100 6,507 9,593
Total expenditures 1,201,521 1,201,521 1,054,480 147,041
Deficiency of revenues under expenditures (433,418) (433,418) (344,309) 89,109
Other financing sources:
Transfers in-General Fund 433,418 433,418 433,418 -
Excess of revenues and other sources
over expenditures - - 89,109 89,109
Fund balance at beginning of year 82,103 82,103 82,103 -
Fund balance at end of year $ 82,103 $ 82,103 $ 171,212 $ 89,109
See accompanying independent auditors report.
- 103 -
COUNTY OF HAWATT
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 30,2010
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues-miscellaneous-geothermal royalties $ 550,000 $ 550,000 $ 192,780 $ (357,220)
Expenditures:
General government-planning 550,000 480,500 - 480,500
Culture and recreation - 69,500 67,046 2,454
Total expenditures 550,000 550,000 67,046 482,954
Excess of revenues over expenditures - - 125,734 125,734
Other financing uses:
Transfers out-Capital Projects Fund - (1,050,000) (1,050,000) -
Deficiency of revenues under expenditures
and other uses - (1,050,000) (924,266) 125,734
Fund balance at beginning of year 4,327,175 4,327,175 4,327,175 -
Fund balance at end of year $ 4,327,175 $ 3,277,175 $ 3,402,909 $ 125,734
See accompanying independent auditors'report.
- 104-
COUNTY OF HAWATT
Beautification Fund
Schedule of Revenues,Expenditures,and Changes in Fund Balance-
Budget and Actual(Budgetary Basis)
For the Fiscal Year Ended June 30,2010
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues-licenses and permits-highway
beautification $ 160,000 $ 160,000 $ 165,334 $ 5,334
Expenditures:
Highways and streets 112,500 112,500 89,781 22,719
Culture and recreation 112,500 112,500 700 111,800
Total expenditures 225,000 225,000 90,481 134,519
Excess(deficiency)of revenues over(under)
expenditures (65,000) (65,000) 74,853 139,853
Fund balance at beginning of year 959,522 959,522 959,522 -
Fund balance at end of year $ 894,522 894,522 $ 1,034,375 $ 139,853
See accompanying independent auditors'report.
- 105 -
COUNTY OF HAWAII
Hawaii County Housing Agency
Schedule of Revenues,Expenditures,and Changes in Fund Balance-
Budget and Actual(Budgetary Basis)
For the Fiscal Year Ended June 30,2010
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
Intergovernmental-
Federal-HUD-Voucher program $ 12,402,336 $ 15,143,336 $ 15,264,861 $ 121,525
Other 31,762 31,762 16,134 (15,628)
Investment earnings 60,000 60,000 23,631 (36,369)
Resale of property - - 79,125 79,125
Other - - 96 96
Total revenues 12,494,098 15,235,098 15,383,847 148,749
Expenditures:
Health,education and welfare 13,260,158 16,001,380 14,968,907 1,032,473
Pension and retirement contributions 577,500 577,500 519,384 58,116
Employees'health insurance 158,300 158,300 195,824 (37,524)
Total expenditures 13,995,958 16,737,180 15,684,115 1,053,065
Deficiency of revenues under expenditures (1,501,860) (1,502,082) (300,268) 1,201,814
Other financing sources:
Transfers in-General Fund 1,501,860 1,501,860 1,501,860 -
Excess(deficiency)of revenues and other
sources over(under)expenditures - (222) 1,201,592 1,201,814
Fund balance at beginning of year 4,923,753 4,923,753 4,923,753 -
Fund balance at end of year $ 4,923,753 $ 4,923,531 $ 6,125,345 $ 1,201,814
See accompanying independent auditors'report.
- 106-
COUNTY OF HAWATT
Park Dedication Fund
Schedule of Revenues,Expenditures,and Changes in Fund Balance-
Budget and Actual(Budgetary Basis)
For the Fiscal Year Ended June 30,2010
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues-investment earnings $ - $ - $ 78 $ 78
Excess of revenues over expenditures - - 78 78
Fund balance at beginning of year 86,601 86,601 86,601 -
Fund balance at end of year $ 86,601 $ 86,601 $ 86,679 $ 78
See accompanying independent auditors'report.
- 107-
COUNTY OF HAWAII
Agency Funds
Combining Statement of Agency Funds Net Assets
June 30,2010
Performance
State Improvement Improvement Improvement and
Weight District District District Refundable
Tax No. 17 No. 18 Revolving Deposits
Fund Fund Fund Fund Fund
Assets
Cash and cash equivalents $ 841,021 $ 869,708 $ 268,538 $ 401,000 $ 236,937
Investments - - 1,323,233 - -
Due from other agency funds - - - - -
Other receivables - 71,839 4,799 20 -
Restricted cash and cash
equivalents - 637,000 - - -
Total assets $ 841,021 $ 1,578,547 $ 1,596,570 $ 401,020 $ 236,937
Liabilities
Due to other agency funds $ 7 $ - $ - $ - $ 1,790
Accrued liabilities 841,014 77,213 7,370 - 665
Advances payable - 647 7,507 - 234,482
Assets held for the benefit of
improvement districts - 1,500,687 1,581,693 401,020 -
Total liabilities $ 841,021 $ 1,578,547 $ 1,596,570 $ 401,020 $ 236,937
See accompanying independent auditors'report.
- 108 -
Non-Profit Organ and Business
Payroll Flexible Lapsed License Tissue Improvement
Clearance Spending Warrants Plates Education District
Fund Account Fund Fund Fund 1 -Kailua Total
$ 1,813,102 $ 356,863 $ 168,872 $ 1,100 $ 364 $ 1,088 $ 4,958,593
- - - - - - 1,323,233
- - 1,955 - - - 1,955
2,911 - 32,147 - - 11,347 123,063
- - - - - - 637,000
$ 1,816,013 $ 356,863 $ 202,974 $ 1,100 $ 364 $ 12,435 $ 7,043,844
$ 158 $ - $ - $ - $ - $ - $ 1,955
1,815,855 356,863 202,974 1,100 364 1,088 3,304,506
- - - - - - 242,636
- - - - - 11,347 3,494,747
$ 1,816,013 $ 356,863 $ 202,974 $ 1,100 $ 364 $ 12,435 $ 7,043,844
_ 109-
COUNTY OF HAWAII
Agency Funds
Combining Statement of Changes in Assets and Liabilities
For the Fiscal Year Ended June 30,2010
Balance Balance
July 1, June 30,
2009 Additions Deductions 2010
State Weight Tax Fund
Assets
Cash and cash equivalents $ 893,742 $ 10,346,505 $ 10,399,226 $ 841,021
Liabilities
Vouchers payable $ - $ 10,399,226 $ 10,399,226 $ -
Due to other agency funds - 7 - 7
Accrued liabilities-due to State of Hawaii 893,742 10,275,474 10,328,202 841,014
Total liabilities $ 893,742 $ 20,674,707 $ 20,727,428 $ 841,021
Improvement District No. 17 Fund
Assets
Cash and cash equivalents $ 682,499 $ 1,117,852 $ 930,643 $ 869,708
Restricted cash and cash equivalents 637,000 - - 637,000
Other receivables 208,241 980,172 1,116,574 71,839
Total assets $ 1,527,740 $ 2,098,024 $ 2,047,217 $ 1,578,547
Liabilities
Accrued liabilities $ 212,404 $ 987,151 $ 1,122,342 $ 77,213
Advances payable 1,605 2,253 3,211 647
Assets held for the benefit
of improvement districts 1,313,731 1,117,205 930,249 1,500,687
Total liabilities $ 1,527,740 $ 2,106,609 $ 2,055,802 $ 1,578,547
- 110-
COUNTY OF HAWAII
Agency Funds
Combining Statement of Changes in Assets and Liabilities
For the Fiscal Year Ended June 30,2010
Balance Balance
July 1, June 30,
2009 Additions Deductions 2010
Improvement District No. 18 Fund
Assets
Cash and cash equivalents $ 88,601 $ 356,122 $ 176,185 $ 268,538
Investments 1,421,046 - 97,813 1,323,233
Other receivables 1,818 349,578 346,597 4,799
Total assets $ 1,511,465 $ 705,700 $ 620,595 $ 1,596,570
Liabilities
Vouchers payable $ - $ 41,596 $ 41,596 $ -
Accrued liabilities 4,989 332,613 330,232 7,370
Advances payable 6,654 14,809 13,956 7,507
Assets held for the benefit
of improvement districts 1,499,822 329,872 248,001 1,581,693
Total liabilities $ 1,511,465 $ 718,890 $ 633,785 $ 1,596,570
Improvement District Revolving Fund
Assets
Cash and cash equivalents $ 400,592 $ 408 $ - $ 401,000
Other receivables 69 20 69 20
Total assets $ 400,661 $ 428 $ 69 $ 401,020
Liabilities
Assets held for the benefit
of improvement districts $ 400,661 $ 428 $ 69 $ 401,020
Performance and Refundable
Deposits Fund
Assets
Cash and cash equivalents $ 320,330 $ 335,487 $ 418,880 $ 236,937
Liabilities
Vouchers payable $ - $ 411,310 $ 411,310 $ -
Due to other agency funds 860 2,455 1,525 1,790
Accrued liabilities 2,095 - 1,430 665
Advances payable 317,375 333,672 416,565 234,482
Total liabilities $ 320,330 $ 747,437 $ 830,830 $ 236,937
- 111 -
COUNTY OF HAWAII
Agency Funds
Combining Statement of Changes in Assets and Liabilities
For the Fiscal Year Ended June 30,2010
Balance Balance
July 1, June 30,
2009 Additions Deductions 2010
Payroll Clearance Fund
Assets
Cash and cash equivalents $ 1,844,870 $ 219,557,998 $ 219,589,766 $ 1,813,102
Due from other non-agency funds - 213,763,134 213,763,134 -
Other receivables 13,929 16,341 27,359 2,911
Total assets $ 1,858,799 $ 433,337,473 $ 433,380,259 $ 1,816,013
Liabilities
Vouchers payable $ - $ 99,577,538 $ 99,577,538 $ -
Due to other agency funds 122 158 122 158
Accrued liabilities 1,858,677 238,725,563 238,768,385 1,815,855
Total liabilities $ 1,858,799 $ 338,303,259 $ 338,346,045 $ 1,816,013
Flexible Spending Account
Assets
Cash and cash equivalents $ 374,346 $ 362,874 $ 380,357 $ 356,863
Liabilities
Accrued liabilities $ 374,346 $ 362,874 $ 380,357 $ 356,863
Lapsed Warrants Fund
Assets
Cash and cash equivalents $ 154,225 $ 14,945 $ 298 $ 168,872
Due from other agency funds 1,082 1,955 1,082 1,955
Other receivables 13,863 32,147 13,863 32,147
Total assets $ 169,170 $ 49,047 $ 15,243 $ 202,974
Liabilities
Vouchers payable $ - $ 298 $ 298 $ -
Accrued liabilities 169,170 76,633 42,829 202,974
Total liabilities $ 169,170 $ 76,931 $ 43,127 $ 202,974
- 112-
COUNTY OF HAWAII
Agency Funds
Combining Statement of Changes in Assets and Liabilities
For the Fiscal Year Ended June 30,2010
Balance Balance
July 1, June 30,
2009 Additions Deductions 2010
Non-Profit License Plates Fund
Assets
Cash and cash equivalents $ 1,390 $ 4,625 $ 4,915 $ 1,100
Liabilities
Vouchers payable $ - $ 4,795 $ 4,795 $ -
Due to other agency funds 100 - 100 -
Accrued liabilities:
Due to non-profit agency 1,250 4,625 4,775 1,100
Miscellaneous 40 - 40 -
Total liabilities $ 1,390 $ 9,420 $ 9,710 $ 1,100
Organ and Tissue Education Fund
Assets
Cash and cash equivalents $ 398 $ 1,552 $ 1,586 $ 364
Liabilities
Vouchers payable $ - $ 1,586 $ 1,586 $ -
Accrued liabilities-due to State of Hawaii 398 1,552 1,586 364
Total liabilities $ 398 $ 3,138 $ 3,172 $ 364
Business Improvement District 1-Kailua
Assets
Cash and cash equivalents $ 229 $ 833,820 $ 832,961 $ 1,088
Other receivables-BID 1-Kailua Assessment 22,522 823,612 834,787 11,347
Other receivables 2,885 - 2,885 -
Total assets $ 25,636 $ 1,657,432 $ 1,670,633 $ 12,435
Liabilities
Vouchers payable $ - $ 829,128 $ 829,128 $ -
Accrued liabilities-due to KVBID 3,113 1,088 3,113 1,088
Assets held for the benefit
of improvement districts 22,523 836,058 847,234 11,347
Total liabilities $ 25,636 $ 1,666,274 $ 1,679,475 $ 12,435
- 113 -
COUNTY OF HAWAII
Agency Funds
Combining Statement of Changes in Assets and Liabilities
For the Fiscal Year Ended June 30,2010
Balance Balance
July 1, June 30,
2009 Additions Deductions 2010
Total-All Agency Funds
Assets
Cash and cash equivalents $4,761,222 $ 232,932,188 $ 232,734,817 $4,958,593
Investments 1,421,046 - 97,813 1,323,233
Due from other agency funds 1,082 1,955 1,082 1,955
Due from other non-agency funds - 213,763,134 213,763,134 -
Other receivables-BTD1-KailuaAssessment 22,522 823,612 834,787 11,347
Other receivables 240,805 1,378,258 1,507,347 111,716
Restricted cash and cash equivalents 637,000 - - 637,000
Total assets $7,083,677 $ 448,899,147 $ 448,938,980 $7,043,844
Liabilities
Vouchers payable $ - $ 111,265,477 $ 111,265,477 $ -
Due to other agency funds 1,082 2,620 1,747 1,955
Accrued liabilities 2,621,721 240,484,834 240,645,615 2,460,940
Accrued liabilities-due to non-profit agency 1,250 4,625 4,775 1,100
Accrued liabilities-due to State of Hawaii 894,140 10,277,026 10,329,788 841,378
Accrued liabilities-due to KVBID 3,113 1,088 3,113 1,088
Advances payable 325,634 350,734 433,732 242,636
Assets held for the benefit
of improvement districts 3,236,737 2,283,563 2,025,553 3,494,747
Total liabilities $7,083,677 $ 364,669,967 $ 364,709,800 $7,043,844
See accompanying independent auditors'report.
- 114-
COUNTY OF HAWAIT
Private Purpose Trusts
Combining Statement of Private Purpose Trust Net Assets
June 30,2010
Shippers' Total
Geothermal Wharf Private
Asset Trust Purpose
Assets Fund Fund Trusts
Cash and cash equivalents $ 2,055,724 $ 822,653 $ 2,878,377
Investments - 1,770,085 1,770,085
Other receivables 102 68 170
Total assets $ 2,055,826 $ 2,592,806 $ 4,648,632
Net Assets
Held in trust for other parties $ 2,055,826 $ 2,592,806 $ 4,648,632
Total net assets $ 2,055,826 $ 2,592,806 $ 4,648,632
See accompanying independent auditors'report.
- 115 -
COUNTY OF HAWAIT
Private Purpose Trusts
Combining Statement of Changes in Private Purpose Trust Net Assets
For the Fiscal Year Ended June 30,2010
Shippers' Total
Geothermal Wharf Private
Asset Trust Purpose
Fund Fund Trusts
Additions
Contributions:
Puna Geothermal Venture $ 50,000 $ - $ 50,000
Investment earnings:
Net decrease in fair value of investments - (45,475) (45,475)
Dividends - 50,872 50,872
Interest 1,825 1,410 3,235
Total additions 51,825 6,807 58,632
Deductions
Grant payments - 90,373 90,373
Total deductions - 90,373 90,373
Change in net assets 51,825 (83,566) (31,741)
Net assets,beginning of year 2,004,001 2,676,372 4,680,373
Net assets,end of year $ 2,055,826 $ 2,592,806 $ 4,648,632
See accompanying independent auditors'report.
- 116-
STATISTICAL SECTION
(UNAUDITED)
Contents Page
Financial Trends—These schedules contain trend information to help help the reader understand
how the County's financial performance and well-being have changed over time. 117
Revenue Capacity—These schedules contain information to help the reader assess the County's
most significant local revenue source,the property tax. 121
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. 127
Demographic and Economic Information—These schedules offer demographic and economic
indicators to help the reader understand the environment within which the County's financial
acitivities take place. 130
Operating Information—These schedules contain service and infrastructure data to help the
reader understand how the information in the County's financial report relates to the services
provided and the activities performed by the County. 132
Table 1
COUNTY OF HAWAII
Net Assets by Component
Last Nine Ft—I Ycus
Fiscal Year
2002 2003 2004 2005 2006 2007 2009 2009 2010
Governmental activities
1—n—d in capiml assets,net of related debt $ 316,909,229 S 333,571,558 $ 336,435,768 S 364,662,377 $ 386,861,296 S 394,789,635 $ 419,174,559 $ 419,615,479 S 469,235,991
Rest,eted 22.122,090 27,577,754 37,333,730 41,950,262 44,737,588 54,857,023 66,977,935 63,408,379 43,958,660
l lnrectnc[ed (19,830,952) (13.132,955) (10,384,644) (11.741,743) 8,885,911 21,350,091 27,329,104 42,457,132 37,623,937
Total go-na tal activities net assets $ 319,200,367 S 348,016,357 $ 363,384.854 S 394,870,896 $ 440,484.795 $ 470,996,749 $ 513,481.598 $ 525,480,990 S 550,818,478
B-i-11-type activities
Invested in capital assets,net frelated debt $ 347,480 S 333,860 $ 324,942 S 325,800 $ 317,534 S 310,409 $ 307,424 $ 305,127 S 303.244
Rc,anetcd 179,028 180,782 180,782 181167 182,797 183,832 184,352 184,643 184,914
Unrestricted 949,932 976.1177 973,704 850.962 913,431 636,756 608,195 609,798 497,4ti6
Total business-type activities net assets $ 1,376,340 $ 1,390,749 $ 1,379,428 $ 1.358,929 $ 1,313,762 S 1,130,997 $ 1,099,97t $ 1099,568 $ 985,624
Primary oovennncot
i Invested in capital assets,net afrclated debt $ 317,256,709 $ 333,905,418 $ 336,760,710 $ 364,988,177 $ 387,t 78,830 S 395,100,044 $ 419,481,983 $ 419,920,606 $ 469,539,125
Rcstucecd 22,301,118 27,758,536 37,514,572 42,132,429 44,920,385 55,040,855 67,162,287 63,593,022 44,143,574
'tt-tcd (18,981,120) (12,256,848) (9,510,940) (10 890,781) 9,699,342 1,98x,847 27,937,299 4 O/1i,930 38,121,403
l�ntal pr many govnnment netaset, $ 320,576,707 0 349,407,106 $ 364,764,282 0 ,96,229,825 $ 441,798,557 $ 471127,746 $ 514,581,569 $ 526,580,558 $ 551,804,102
Unaudited-.see accompanying independent auditori report.
Information is only available from Fiscal Ycar 2002,the year GASR 34 was implemented.
Table 2
COUNTY OF IT VXA IT
Changes in Net Assets
Last Nine Fiscal Year
Fiscal Year
2002 2003 2004 2005 2006 2007 2003 2009 2010
Program Revenues
Governmental activities:
Charges f r services:
General govcrnmcnt $ 2,173,770 S 1,911,11711 S 1,947,554 $ 3,227,420 $ 4,032,542 S 4,4611,1116 $ 6,017,819 $ 5,442,950 $ 4,315,849
Public safety 3,927,495 4,349,355 5,1161,174 6,261259 6,975,962 5,796,126 5,843,733 4,846,834 4,449,519
Highwa ys and street& 4,422,416 5,324,908 6,1152,544 7,629,139 9,079,084 9,354,639 9,7111,815 9,636,799 9,351,219
Health,education and welfare 865,365 991,725 884.075 1,272.091 9811,147 799,075 754,758 532,832 713,774
Culture and recreation 1,366,370 1,593,6211 1,588,945 1,521,127 1,439,784 1,634,1108 1,595,409 1,557,597 1,6119,1141
Sanitation 10,969,909 10,596,469 13,653,722 15,465,478 16,469,745 18,486,502 18,643,952 16,415,985 14,934,570
Operating grants and contributions 27,198,314 31,544,494 33,327,191 36,370,993 38,252,889 38,068,138 46,117,399 42,273,795 49,571,173
Capital grants and contributions 27,871,495 19,064,821 9,668,981 36,221.627 14,801,828 7,805,986 9,327,408 15,728,186 13,532,669
Total govemmcntalaovites progan'cvenues 78,795,134 75,376,462 72,184,186 97,970.134 92,031,981 86,406,490 98,002,293 96,434,978 98,477,814
Rusincss-type activities:
Charges for services:
Health,education and welfare 279,359 304,671 303,047 314,971 338,141 345,802 365,655 371,511 337,982
Operating grants and contributions 147,582 147,997 143.769 135,829 141,019 134,21 1 125.795 135,674 136,802
Total business-type activities prosor revenues 426,951 452,668 446.816 450,800 479,150 480,013 491.450 507,185 474,784
Total primary grovcrnmcnt progrram rcvcnucs $ 79,222,085 5 75,829,130 5 72,631,002 $ 98,420.934 $ 92,511,141 $ 85,886,503 $ 98,493,743 $ 911,942,163 $ 98,952,598
Expenses
Govennoriental activities:
General government $ 37,796,311 S 36,461,949 S 411,1185,357 $ 51,262,329 $ 38,264,132 S 46,349,904 $ 68,794,961 $ 69,968,534 $ 65,552,278
Public safety 75,709,394 77,131,374 911,434,696 94,422.057 106,067,466 118,0111,316 137,511(108 144,755,837 148,115,428
Highways and sheets 22,627,472 15,512,957 17,563,608 20,857,341 24,783,476 28,185,968 33,577,707 36,466,541 38,075,835
Health,education and welfare 17,854,112 20,205,386 23,041,963 21,503,635 20,181,685 23,203,874 14,986,972 33,783,223 30,528,977
Culture and recreation 14,903,986 16,430,590 15,979,854 16,124,457 19,464,962 26,948,501 20,450,172 32,633,418 14,739,755
Sanuanon 18,641,654 19,022,213 20,084,654 26,669,660 27,265,515 42,682,281 41,254,728 40,191,704 27,527,841
Uu-st on long-le,no debt 8,769,167 8,680,999 9,553,966 8,718.758 10,168,710 10,303,332 13,1 17,325 13,914,969 14,120,398
Total govemmental activities expenses 196,302,096 193,445,458 216,744,098 239,558237 246,195,946 295,584,176 329,682,473 371,714,226 338,660,512
Rusincss-type activities:
Health,education and welfare 455,936 450,343 466.143 484,879 547,201 698,329 556.304 525,449 590,131
Total business-type activities expenses 455,93(1 450,343 466.143 484,879 547,201 698,329 556.304 525,449 590,131
Total primary govcrnmcnt expenses $ 196,758,032 5 193,895,811 5 217,210,241 $240,043.116 $246,743,147 S 295,382,505 $330,238,777 $372,239,675 $339,250,643
Net Expense
Governmental activities $(117,506,962) 8(1 18,(169,11(16) S(144,559,912) $(141,588,103) $(154,163,965) 8(21)9,277,686) $(231,680,1811) $(275,279,248) $(2411,182,698)
Rusine.ss-type activities (28,985) 2,325 (19,327) (34,079) (68,1)41) (218,316) (64,854) (18,264) (115,347)
Total primary government net czpcnsc $(117,535,947) 5(118,1166,681) 5(144,579,2;9) $(141,622,182) $(154,232,006) 5(2118496,11112) $1231,745M"14) $(275,297,512) $(2411,298,1145)
General Revenues and Other Changes in Net A-ts
Governmental activities:
General revenues:
Property taxes $ 94,197,060 S 109,151,524 S 119,864,237 $129,775 410 $152,182,806 S 183,611,050 $210,217,690 $229,262.980 $218,037,567
Public service company taxes 5,108,291 5,063,897 5,332,478 (,351.2-3 (,811,483 7,396,084 8,381,367 10,228:607 9,647,055
Public utility fianclike taxes 4,992,959 4,816,565 5,373,144 6,016.890 7,328,887 8,520,133 9,026,841 11,118,365 8,963,041
Fuel taxes 6,421,837 7,343,088 7,552,317 7,580 740 7,857,394 8,471,453 7,887,998 7,662.113 7,405,996
Grants and contributions not rstricted to
specific programs 13,501,966 13,931,403 15,251,443 16,734,330 18,510,262 18,999,596 19,395,()89 17,883,019 17,500,033
Investment corning, 3,568,2 10 1,936,635 1,729,531 2,957,188 4,976,173 9,727,911 11,454,850 8,3(9,221 2,137,266
Miscellancnus 1,532,980 4,641,884 4,825,259 3,657,794 2,110,854 3,063,413 7,8111,194 2,749,335 1,779,223
Transfers out (838,445)
Total governmental adivit- 128,534,858 146,884,996 159.928,409 173,1174.145 199,777,864 239,789,6411 274,165,029 287,278.640 265,520,186
Rusincss-type activities:
General revenues:
Tnwshncntcanings 19,064 12,084 8.006 13,580 22,874 35,551 33,828 17,861 1,403
Total business-type activities 19,064 12,084 8.006 13,580 22,874 35,551 33.828 17,861 1,403
Total primary govcrnmcnt $ 128,553,922 S 146,897,080 11 159,936,415 $ 173,087.725 $ 199,800,738 S 239,825,191 $274,198,857 $287,296,501 $265,521,589
Changes In Net Assets
Governmental activities $ 11,027,896 3 28,815,990 $ 15,368,497 $ 31,486.042 $ 45,613,899 S 30,511,954 $ 42,484,849 $ 11,999,392 $ 25,337,488
Business-type activities (9,921) 14,409 (11,321) (20,499) (45,167) (182,765) (31,026) (403) (113,944)
Total primary government changes in net asset $ 11,017,975 S 28,830,399 S 15,357,176 $ 31,465.543 $ 45,568,732 S 30,329,189 $ 42,453,823 $ 11,993.989 $ 25,223,544
Unaudited-sce accompanying ind Pi ahntmmiftn iepno
information is only available from Fiscal Ycar 2002,the year GASR 34,-implement-,
118-
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- 119
Table 4
COUNTY OF HAWAII
Changes in Fund Balances,Governmental Funds
(Modified accrual basis of accounting)
Last Ten Fiscal Year's
(Amounts in thousands)
Fiscal Year
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Revenues:
Property tax $84,240 $ 93,712 S109,991 $121,868 $131,087 S 153,207 $181,446 $208,313 S225,858 $215,548
Public service company tax - 5,108 5,064 5,332 6,351 6,812 7,396 8,381 10,229 9,647
Fucl tax 6,450 6,422 7,343 7,552 7,581 7,857 8,471 7,888 7,662 7,406
Public utility franchise tax 4,777 4,993 4,817 5,373 6,017 7,329 8,520 9,027 11,118 8,963
Licenses and p,mits 7,412 7,781 9,261 11,840 14,442 16,544 16,269 15,918 14,972 14,725
Intergovernmental 55,034 68,918 65,203 58,559 73,372 69,637 63,599 72,601 70,869 77,614
Charges for services 12,056 11,689 13,481 14,467 18,149 19,852 21,685 22,154 21,404 18,909
Invesnnent earnings 6,409 3,801 2,066 1,806 3,104 5,223 10,291 12,144 8,914 2,253
Miscellaneous 2,529 3,035 6,179 4,718 4,450 4,380 5,073 7,151 5,690 3,241
Total Revenues 178,907 205,459 223,405 231,515 264,553 290,841 322,750 363,577 376,716 358,306
Expenditures:
Current
General government 22,073 20,192 22,317 23,070 26,183 31,153 37,652 42,991 45,882 40,586
Public satery 59,391 61,870 64,667 69,117 76,404 83,591 93,241 103,617 107,540 108,798
Highways and streets 9,998 8,376 8,675 9,542 9,787 12,608 14,033 19,529 17,159 20,222
Sanitation 13,481 14,789 16,629 17,602 21,883 26,565 31,817 33,405 35,025 35,675
Health,education and welfare 8,344 16,726 18,867 19,047 19,870 19,050 21,470 24,609 24,596 25,519
Culture and recreation 12,085 12,127 13,086 13,169 13,982 14,731 17,118 18,179 18,853 17,266
Pension and reti cement contri butions 3,679 11,019 7,926 11,081 14,204 19,937 21,796 24,296 28,870 28,509
Employees health insurance 10,773 12,198 12,758 14,256 16,168 16,133 16,941 18,089 19,119 23,573
Other postemployment benefits - - - - - - - 13,629 14,950 15,700
Miscellaneous 4,040 5,330 5,629 7,128 6,133 6,780 5,108 5,344 6,257 4,773
Debt service:
Principal 9,399 10,025 11,800 12,826 13,150 14,060 16,076 16,548 19,749 20,720
Interest 8,416 8,467 8,469 9,283 9,534 9,914 9,894 13,116 12,790 14,584
Capital outlay 37,648 41,580 32,952 23,474 32,816 30,588 52,285 70,156 89,368 100,653
Total Expenditm'es 199,327 222,699 223,775 229,595 260,114 285,110 337,431 403,508 440,158 456,578
Revenues over(under)Expenditures (20,420) (17,240) (370) 1,920 4,439 5,731 (14,681) (39,931) (63,442) (98,272)
Other Financing Sources(Uses):
Sale of assets 16 15 9 1,593 1,486 82 5 3,470 58 10
Capital lease,; 23 930 1,353 1,474 1,369 404 2,403 2,187 1,026 1,948
State Revolving Fund loans 3,422 578 853 - 1,504 25 6,255 1,916 280 6,811
Sale of bonds - 15,175 37,262 1,725 30,000 25,000 85,000 - 50,000 -
Issuance on bond anticipation notes(BAN) - - - - - - - - - 19,000
Refunding bonds - - - - 24,595 - 31,607 - - -
Premium on bonds - - - - 3,025 972 3,099 - 185 -
Refundingbonds/BANS issuance costs - - - - (139) - (218) - - (19)
Payment to refunded bond escrow agent - - - - (25,885) - (32,699) - - -
Transtersin 28,625 29,529 29,943 39,440 42,119 45,691 59,139 64,929 56,697 61,495
Transfers out 28,568) 30,367) 29,943) 39,440) 42,119) (45,691) 59,139) 64,929) 56,697) 6( 1,495)
Total other financing sources 3,518 15,860 39,477 4,792 35,965 26,483 95,452 7,573 51,549 27,750
Net change in tund balances $(16,902) $ (1,380) S 39,107 $ 6,712 $ 40,404 S 32,214 $ 80,771 $(32,358) $(11,893) $(70,522)
Debt service as a percentage of
mmeapital cxpcnditttres 11.0% 10.2% 10.6% 10.7% 10.0% 9.4% 9.1% 8.9% 9.3% 9.9%
Unaudited-sec u-napunying indcpcnd,,,t auditors'report.
-120-
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- 124 -
Table 6
COUNTY OF HAWAII
Principal Taxpayers
June 30,2010 and 2001
Fiscal Year 2010 Fiscal Year 2001
Percentage Percentage
2009 of Total 2000 of Total
Assessed Assessed Assessed Assessed
Taxpayer Business Valuation Rank Valuation Valuation Rank Valuation
Mauna Kea Development Corp. Developer/Hotel $ 259,905,800 1 0.9% $ 221,974,000 1 1.8%
Hilton Land Investment 1 LLC Hotel 237,983,900 2 0.8% - -
Hualalai Investors LLC Developer/Hotel 227,679,700 3 0.8%
WB-LCP Orchid Owner LLC Hotel 135,679,800 4 0.5%
WB KD Acquisition LLC Developer 187,819,800 5 0.7% - -
Mauna Lani Resort Inc. Developer/Hotel 101,612,800 6 0.4% 41,779,700 7 0.3%
Hilton Resorts Corp. Timeshare 114,478,900 7 0.4% - -
BRE/Waikoloa LLC Hotel 65,000,600 8 0.2%
Raptor Residence LLC Private Dwelling 69,833,600 9 0.2%
Kona Coast Resort Ltd. Condo/Time Share 73,824,400 10 0.3% - -
Global Resort Partners Hotel - - 150,000,000 2 1.2%
1250 Oceanside Partners Developer 95,432,450 3 0.8%
RWH Inc. Hotel 51,255,000 4 0.4%
Waikoloa Land&Cattle Co Ranching/Developer 44,400,300 5 0.4%
Ho Retail Properties I LTD Retail 49,112,300 6 0.4%
Waikoloa Dev Co Developer 36,608,200 8 0.3%
Tokyo Corporation Developer 29,112,600 9 0.2%
Kamehameha Investment Corp Developer/Hotel - 32,584,500 10 0.3%
$1,473,819,300 5.2% $ 752,259,050 6.1%
Note: Gross valuation at January 1,2009: $28,153,504,064
Gross valuation at January 1,2000: $12,264,491,472
Source: County of Hawaii,Department of Finance,Real Property Tax Division
Unaudited-see accompanying independent auditors'report.
- 125 -
Table 7
COUNTY OF HAWAH
Property Tax Levies and Collections
Last Ten Fiscal Years
Outstanding
Total Delinquent
*Current Current Percent Delinquent Total Collections as Outstanding Taxes as
Fiscal Tax Tax of Levy Tax Tax Percent of Delinquent Percent of
Year Levv Collections Collected Collections Collections Current Levy Taxes Current Levv
2001 S 82,831,891 S 79,914,506 96% $ 2,497,533 $ 82,412,039 99% $ 419,852 1%
2002 91,145,303 87,933,472 96% 2,862,622 90,796,094 100% 349,209 0%
2003 106,274,939 102,995,602 97% 3,153,074 106,148,676 100% 126,263 0%
t� 2004 116,422,812 113,416,817 97% 2,879,682 116,296,499 100% 126,313 0%
a
2005 128,842,214 126,574,921 98% 2,109,362 128,684,283 100% 157,931 0%
2006 150,286,806 147,712,630 98% 2,267,614 149,980,244 1001y. 306,562 01y.
2007 181,444,113 177,246,493 98% 3,462,438 180,708,931 100% 735,182 0%
2008 207,886,358 202,702,858 98% 3,403,415 206,106,273 99% 1,780,085 1%
2009 226,622,748 219,437,531 97% 3,398,108 222,835,639 98% 3,787,109 2%
2010 215,218,889 207,501,307 96% - 207,501,307 96% 7,717,582 4%
*Amounts reflect subsequent adjustments
Sntu'ce.' Countv of Hawaii,Department of Finance,Real Property Tax Division
Unaudited-see accompanying independent auditors'report.
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- 127 -
Table 9
COUNTY OF HAWAII
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
Debt Percent of
Applicable to Net Taxable
Fiscal Legal Debt Property Per
Year Margin(a) Value(b) Capita(c)
2001 $156,636,220 1.6% 1,032
2002 161,3 10,657 1.5% 1,042
2003 187,316,839 1.6% 1,180
2004 176,693,195 1.4% 1,082
2005 195,198,142 1.3% 1,167
2006 205,219,940 1.2% 1,199
2007 281,836,503 1.2% 1,633
2008 265,431,280 1.0% 1,510
2009 296,535,925 1.0% 1,667
2010 277,481,633 1.0% 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.
- 128 -
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- 129 -
Table 11
COUNTY OF HAWAII
Demographic and Economic Statistics
Last Ten Fiscal Years
Fiscal Personal Per
Year Resident Income Capita
Ended Population (thousands Personal School Unemployment
June 30, as of July 1 of dollars) Income Enrollment Rate
2000 148,677 $ 3,299,794 $ 22,132 30,193 4.7%
2001 150,806 3,478,755 23,056 29,792 5.0%
2002 153,040 3,697,485 24,140 29,826 4.6%
2003 156,127 3,869,362 24,750 29,635 4.6%
2004 159,865 4,223,829 26,371 29,827 3.9%
2005 164,462 4,638,838 28,133 30,262 3.3%
2006 169,061 5,064,624 29,873 30,539 2.9%
2007 172,547 5,453,841 31,491 30,618 3.4%
2008 175,784 5,640,888 31,978 30,408 5.6%
2009 177,835 N/A N/A 30,016 9.7%
Source: County of Hawaii,Department of Research and Development
Unaudited-see accompanying independent auditors report.
- 130 -
Table 12
COUNTY OF HAWAII
Principal Employers,County of Hawaii
June 30,2010 and 2001
2009(a) 2000(a)
Percentage Percentage
of Total County of Total County
Employer Employees Rank Employment Employees Rank Employment
State of Hawaii 8,115 1 9.4% 7,450 1 10.6%
County of Hawaii 2,745 2 3.2% 2,250 2 3.2%
United States Government 1,364 3 1.6% 850 5 1.2%
Hilton Waikoloa Village 984 4 1.1% 1,200 4 1.7%
Wal-Mart 8.52 5 1.0% - -
KTA Super Stores 800 6 0.9% 776 7 1.1%
Mauna Lani Resort(Operation),Inc. 685 7 0.8% 800 6 1.1%
The Fairmont Orchid,Hawaii 577 8 0.7% -
Four Seasons Resort Hualalai 562 9 0.7% - -
Hapuna Beach Prince Hotel 487 10 0.6% 579 9 0.8%
C.Brewer&Co. - - 1,987 3 2.8%
Mauna Lani Bay Hotel 650 8 0.9%
Orchid at Mauna Lani - - 554 10 0.8%
Total 17,171 20.0% 17,096 24.4%
Total employee count 86,325 70,050
NOTES:
(a)Data for Fiscal Year 2010 and 2001 are unavailable.
Source: County of Hawaii,Department of Research and Development
Unaudited-see accompanying independent auditors'report.
- 131 -
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