HomeMy WebLinkAboutCAFR 2011 Final with opinion (2) COMPREHENSIVE
ANNUAL FINANCIAL REPORT
Fiscal Year Ended June 30, 2011
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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
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COUNTY OF HAWAII
Comprehensive Annual Financial Report
For the Fiscal Year Ended June 3 0, 2011
Table of Contents
1
INTRODUCTORY SECTION
Letter of Transmittal 1
GFA Certificate of Achievement
Organization Chart
List of Elected Officials
List of Principal Officials 1
FINANCIAL SECTION
Report of Independent Auditors I 1
Management's Discussion and Analysis 1
3 Basic Financial Statements:
Goverrument-wide Financial Statements:
Statement of It Assets
Statement of Activities 2
Fund Financial Statements:
Balance Sheet- Governmental Funds
ec nciliati n' of the Governmental Funds Balance Sheet to the
Statement of Net Assets 31
Statement of Revenues,Expenditures, and Changes in Fund Balances -
G v rmnental Funds 32
F
Reconciliation f 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
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
Statement of Changes in Fiduciary Net Assets-Fiduciary Funds
Dotes to the Basic Financial Statements
Required Supplementary Information 87
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FINANCIAL SECTION (Continued)
Combining and Individual Inmaj or Fund Statements and Schedules:
Combining Balance Sheet-Nomnajor Governmental Funds 9
Combining Statement of Revenues,Expenditures, and Changes in Fund
Balances-N nmaj or Governmental Funds 94
a Schedules of Revenues,Expenditures,and Changes in Fund Balances-
udget and Actual(Budgetary Basis):
Highway Fund 97
Sever Fund 9
Solid Waste Fund
Cemetery Fund 100
Parking Teter Fund 101
Vehicle Disposal Fund 102
Bikeway Fund 103
Workforce Investment Act Fund 1
Golf Course Find 105
Geothermal Relocation and Community Benefits Fund 106
Beautification Fund 107
Hawaii County Dousing Agency 108
Park Dedication Fund 19
Combining Statement of Agency Funds Net Assets-Agency Funds 110
Combining Statement of Changes in Assets and Liabilities-Agency Funds 112
Combining Statement of Private Purpose Trust Net Assets -Private Purpose Trusts 11
Combining Statement of Changes in Net Assets-Private Purpose Trusts 11
STA'T'ISTICAL SECTION
Table 1 -Net Assets by Component 119
Table 2-Changes in Net Assets 120
Table 3 -Fund Balances,Governmental Funds 122
Table 4-Changes in Fund Balance, Governmental Funds 123
Table 5 -Real Property Assessed values by Classification and Tax Rates 124
Table 6-Principal Taxpayers 128
Table 7-Property Tax Levies and Collections 129
Table 8 -Ratios of Outstanding Debt by Type 130
Table 9 -Ratios of General Bonded Debt Outstanding 131
Table 1 -Legal Debt Margin Information 132
Table 1 I -Demographic and Economic Statistics 133
Table 12 -Principal Employers, County of Hawaii 134
Table 1 -Full-Time Equivalent County Government Employees by Function 13
Table 1 -Operating Indicators by Function 136
Table 1 -Capital Asset Statistics by Functions 137
INTRODUCTORY SECTION
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William P.Kenoi son Nancy E. Crawford
. .0 _'Y 4
Mayor Director
Deanna S. Sako
+ -� ***
�:#0 .p;°.9* epu Director
County of Hawaii
Finance Department
25 Aupuni street, loom 2103 • Hilo,Hawaii 96720
(805)961-8234 . Fax(808)961-8569
December 2' , 2011
The Honorable Mayor and Members of the Council
County of H w 1'1
25 Aupuni Street
Hilo, Ha ai'i 96720
We transmit herewith the Comprehensive Annual Financial Report for the County of
Hwai`i, State of Hawa.i`i (the County), for the fiscal year July 1, 201 o to June 3 o, 2011.
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 goverment. 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 Hawai`i at June 3 0, 2011 and
results of operations for the fiscal year then ended. The report is divided into three
sections:
• The Introductory Section includes this transmittal letter, a Certificate of Achievement
for Excellence in Financial Reporting,the County of Haw i`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 the County of Hawa.i`i, including its component unit,the
Department of Water Supply, established by the County Charter as a semi-autonomous
a ai`i County is an equal opportunity provider and employer.
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body of 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 ofmunicipal 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 awa.i`i, 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-
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mem er council.
Economic Condition and outlook
The island of H wai`i, 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.
ilo'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 Kohal a, 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 Iona
International Airport. Scheduled freight services are available between n 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 and the remainder of fiscal year 2011 continued to show signs of the same
restrained recovery.
The County's labor force numbered 83,367 at June 2011, which is a slight increase from
a year ago. A sign that the economy is on the road to improving instead of the dramatic
downturn that confronted the County several years ago is the fact that the County's
unemployment rate for the current fiscal year 2011 (9.5%)was slightly lower than the
prior fiscal year 201 (10.0%), which serves as a positive indicator for the second year in
a row. 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.
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= Tourism—Tourism has always been 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 a vai`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 increased activity of Kilauea volcano. Another indication of the
County's slowly rebounding industry, is the fact that there was a % increase in the
number of visitors to the island from the prior fiscal year. For the state overall, visitor
arrivals have shown an amazing increase after the dismal performance in 2009,'with
visitor spending proving to be even more impressive.
Construction—The County's second significant industry is construction, which appears
to be a weakness for the island economy as seen in the negative growth of construction
completed, lover building p rnnits and losses in the industry's job total.
Scientific Research and e e o me —Due largely to its unique geographic
characteristics which has attracted scientists in fields of a.str n m , meteorology,
volcanology, and agricultur aqua ulture, the County has benefited economically by the
significant investments made in scientific research. The total astronomy related capital
investment on Mauna Idea exceeds $600 million and combined annual budgets are about
$72 million. Astronomy continues to a major factor in the success of the County's
economy with an estimated nearly 500 new jabs opening up through 2023 to meet the
needs of the current observatories and the creation of new jobs with the development f
the Thirty Meter Telescope TMT by the TMT Observatory Corporation.. On July 21,
2009, the TMT Observatory Corporation announced that its board of directors had
selected Mauna Idea over Chile as the preferred site for the Thirty Meter Telescope
(TMT) and the permit application was approved by the Board of Land and Natural
Resources in February 2011. 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
fill-time pennanent jobs. The Hawaiian volcano Observatory in Hawaii volcanoes
National Park and the Natural Energy Laboratory of Ha vai`i Authority at Keah l , Kona
are also major contributors to international research and the local economy.
Major Initiatives
For the Year
During the year, the County focused on construction projects relating to housing,
sanitation and public safety, and other issues affecting the quality of life in the County.
Public Sac —During the fiscal year, construction was completed on the building that
houses the Pah a Police Station and an office for the Vehicle Registration& Licensing
Division of the Department of Finance and the adjoining Pah .Fire Station.
In August 2010, the Fire Department's new replacement rescue chopper was blessed and
less than a year later, in May 2011, groundbreaking ing occurred for the new Mal alei Fire
Station in North Iona.
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- Public Thor Construction continued on the wai oloa Housing project and on another
large housing project, by the name of the Kaloko Housing Project, and its related
Wastewater Treatment Plant, with an additional $3.9 million and almost $9.o million
being expended during the fiscal year. Construction also continued on the 85,000-square-
foot west�Ia i'i Civic Center that began in 2008, and was substantially complete as of
January 2011. Total project expenditures reached $50.5 million at the end of the year.
Environmental Management--The Department completed construction related to the
Pahoa Solid waste Recycling & Transfer Station with a total cost to the County of$4.5
million. Construction also continued on the Honol as and Queen Liliuokalani village
Large Capacity Cesspool projects, with both projects reaching a total combined price tag
of$18.6 million.
For the Future
Public Safety—The South Kona Police Station is still in the final design phase. This
facility will be a major boost to the South Rona District once funding can be secured.
The Police Department is currently in the final phase of self assessment of obtaining law
enforcement accreditation through the Commission on Accreditation for Law
Enforcement Agencies C L A . The Department will shortly be in a position to
request for an on-site assessment from GALA. In accordance with the GALA
accreditation, the department is expecting to initiate its on-line computerized training
nodule which will allow for not only more timely training, but will also allow for
computerized recording of training undertaken by personnel.
.public Works —The Ane Keoholkalole Highway or Mid-Level Road is scheduled for
completion in May 2012. The-$35 million project is being built with American
Reinvestment and Recovery Act(Stimulus fands . The project will provide construction
jobs and enhance further development in the immediate areas.
Planting—Global warning and the rise in Coastal Waters are of great concern to
Havai'i, which has lead to continued participation in the State's Oceanic Resource
Management Program RMP)policy groups, working groups, seminars, and other
training to address this phenomenon. regulating development within the Special
Management Area is on-going as part of the County's administration of Coastal Zone
Management. Since it impacts how we plan our future communities, a major focus of the
Planning Department is the refining and completing of the Community Development
Plains and subsequent-updating of the General Plan.
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
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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 i
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Other Information
Independent Audit
The County Charter requires an annual audit her independent certified public accountants.
Aeeuity LLP was selected in accordance with the County Charter and the procurement
provisions of the Hawaii Revised ised Statutes (H RS) and Hawaii Administrative Rules
(HAS.) to perform the audit.
Employee Union Contracts
County employees are members of eight different bargaining units. Six bargaining units
have contracts that will expire on June 30, 2013 and the remaining two bargaining units'
contracts have already expired and negotiations are underway.
Certificate Achievement
The G verrunm nt Finance Officers Association of the United States and Canada GF A
awarded a Certificate of Achievement for Excellence in Financial Reporting to the
County of Hawai`i for its Comprehensive Annual Financial Report for the fiscal year
ended,dune 30, 2010. This was the twenty-third 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 GF A 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 f 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 f the County Council for their interest and support in assuring the continuing
sound financial condition of the County of Havai`i.
NANCY E. CRAWF RD
Director of Finance
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Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
County of Hawaii
Hawaii
For its Comprehensive Annual
Fanancial Report
for the Fiscal Year Ended
June 30,2010
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(CAF'Rs)achieve the highest
standards in government accounting
and financial reporting.
cow t�T�� President
aft
At
pit,
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
a
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 � ' e of Agi Police
Planning Mass Transportation Liquor Control
Environmental Management Housing& Community Fire
Research&Development Development Water Supply
Public Works (semi-autonomous)'
Parks &Recreation
Data Systems
County of Hawaii
Elected Officials
June 30, 2011
Administrative Officers (Term: 2008-2012)
William P. Kenoi Mayor
Charlene Iboshi (effective 4/1/11) Prosecuting Attorney
County Council (Term: 2010-2012)
Dominic Yagong Chair
K. Angel Pilago Vice Chair
Fred Blas Member
Brenda Ford Member
Pete Hoffmann Member
Donald Ikeda Member
Dennis "Fresh" Onishi Member
Brittany Smart Member
J Yoshimoto Member
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Principal Officials
June 30, 2011
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County Clerk Jamae Kawauehi
Legislative Auditor Colleen Sehrandt
Managing Director William Talaha
Deputy Managing Director Walter Lau
Corporation Counsel Lincoln Ashida
Director of Finance Nancy E. Crawford
Planning Director Bobby Jean Leithead-Todd
Director of Personnel Ronald Takahashi
Director of Research and Development Randy Kurhar
Chief of Police Harry S. Kubojiri
Fire Chief Darryl Oliveira
Director of Public Works s Warren Lee
Director of Environmental Management Frank mar o
Director of Parrs and Recreation Robert Fitzgerald
Manager, Department of Water Supply Milton 1 avao
Civil Defense Administrator Quince Memo
Director of Liquor Ctrl Gerald Tase
Transit Operations Administrator Thomas Brown
Executive on Aging Alan Parker
Administrator, Office of Housing and
Community Development Stephen Arnett
Director of Data Systems Burt Tsuehiya
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FINANCIAL SECTION
0
Loi I I LLP
CAsR"ooaoPueooACCOUNTANTS
Report of Independent Auditors
To the Chair and Members of the County Council
County ofHawaii
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, the discretely presented component unit, each major fund. andtheaggregateremainingfund
information of the County of Hawaii, State of Hawaii (the"County") as of and for the year ended June 30,
2011. 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
isto 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 the 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. andtheaggregateremainingfundinformationoftheCounty
as of June 30, 2011, 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 ofAmerica.
In accordance with Government Auditing 8bendands, we have also issued our report dated December 27,
2011, on our consideration of the County's internal control over financial reporting and on our tests of
its compliance with certain provisions of laws, regu|ations, 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 oroncompliance. That report isan integral part ofan 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 schedule of
funding progress for the EUTF on page 87 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, vvedid
not audit the information and express no opinion on it.
999Bzmmmp S,,REET,SUITE 1900
HONOLULU,H/mTAxx968I3
lt,LEP11mNE:808 53I3488FA("]mvM'vE:808 53I3433
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.
Honolulu, Hawaii
December 27, 2011
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M NAGEMENT S DISCUSSION AND ANALYSIS
This section of the County of aai`i' (tie County)Comprehensive Annual Financial Report
presents a narrative overview and analysis of the financial activities of the County for the fiscal
year ended June 3 , 2011. 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$607.4 million
(net assets). This amount includes $40.7 million in unrestricted net assets,an increase of$2.6
million from the prior year.
• The County's total net assets increased by$55.6 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$158.9 million, a decrease of$13.3 million from the prior year.
Approximately 47 percent of this total amount, $74.1 million, is available for spending at the
County's discretion(unrestricted fund balance).
At the end of the current fiscal year, unrestricted fund balance for the general fund was$37.5
million, or 16 percent of total general fund expenditures.
OVERSEW OF THE FI AN UL STATEMENTS
This discussion and analysis is intended to serge 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 tine, 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 by 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 tinning of related cash flows.
Thus,revenues and expenses are reported in this statement for some items that will only result in
cash flaws 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 govemments,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 mar 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-terra 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 govemmental 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 schedules for
the nonmaj or 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 p 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 E1 ahi 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 1s 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 SupylementaEy Information
19_I.I.P.
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 nonmaj r governmental funds and budgetary comparison schedules for the nonmajor special
revenue funds. This supplementary information is presented immediately following the notes to
the basic financial statements.
GG ERNMENT-WE E FINANCIAL ANALYSIS
Condensed Schedule of Net Assets
June 3 ,2011 and 2010
Primary Government
Gov rumental Activities Business-type Activities Total
2011 2010 2011 201 2011 2010
Assets;
Current and other assets 220,271,120 $.220,363,931 $1,057,768 $1,067,909 221,328,888 $221,431,840
Capital assets,net 836,674,103 757,580,639 1,193,198 1,219,361 837,867,301 75 , 0,00
Total assets 1, 5679452223 977,944,570 2,250,966 2,287,2'70 1,059,196,189 98023 1, 4
Liabilities:
Long-terra liabilities
outstanding 421,449,861 39 ,P64, 98 8842232 916,117 422,334,093 398,981,115
Other liabilities 29,058,381 29,061, 94 423,100 385,529 29,481,481 29,446,623
Total liabilities 450,508,242 427,126,092 1,307,332 1,301,646 451,815,574 428,427,739
Net assets:
Invested in capital assets,net
of related debt 514,309,238 469,2357881 308,966 303,244 514,618,204 469,5397125
Restricted 51,840,697 43,958,660 1852087 184,914 52,025,784 44,143,574
Unrestricted 402287,046 37,623,937 449,581 49'7,46 40,736,627 38,121,403
Total net assets $ 606,436,981 $550,818,478 $943,634 $985,6 .4 $607,380,615 $551,8042102
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Analysis of Net Assets
As not earlier,net assets may serve over time as useful indicator of a government's financial
position. In the case of the County, assets exceeded liabilities by$607.4 million at the close of
the most recent fiscal year.
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By far the largest portion of the County's net assets percent)reflects its investment in capital
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assets e.g., land, buildings, infrastructure, and equipment) less any related debt used to acquire
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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 9 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$55.6 million during the current fiscal year,which was
$30.4 million more than the increase during last fiscal gear. Real property tax revenue increased
by approximately$7.0 million,but this was offset by a corresponding increase in expenses of
approximately by$6.8 million. Capital grants and contributions also increased by approximately
$25.3 million relating mostly to highways and streets.
The County's net capital assets increased by$79.1 million clue 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$23.4 million 6 percent)clue
primarily to drawdowns of the State Devolving Fund bans and issuance of bonds,which were
offset by the County's required principal payments on debt from the prig gear. See further
discussion of the increase in long-term debt outstanding on page 22.
� 16 -
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5
Condensed Statement of Activities
1
For the Fiscal Years Ended June ,2011 and 2010
Primary Government
Governmental Activities - Business-type Activities Total
2011 2010 2011 2010 2011 2010
Revenues:
Program revenues:
Charges for services 34,O44,547 35,373,972 372,599 337,982 34,417,146 35,711,954
Operating grants and contributions 50,820,951 49,571,173 133,215 136,802 50,954,166 49,707,975
Capital grants and contributions 38,810,806 13,532,669 - - 38,810,806 132532,669
General revenues
Property taxes 225,055,099 218,037,567 225,055,099 218,037,567
Other taxes 26,315,977 26,016,092 - - 26,3157977 26,016,092
Grants and contributions,unrestricted 19,533,165 17,500,031 - - 19,533,165 17,500,038
Investment earnings 609,617 2,187,266 2,997 1,403 612,614 2,188,669
Other 5,973,275 1,779,2.23 - - 5,973,275 1,779,223
Total revenues 401,163,437 363,998,00 508,811 476,187 401,672,248 364,474,187
Expcuses:
General government 53439,428 6555521278 - - 53,439,428 65,552,278
Public safety 154,008,027 148,115,428 - - 154,008,027 148,115,425
Highways and streets 34,812,165 38,075,835 - - 34,812,165 38,075,835
Health,education and welfare 30,336,420 30,528,977 550,801 590,131 30,887,221 31,119,108
Culture and recreation 227167,818 14,739,755 - - 227167,81 14,739,755
Sanitation 35,604,394 27,527,841 35,604,394 27,527,841
Interest on long-term debt 15,176,682 142120,398 - - 15,1 76,682 14,120,398
Total expenses 345,544,934 338,660,512 550,801 590,131 346,095,735 339,250,643
Increase(decrease)in net assets 55,618,503 25,337,488 (41,990) (113,944) 55,576,513 25,223,544
Net assets at beginning of year 5502818,478 525,480,990 985,624 1,099,568 551,804,102 526,580,558
Net assets at end of year 606,436,911 550,818,478 $ 943,634 985,624 $607,380,615 $551,804,102
Analysis of Changes in Net Assets
Governmental activities. Governmental a. tivlti s increased the Counter's net assets by
$55.6 million n r basically all of the total growth in net assets of the County.
Total revenues increased by$37.2 million 1 0 percent). The County's property taxes increased
by$7.0 million percent)during the year. The increase is attributable to the increase in real
property tax rates and more specifically the rates for apartments,which was offset by another year
of declining assessed values. Capital grants and contributions also increased by approximately
$25.3 million relating mostly to highways and streets projects.
Total expenses increased by$6.9 million 2 percent). The increase was due to the rising cost of
health care,which increased expenses relating to current and fixture health benefits by
approximately$9.4 million.
- 17 -
1
3
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J
f
a
Expenses and Program revenues—Governmental Activities
Year Ended June 3 ,2011
180,000,000
10,000,00
? M Expenses
$140,000,000
$10,000,000 0 Program revenues
$100,000,000
$80,000,000
$60,000,000
$40,0001000
r $201000POOO
0
OPI 0<1
Revenue by Bounce--Governmental Activities
Year Ended June 3 ,2011
Grants and Investment Other,, $5,973,275 Chargesfor
contributions not earnings,
services,
restricted to $609,617 $3400440547
specific programs,
p rating rants
$19,533,165 }
{< and contributions,
$50,820,95x.
Other taxes,
$26.315,977
x�x
Capital grants and
} contributions
$38,810,806
Propertytaxes,
$225,055,099
_ 18 „
i
The charts above illustrate the County's govermnental expenses and revenues by function,and its
revenues by source. As shown,public safety is the largest function in expense(45 percent),
followed by general government(15 percent)and sanitation(10 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 percent),followed by operating grants
a
and contributions 13 percent)and capital grants and contributions(10 percent).
Business-type activities. Business-type activities decreased the County's net assets by$41,990.
Expenses for health,education and welfare account for all of the$550,801 of expenses. Charges
for services were$372,599, operating grants and contributions were $133,215 and investment
earnings were$2,997. Revenues increased by$32,624 due to a$32,858 increase in rental
receipts,which was offset slightly by a$3,587 decrease iii the rental subsidy from the federal
government. Expenses decreased$39,330(7 percent)due primarily to a decrease in general and
administration expenses of$36,437.
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.
Go r m a �f roads. The focus of the County's governmental funds is to provide infonnation
on near-term inflows, outflows, and balances of spendable resources. Such information is useful
in assessing the County's financing requirements. In particular, unrestricted fund balance may
serve as a useful measure of a government's net resources available for spending at the end of the
fiscal year.
As of the end of the current fiscal year,the County's governmental funds reported combined
ending fund balances of$158.9 million, a decrease of$13.3 million in comparison with prior
year. Approximately 47 percent of this total amount($74,1 million)constitutes unrestricted fund
balance. The unrestricted portion of the fund balance is comprised of 1 $48.9 million in
committed fund balance, 2 $18.0 million in assigned fund balance and $7.2 million in
unassigned fund balance. The remainder of the fund balance is divided between$2.8 million in
n nspendable fund balance for inventory and $82.0 million in restricted fund balance.
Approximately 78% of the restricted fund balance is due to restrictions relating to highways,
streets and abandoned vehicles($37.2 million)and debt service($26.6 million).
The general fund is the chief operating fund of the County. At the end of the current fiscal gear,
unrestricted fund balance of the general fund was $37.5 million,while total fund balance
increased to $44.6 million. As a measure of the general fund's liquidity, it may be useful to
compare both unrestricted fund balance and total fund balance to total l fund expenditures.
Unrestricted fund balance represents 16 percent of total general fund expenditures,while total
fund balance represents 19 percent of that same amount.
The fund balance of the County's general fund increased by$ .1 million during the current fiscal
year as opposed to a$20.1 million decrease in the prig year. Ivey factors in this increase are as
follows:
An increase of$6.6 million 13 percent) in intergovernmental revenues. The most significant
cause of the increase was due to n additional$4.9 million in grant revenues relating to
health, education and welfare.
_ fig _
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0 A decrease in revenue from investment earnings of$1.6 million 72 percent)due to the
continuation of low interest rates on investments.
0 A decrease f$6.3 million 16 percent) in general government expenditures due primarily to
a decrease in salaries and wages $3.0 million) as a result of furloughs and pay reductions that
occurred during the fiscal year for two of the four unions.
• A decrease of$3.0 million percent) in public safety expenditures due primarily to
decrease.in salaries and wages ($492,000)resulting from furloughs and pay reductions and
the fact that the prior year's expenditure amounts included the purchase of a rescue helicopter
for the Fire Department 1.4 million)and a contract to improve and update the Police
Department's mapping data 1.0 million).
A decrease of$2.4 million(30 percent)in highways and streets expenditures due primarily to
decreases in expenditures in two of Mass Transit's federal grams ($1.6 million),which is
primarily due to the fact that last year's expenditures included the purchase of additional
buses for the County's fleet.
An increase of$3.2 million percent) in the cost of employees' current and future health
insurance expenditures due to the rising cost of healthcare insurance premiums.
• A.decrease of$3.9 million 32 percent) in capital outlay expenditures, which was the net
result of an additional $ .7 million in expenditures under a federal grant relating to health,
education and welfare and a reduction in expenditures relating to the purchase of land using
the public-access and open space money of$7.4 million.
The fund balance of the County's capital projects fund decreased by$19.0 million during the
current fiscal year. The decrease is primarily clue to the combined total of the fund's main
revenue sources of long-tern debt financing 6.3 million),which consists of proceeds from the
issuance of bonds ($45.0 million),the related premiums on the sale of those bonds .1 million)
and state revolving fund loan proceeds 9.3 million), intergovernmental revenue 15.0 million),
other revenue($4.5 million and transfers in $3.7 million)being less than capital and debt
service expenditures($98.4 million) for the current fiscal year.
Although the fund balance of the capital projects fund was $50.0 million at the end of the current
fiscal year and the total unrestricted portion was $13.9 million,the unassigned portion of the
unrestricted Fund balance was a negative$3.6 million. This was due to 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 every though the project will be allotted so that wort
may begirt.
The debt service funds consist of the Bond Redemption Fund and the Interest Fund. These funds
have combined total fund balances of$26.6 million, all of which is restricted for the payment of
debt service. The net increase in the combined fund balances during the current year in the debt
service funds was $1.2 million 5 percent).
Proprielaryfunds. 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 I ulairna.no at the end of the
year amounted to $593,634, and the unrestricted net deficit of the Ouli Ekahi Affordable Dousing
Project uli ahi) amounted to $144,053. The net assets for Iulairnno decreased by$46,939
and the net assets for Ouli Ekahi increased by$4,949. Other factors concerning the finances of
-20 -
these two-funds have already been addressed in the discussion of the County's business-type
activities.
GENERAL UD BUDGETARY HIGHLIGHTS
Differences between the original budget and the final amended budget were primarily the result
of a$9.6 million increase in appropriations,most of which(93%) 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$3.2 million less
revenues than expected and$23.3 million less expenditures than appropriated. This is primarily
due to the following factors:
0 $2.2 million negative variance in intergovernmental revenue,which was made up almost
entirely of the decrease in federal grants.
0 $16.9 million is due primarily to a decrease in salaries and wages as a result of furloughs and
pay reductions that occurred during the fiscal year for two f the four unions and continued
efforts by each department to control costs during the budget year due to the tough economic
conditions facing the County. Amount consists primarily of variances in the following
functions: general government $4.5 million),public safety $9.8 million),health, education
and welfare 1.1 million)and culture and recreation $1.5 million).
• $2.3 million is due to lever 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.
$1.9 million is due to the fact that the increase in health premiums for employees' was leer
than originally anticipated.
CAPITAL ASSET AND DEBT ADMINISTRATION
ATION
Capital assets, The County's investment in capital assets for its governmental and business-type
activities as of June 30, 2011 amounts to$837.9 million(net of accumulated depreciation). This
investment in capital assets includes land and improvements, buildings and improvements,
equipment,easements, and infrastructure assets,which consists of primarily roads and bridges.
The total increase in the County's investment in capital assets for the current fiscal year was 1
percent.
Major capital asset events during the current fiscal year included the following:
0 Construction continued on the Ane Keohokalole Highway; construction in progress as of the
end of the current fiscal year increased by$13.6 million to reach a total of$15.6 million. _
0 Construction continued on the Kaloko Kale Housing Project and related wastewater treatment
plant; construction in progress as of the end of the current fiscal year for both projects
increased by$9.0 million to reach a total of$9.4 million.
0 Construction continued on the Hon l as and the Queen Liliuokalani large capacity cesspool
projects, construction in progress as of the end of the current fiscal year for both projects
increased by a combined$4.8 million to reach a total of$18.6 million.
{
• Construction continued on Phase II of the Hawaii County Building Improvements Project;
construction in progress as of the end of the current fiscal year had increased by$1.2 million
to reach a total of$22.2 million.
0 Construction continued on the Wai oloa Housing Project; construction in progress as of the
end of the current fiscal year had increased by$3.9 million to reach a total of$35.7 million.
0 Construction continued on the Fahoa Recycling and Transfer Station; construction in progress
as of the end of the current fiscal year had increased by$4.0 million to reach a total of$4.5
million.
0 Construction continued an the West Hawaii Civic Center; construction in progress as of the
end of the current fiscal year had increased by$16.2 million to reach a total of$50.5 million.
• Construction began on the Forth Kona Effluent Meuse Upgrade project; construction in
progress as of the end of the current fiscal year had reached$3.4 million.
• $12.1 million of dedicated roads were received by the County in the current fiscal year.
Capital Assets
(net of depreciation)
As of June 30, 011 and 2010
Primary Government
Governmental Activities Business-type Activities Total
2011 2010 2011 21i 2011 2010
Land and improvements 107,682,08 35,517,270 753,877 753,877 108,435,945 36,271,147
Infrastructure assets 204,755,865 223,637,430 - - 204,755,865 223,637,430
Ground and site improvements - - 71,334 75,089 71,334 75,089
Buildings and improvements 387,2597565 259,595,193 354,345 378,960 387,613,910 259,974,153
Easements 1,649,304 - - - 1,649,304 -
Equipment 52,130,844 54,046,284 13,642 11,435 52,1442486 54,057,719
Construction work in progress 83,196,457 184,784,462 - - 83,196,457 184,784,462
Total 836,674,103 757,580,639 1,193,198 $1,219,361 837,867,301 7 ,8OO, O0
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$301.5 million, Mate Revolving Fund
loans of$3 6.6 million and general obligation bond anticipation motes of$10.0 million. At the end
of the current fiscal year,the County had total bonded debt outstanding of$301.5 million. This
entire amount was comprised of general obligation bonds which are backed by the full faith and
credit of the County.
The County's total bonded debt increased by$26.4 million(10 percent)during the current fiscal
year due to the issuance of bonds which was offset by regularly scheduled principal payments.
At the end of the fiscal year,the County maintained its"AA-"rating from Standard&1 o is and
Fitch and"Aa2"rating from Moody's for general obligation debt.
Mate 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 $3.8 billion, which is in excess of
the County's outstanding general obligation debt. Currently the County's outstanding debt
represents 8 percent of our debt limitation.
- 22 -
i
At the end f the current fiscal year,the County also had notes payable to the U.S. epartm nt of
Agriculture, Farmers Hoene 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 II FACTORS AND NEXT YEAR'S BUDGETS AND RATES
• The unemployment rate for the County for the current fiscal year is at 9.5 percent,which
represents a slight decline from last year's rate for the same period of 10.0 percent. The
statewide unemployment rate is well below the national number.
• The number of visitors to the County for the current fiscal year was 1,322,289,which
represents a 7 percent increase from the previous year's count of 1,234,507.
• Astronomy continues to be a major factor in the success of th County's economy with
an estimated nearly 500 new jobs opening up through 2023 to meet the needs of the
current observatories and the creation of new jobs with the development of the Thirty
Meter Telescope (TWIT) by the TMT Observatory Corporation. The development of the
TMT atop Mauna Idea is progressing as the permit application was approved in February
2011 by the Board of Land and Natural Resources. It is projected that construction will
span over nine years resulting in 3 00 construction i obs and 140 full-three permanent j obs
with an annual estimated budget of$26 million.
0 The construction industry continues to tag in its growth which is evident in the negative
growth regarding construction completed, lower building permits and losses in the
industry's job total.
0 The County's agriculture section offers some growth to the island's economy as cattle
prices have rebounded from 20 10 lows and the Kona coffee crop is expected to be
significantly larger.
These factors were considered in preparing the County's budget for the 2012 fiscal year.
At the end of the current fiscal year,unrestricted fund balance in the general fund was $37.5
million. The County has appropriated$13.9 million of this amount for spending to the 2012
fiscal year budget and it is included in the assigned portion of the fund balance.
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the County's finances for all
those with are interest in the government's finances. Questions conceiving 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.
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BASIC FINANCIAL STATEMENTS
- 25 -
COUNTY OF HAWAII
Statement of Net Assets
June 3 0,2011
Primary Government
Governmental Business-type Component
Activities Activities Total Unit
Assets
Current assets:
Cash and cash equivalents(notes 3 and 14) $ 57,395,151 $ 222,475 $ 57,618,637 $ 18,804,723
Restricted cash and cash equivalents (note 3) 3457515533 34,519 3417855052 -
Investments(notes 3 and 14) 3,4003000 - 3,400,000 -
Restricted investments(note 3) 395952,759 39,952,759 -
Receivables,net(note 4) 49,574,996 1,530 49,5763526 631495716
Receivable from improvement district
(notes 4 and 10) 581449 - 581449 -
Internal balances(note 5) 2,653 (2,653) - -
Inventories 23835,361 - 21835,361 15139,349
Prepaid expenses - 15600 1,600 152,49$
Other 1,216,095 -- 13,216,095 -
Total current assets 18951883007 257,472 189,445,479 26,246,286
Investments (note 3) 5,350,117 6005332 6}9505449 -
Restricted investments (notes 3 and 14) 215659,752 - 215659,752 151904,088
Restricted cash and cash equivalents(note 3) - 1993964 1995964
Receivable from improvement district, excluding
current portion(notes 4 and 10) 35073,244 - 35073,244 -
Deferred charges - - - 305,785
Capital assets(notes 6, 8 and 14):
Utility plant in service,net - - - 20 1,536,911
Infrastructure assets,net 204,755,$65 - 204,755,865 -
Ground and site improvements, net - 71,334 71,334 -
Buildings and improvements, net 357,259,565 3545345 387,6133910 -
Equipment,net 5251305544 135642 525144,486 -
Easements,net 1,649,304 - 136495304 -
Construction work in progress 53,196,457 - 533196,457 64,700,194
Land and improvements 107,682,05$ 753,577 108,4355945 15783,726
Total capital assets,net 536,674,103 1,193,198 $375867,301 26530205$31
Total noncurrent assets 867,757,215 15993,494 569,750,710 287,610,704
Total assets 1,056,945,223 21%2505966 15059,1965159 313,856,990
(Continued)
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COUNTY OF HAWAII
Statement of Net Assets
June 30, 2011
(Concluded)
Primary Government
Governmental Business-type Component
Activities Activities Total Unit
Liabilities
Current liabilities:
Accounts payable and accrued liabilities $ 16,9753068 $ 4183491 $ 173393,559 $ 3,2675437
Deferred revenue(note 7) 2,435,058 45609 254392667 -
Interest due on long-term debt 654153301 - 6,415,301 1,079,541
Bonds and loans payable, current portion net
(notes 10 and 14) 405435,016 33,063 40,45$,079 7,1 055000
Compensated absences, current portion(note 10) 8,504,320 - $35045320 1,4813751
Claims and judgments, current portion
(notes 10, 12 and 14) 2,405,503 - 254055503 54,135
Capital leases, current portion(notes 8 and 10) 1,4365943 -- 1,436,943 -
Landfll costs payable, current portion
(notes 9 and 10) 219,540 - 219,540 -
Customers'deposits - -- - 607,615
Other 332325954 - 3,232,954 -
Total current liabilities $2,0595703 456,163 825515,866 13,595,479
Noncurrent liabilities:
Bonds and loans payable,net
(notes 10 and 14) 3125199,754 8513169 313,050,923 56,2733412
Compensated absences(note 10) 25,3473552 - 25,347,552 1,2445337
Claims and judgments(notes 10) 12 and 14) 8,491,634 - 854915634 187,865
Capital leases(notes 8 and 10) 156205139 - 116201139 -
Landfill costs payable(notes 9 and 10) 2037$9,450 - 205789,460 -
Deferred revenue - - - 13583,953
Customers'deposits - - - 153 517,031
Total noncurrent liabilities 368,448,539 851,169 369,299,708 74,806,598
Total liabilities 450,508,242 13307,332 451,815,574 883402,077
Net Assets
Invested in capital assets,net of related debt 514,3095238 308,966 5145618,204 220,5463,507
Restricted for:
Capital projects 5,9563816 - 51956,816 -
Debt service(note 10) 265614,682 185,087 2637993769 -
Highways,streets and abandoned vehicles 145972,836 - 145972,836 -
Public access open space 3,520,138 - 355201138 -
Other 776,225 - 7753225 -
Unrestricted 403287,045 449,551 405736,627 4,9081405
Total net assets $ 6065436,981 $ 943,634 $ 607,380,615 $2253454,913
See accompanying notes to the basic financial statements.
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COUNTY OF HAWAII
Statement of Activities
For the Fiscal Year Ended June 3 0, 2011
Program Revenues
Operating Capital
Charges for Grants and Grants and
Functions/Programs Exnpenses Services Contributions Contributions
Primary government:
Governmental activities:
General government $ 5334395428 $ 1,856,795 $ 2,609,491 $ 33985,568
Public safety 1545008,427 4,447,120 225119,106 157723940
Highways and streets 34,8125165 93840,983 338083,816 25,5013168
Health, education and welfare 30,3363420 424,107 21073636 404,752
Culture and recreation 2251675818 1,626,178 289,110 556,792
Sanitation 353604,394 15095364 9565792 2,129,286
Interest on long-term debt 153176,682 - - --
Total governmental activities 345,5445934 3470445547 50,8203951 38,810,806
Business-type activities:
Health, education and welfare 5502801 372,599 133,215 -
Total primary government $ 346,0953735 $ 34,417,146 $ 50,9545166 $ 385810,806
Component unit:
Water (note 14) $ 49,526,578 $ 38,211,205 $ - $ 11,582,090
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
Other
Total general revenues
Change in net assets
Net assets, beginning of year
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
$ (44,987,274) $ - $(44,987,274) $ -
(125,665,861) -- (125,668,861) -
4,295,542 .. 4,29802 -
(4,039,925) - (4,039,925) --
(1%695,738) - (19,695,738) -
(16,595,952) - (16,598,952) -
(15,176,682) - (15,176,682) -
(221,568,630) - (221,565,630) -
- (44,987) (44,987) -
(221,865)634 (44,987) (2215913,617) -
- - - 2665717
225,055,099 - 225)055,099 -
%296,852 - 9,2965552 -
9,415,624 - 95415,624 -
7,603,501 - 703,541 -
19,533,165 - 19,533,165 -
60%617 2,997 612,614 185,426
5,973,275 - 5,973,275 -
277,487,133 2,997 277,494,134 188,426
5556183543 (41,994) 55,576,513 4541743
550,818,478 985,624 551,844,142 225,444,174
$ 6463436,951 $ 9435634 $647,354,615 $ 225,454,913
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COUNTY OF HAWAII
Governmental Funds
Balance Sheet
June 30,2011
Bond Other Total
Capital Redemption Governmental Governmental
General Projects Fund Funds Funds
Assets
Cash and cash'equivalents(note 3) $26,267,179 $283598,646 $ 40,036 $ 37,241,833 $ 92,147,694
Investments(note 3) 6,350,117 36,669,752 24,942,759 3,400,000 71,3625628
Receivables,net(note 4) 223855,874 4,101,545 - 2,5563475 29,5135894
Due from other governmental funds(note 5) 847,030 236,474 - 1,057,615 2,141,119
Due from other nongovernmental funds(note 5) 1,303 - - 1,350 2,653
Receivables from other governments(note 4) 14,808,341 3,627,744 - 1,625,017 20,061,102
Inventories 2,835,361 - - - 2,835,361
Other 249,019 - - 846,308 1,095,327
Total assets 524.9$2,795 46,728,598 $219-159"778
Liabilities and Fund Balances
Liabilities:
Accounts payable $ 2,361,956 $ 10,982,851 $ - $ 3,630,261 $ 16,9753068
Due to other governmental funds(note 5) 638,767 796,855 - 705,497 2,141,119
Deferred revenue(note 7) 23,889,601 1,389,333 - 2,594,379 271$873,313
Bond anticipation note payable(note 10) - 10,000,000 - - 1000,00o
Other 2,665,750 48,820 2403000 278,384 3,232,954
Total liabilities __29x556,074 23,217859 _ 240,000 7,208,521 60A222,454
Fund balances:
Nonspendable: Inventory 25835,361 - - - 2,8355361
Restricted for:
Debt service mote 10) - - 245742,795 1,8715887 26,614,682
General and public safety facilities - 7,054,047 - - 7,0543047
Highways,streets and abandoned vehicles - 22,209,912 - 14,972,836 37,182,748
Parks and recreational facilities - 1,614,730 - - 1,614,730
Public access open space 3,520,138 - - - 3,520,138
Other 776,225 5,2735421 - - 63049,646
Committed to:
Budget stabilization 2,104,893 - - - 251 04,893
Disaster and emergencies 5,041,324 - - - 5,041,324
Lower Puna area - - - 35277,820 3,277,820
Rental assistance and subsidy - - - 4,826,134 4,8265134
Sanitation - - - 12,462,532 12,462,532
Self insurance 1,081,410 - - - 1,081,410
Highways,streets and abandoned vehicles - 25553,536 - 15724,703 4,2781239
Parks and recreational facilities 6,3375583 - 86,722 65424,305
Zoning change impact mitigation(fair share) - 4,259,215 - - 4,259,215
Other 5285799 4,323,190 - 297,443 531 492432
Assigned to:
Subsequent year's budget 13,936,000 - - - 133936,000
Other 4,024,596 - - - 43 024,596
Unassigned 10,809,404 (3,609)332} - - 7,2003072
Total fund balances 44,658,150 50,0 16302 24,742,795 3.9,520,077 158,937,324
Total liabilities and fund balances $ 14,2I.4.24 $23.234.161 QU82,795 s - 46.728.598 1.59.778
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, 2011
Total fund balances w governmental funds $ 158,937,324
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 and improvements 107568208
Infrastructure assets, net 204,755)865
Buildings and improvements,net 387,259,565
Equipment, net 52,130,844
Easements, net L649,304
Construction work in progress 8351965457
Total capital assets 836,674,103
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) 25,43 8,25 5
Excess contributions over Other Postemployment Benefit Obligation(OPEB) 120,768
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 (339,503)077)
Interest on long-term debt (6,4151301)
Capital leases (3,057,052)
Compensated absences (33)851)872)
Claims and judgments (10,897)137)
Landfill costs payable (213009,000)
Total long-term liabilities (414,733,469)
Net assets of governmental activities $606,4367951
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 34, 2411
Bond Other Total
Capital Redemption Governmental Governmental
General Projects Fund Funds Funds
Revenues
Property taxes $216,5113276 $ - $ - $ $216,511,276
Public service company taxes 9,296,852 - - - 97296,852
Fuel taxes - -- -- 703,501 7035501
Public utility franchise taxes - - - 93415,624 9,4159624
Licenses and permits 5,724,578 - 9,375,978 15,096,856
Intergovernmental 57152405 14,958,512 - 24,965,144 933748,041
Charges for services 2,474,342 - - 13,942,150 16,4163492
Investment earnings(loss) 624,266 (126,444) - 115785 5493610
Other 2,194,429 4,464,160 - 1,2155490 7,5745079
Total revenues 294,646,128 195296,528 - 62,5293675 3763472,331
Expenditures
Current:
General government 345251,415 - - - 34,251,415
Public safety 99,4263650 - - 5,490,256 104,916,936
Highways and streets 5,7455546 - - 11,368,631 1731143177
Health, education and welfare 656475084 - - 20,199,944 2638477425
Culture and recreation 15,0235489 - - 977,213 16,000,702
Sanitation 7913604 - -- 2756325029 2854233629
Pension and retirement
contributions (note 13) 23,5 90,977 - - 3,692,93 8 27,283,915
Employees'health insurance 23,238,407 - - 1,973,322 25,211,729
Other postemployment benefits 17,307,000 - - - 17,307,000
Other 325015908 - - 1,256,485 4,758,393
Debt service:
Principal 985747 193000,000 21,6945638 1,443,573 42,232,955
Interest 11,833 - -- 145829,442 145541,235
Capital outlay 823973543 79,3845537 - - 87,752,384
Total expenditures 235,0323499 98,384,537 21,6943635 8803,823 44639713497
Excess (deficiency)of revenues
over(under)expenditures 56,613,629 (79,085,449) (21,694,635} (26,334,148} (74,499,160
(Continued)
- 32 -
COUNTY OF HAWAII
Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Fiscal Year Ended June 30,2011
(Concluded)
Bond Other Total
Capital . Redemption Governmental Governmental
General Projects Fund Funds Funds
Other Financing Sources (Uses)
Sale of assets $ 5,767 $ - $ - $ - $ 5,767
Increase in capital leases (notes 8 and 10) 47,112 - - - 47,112
State Revolving Fund loans (note 10) - 9,2562967 - - 9,2565967
Sale of bonds (note 10) - 45,000,000 - - 4500,00o
Premium on bonds(note 10) -- 250785415 - - 21,078,415
Transfers in(note 5) - 337435965 22,8853741 29,469,578 563099,284
Transfers out(note 5) (52,355,319) - - (3,743,965) (56,0995284)
Total other financing sources (uses) ( 603079,347 225885,741 25,7255613 56,3883261
Net change in fund balances 4,311,189 (19,008,662) 1,195,103 (608,535) (14,110,905)
Fund balances at beginning of year 39,518,917 693024,964 2325473692 40,128,612 172,220,185
Increase in reserve for inventories 8283044 -- - - 828,044
Fund balances at end of year $ 445658,150 $505016,302 $2457423,795 $391520,077 $158,9373324
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, 2011
Net change in fund balances - total governmental funds $ (14,110,905)
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 87,634,551
Dedicated and contributed property 1535163152
Depreciation expense and loss on disposals (24 057 239)
Excess of capital outlay over depreciation expense 79,093,464
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 bonds (45,000,000)
Premium on bonds (2,078,415)
State Revolving Fund loans (9,256,967)
Capital leases (47,112)
Total debt proceeds (563382,494)
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 18,5195168
Bond anticipation note principal retirement 19,000,000
State Revolving Fund loan repayments 33171,470
Capital lease payments 1,542,3 20
Total long-term debt repayment 42,232,958
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. 7,5185674
(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, 2011
(Concluded)
Some items reported in the statement of activities do not involve current
financial resources and therefore are not reported as expenditures in
governmental funds. These activities are:
Increase in inventories $ 8283044
Decrease in Other Postemployment Benefit Obligation(OPEB) (3,810,613)
Increase in compensated absences (3,383,732)
Decrease in claims and judgments 4,473,554
Increase in landfill closurelpostclosure care costs (505,000)
Amortization of premium from bond issuance 3321210
Amortization of deferred amount on refunding of bonds (248,721)
Net increase in accrued interest X418,936)
Net additional expenses _ (2,733, 94)
Change in net assets of governmental activities $ 55,618,503
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, 2011
Actual Variance
Original Final (Budgetary Positive
Bud et Budget Basis (Negative)
Revenues:
Taxes and assessments:
Property taxes $ 2175006)691 $ 2170601 $216,51 13276 $ (495,415)
Public service company taxes 8,730,000 8,7301000 9,296,852 5663852
Total taxes and assessments 225,736,691 225,73601 22508,128 713437
Licenses and permits.&
Nonbusiness licenses and permits 3,40609 3,40609 3,117,299 (288,790)
Business licenses 1,438,384 1,438,384 15083,750 (354)634)
Street use 13466,000 154663000 15519,829 53,829
Total licenses and permits 65310,473 6,310,473 5,720,878 (589,595
Intergovernmental:
Federal:
Programs for the aged 2)512,692 2,538,188 1,800,219 (737,969)
Community development block grants - 25983,865 2,5617170 (422,695)
HOME program grant 996,793 1,040,555 433762
Lava enforcement 2,090,800 2,6183493 11666,773 (951,720)
Other 4,276,835 83686,023 8,531,111 (154,912
Total federal 85880,327 17,823,362 155599,828 (2,223,534
State:
State General Fund-Act 185,
SLH 1990 1813235000 18,323,000 19,153)617 830,617
Emergency medical services 14,358,592 14,358,592 14,358,592 -
Gther 4,4935791 455035791 3,710,494 (7935297)
Total State 37,175,3 83 371,185,383 37,222,703 37,320
Total intergovernmental revenue 46,055,710 55085745 525822,531 (23186,214)
Charges for services:
General government 4,0065626 430063626 53465,729 1,459,103
Culture and recreation 1,021,255 150215255 889,295 (131,960)
Highways and streets 293,000 293,000 349,704 56,704
Public safety 1593878 159,878 88,374 (713504)
Total charges for services 5,480,759 5,480,759 6,793,102 1,312,343
Fines and forfeitures 1,796,100 1,796,100 759,568 (1,036,532)
Rents 120,907 120,907 116,482 (4,425)
(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, 2011
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Ne ative�
Revenues (continued):
Interest and penalties $ 1,250,000 $ 1)250,000 $ 6233125 $ (626,875]
Miscellaneous 45647,404 5131 7,433 55207,722 (109,711
Total revenues 291,398,044 3015021,108 297 851,536 _ (33169,572
Expenditures:
Current:
General government:
Finance 103693,045 101693,045 931 34,243 1,558,802
General government building 5,023)211 4,8535211 452285020 6255191
Legislative 2,993,271 2,9933271 2,761,054 2323217
Automotive equipment 4,33%317 434391317 4,3523558 86,759
Law 2,651,059 2,651,059 25284,432 3665627
Research and development 2,969,525 2,977,024 22825,252 1515772
Planning and zoning 25878,548 2,878,548 25619553:2 259,016
Mayor's office 1,429,563 1,4323524 132575064 175,460
Engineering 1,503,209 15473,209 1,324,321 148,888
Information Technology 13319,383 13319,383 1,171,689 1473694
Human Resources 1,757,889 13757,889 1,6533594 104,295
Public works administration 134485440 1,525,925 1,3 87,114 138,815
Elections 1,097,695 1075695 753,169 3443526
Legislative Auditor 723,757 723,757 5815976 141,781
Total general government 40,827,912 40.78155857 3 6,3 3 4,014 43481,843
Public safety:
Police department 52,9685752 53,384,219 4738513792 55532,427
Fire department 3730493032 37,183,220 351367,701 1,815,519
Prosecuting attorney 7,916,022 8,051,524 6,29204 15758,920
Protective inspection 2502507 21055,087 1035999 2515088
Liquor control 13381,184 1,399,184 1,3257316 733868
Flood control 537,440 537,440 469,900 673540
Civil defense agency 1,5981437 1,5983437 1,347,662 250,775
Animal control 1,860,000 1,860,000 13860,000 -
Total public safety 105,33 5,954 106,069,111 96,318,974 9,750,137
Highways and streets:
Mass transit 53753,999 55753,999 5,719,075 34,924
(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, 2011
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Expenditures (continued):
Current(continued):
Health, education and welfare:
Elderly activities $ 3,425,258 $ 3,441,258 $ 33042,988 $ 398,270
Office of Aging 2,4405940 2,4663436 13797,383 669,053
Education 58,500 58,500 561435 2,065
Social programs 1,500,000 1,500,000 13500,000 -
Cemeteries 283,021 283,021 273,645 9,376
Physical examination 1333825 1335825 1233465 103,360
Total health, education and welfare 7,841,544 7,883,040 6,793,916 1,089,124
Culture and recreation:
Community music 276,798 2695298 232,537 36,761
Organized recreation:
Maintenance 6,635,773 6,635,773 63386,159 2493614
Recreation 2,295,147 2,295,147 23176,245 1183902
Aquatics 2,240,118 2,242,118 2,0571357 184,761
Hoolulu Park complex 930,904 9463904 8743825 72,079
Administration 23174,685 2,148,985 1,7135121 435,864
Children's zoo 656,497 666,197 632,400 33,797
Summerllntersession 525,017 525,017 324,918 200,099
Culture and arts 206,839 208,339 193,087 155252
Elderly activities administration 5765805 580,805 4543960 125,845
Total culture and recreation 16,518,583 1625185583 15,0453609 1,472,974
Sanitation:
Environmental management 9085012 908,012 791,599 1161413
Pension and retirement contributions 25,6393502 25,639,502 2353523397 2,287,105
Employees'health insurance 253177,125 2531773125 23,238,407 1,9385718
Other postemployment benefits 17,307,000 17,30700 17,30700 -
Other 4,396,423 4,369,977 256893367 136805610
Total current 249,706,054 2501442,206 2273590,358 22,851,848
(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 345 2011
(Concluded)
Actual Variance
Original Final (Budgetary Positive
Budget Bud et Basis)- _ (Negative)
Expenditures[continued]:
Capital Outlay:
Community Development Block
grants (HUD) $ -- $ 35200,151 $ 25748,573 $ 4515578
HOME Program - 996,793 9575810 383983
Other -- 412755000 4327500 --
Total capital outlay -- 8,471,944 73981,383 490,561
Total expenditures 24937063054 258,914,150 235,5713741 231342,409
Excess of revenues over expenditures 413691,990 4231 06,958 62,279,795 20,172,837
Other financing uses:
Transfers out:
Housing Fund (1,161,187) (1,161,187) (1,161,187) -
Solid waste Fund (13,453,532) (13,453,532) (13,453,532) -
Golf Course Fund (361,379) (361,379) (361,379) -
Sewer Connection Loan Fund (50,000) (50,000) (50,000) -
Sewer Loan Fund (50,000) (50,000) (50,000) -
DisasterlEmergency Fund (100,000) (100,000) (100,000) -
Debt Service Fund (4038295829) 97 (41 262 797) -
Total transfers out (5630053927 (56,438,895} (56,438,895) -
Total other financing uses (565005,22J7 (56,438,895) (56,438,895) -
Excess (deficiency)of revenues and other
sources over(under)expenditures and other uses (14,313,937) (14,331,937) 5,840,900 2031721837
Fund balance at beginning of year 3%518,917 3915185917 3%518,917 -
Fund balance at end of year $ 25,204,980 $ 25,186,980 $ 45,3595817 $20,172,837
See accompanying notes to the basic financial statements.
- 39 -
COUNTY OF HAWAII
Proprietary Funds
Statement of Net Assets
June 30, 2011
Business-type Activities-
Enterprise Funds
Kulaimano Ouli Ekahi
Elderly Affordable
Housing Housing
Jroject Prod ect Total
Assets
Current assets:
Cash and cash equivalents (note 3) $ - $ 222,326 $ 222,326
Restricted cash and cash equivalents (note 3) 11,862 223657 345519
Imprest fund(note 3) 50 100 150
Receivables, net(note 4) 1,455 75 1,530
Prepaid expenses 1,600 - 13600
Total current assets 145967 245,158 260,125
Noncurrent assets:
Restricted cash and cash equivalents (note 3) 185,087 14,877 199,964
Investments (note 3) 6003332 - 600,3 3 2
Capital assets (note 6):
Land and site improvements 511,000 5035877 1,014,877
Buildings and equipment 1,2365856 - 1,236,856
Less accumulated depreciation (150585535) - - _(1,058,535
Total capital assets 689,321 503,877 1,193,198
Total noncurrent assets 154743740 518,754 15993,494
Total assets 1,489,707 763,912 25253,619
Liabilities
Current liabilities:
Accounts payable 3,835 373,795 377,630
Internal balances (note 5) 2,653 - 25653
Due to developer - 7,729 75729
Security deposits payable from restricted assets 115862 21,270 335132
Deferred revenue(note 7) 3,315 1,294 4,609
Notes payable, current portion(note 10) 33,063 - 331063
Total current liabilities 54,728 404,088 4585816
Noncurrent liabilities:
Notes payable (note 10) 851,169 - 851,169
Total liabilities 9055897 4043088 1,309,985
Net Assets
Invested in capital assets, net of related debt (194,911) 503,877 308,966
Restricted for debt service 1853087 - 18507
Unrestricted 5931634 1445053 4493581
Total net assets $ 5835810 $ 3595824 $ 943,634
See accompanying notes to the basic financial statements.
-40 -
COUNTY OF HAWAII
Proprietary Funds
Statement of Revenues, Expenses, and Changes in Fund Net Assets
For the Fiscal Year Ended June 30, 2011
Business-type Activities-
Enterprise Funds
Kulaimano Ouli Ekahi
Elderly Affordable
Housing Housing
Project Project Total
Operating revenues
Rental receipts from tenants $ 10 9,66 8 $ 2553432 $ 3655100
Rental subsidy from federal government-HUD 1333215 -- 133,215
Laundry receipts 2,720 - 2,720
Other - 45779 42779
Total operating revenues 245,603 2603211 505,814
Operating expenses:
Utilities 39,932 295830 69,762
General and administration 1 09,056 117,184 2265240
Maintenance and repairs 50,384 61,146 1113530
Lease expense -- 47,119 477119
Depreciation(note 6) 34,123 - 343123
Total operating expenses 2333495 255,279 4885774
Operating income 12,108 43932 17,040
Nonoperating revenues (expenses):
Investment income 2,980 17 2,997
Interest expense (625027) - (62,027)
Total nonoperating revenues (expenses) (59,047] 17 (59,030)
Change in net assets (46,939) 4,949 (41,990)
Net assets, beginning of year 6305749 3543875 9853624
Net assets, end of year $ 583,810 $ 359,824 $ 9435634
See accompanying notes to the basic financial statements.
-41 -
COUNTY OF HAWAII
Proprietary Funds
Statement of Cash Flows
For the Fiscal Year Ended June 3 03 2011
Business--type Activities-
Enterprlse Funds
Kulaimano Ouli Ekahi
Elderly Affordable
Housing Housing
Project Project Total
Cash Flows from operating Activities
Receipts from tenants $ 112,299 $ 2699669 $ 381,968
Receipts from federal government-HUD 1335215 - 133,215
Payments to suppliers for goods and services _ (187,674) _ (221,951) (409)625)
Net cash provided by operating activities 57,840 47,718 105,558
Cash Flows from Capital and Related Financing Activities
Principal paid on notes payable (31,885) - (31,885)
Interest paid on notes payable (62,027) - (625027)
Purchase of capital assets (7,960) - (73960)
Net cash used in capital and related financing activities _ (101,872) - (101,872)
Cash Flows from Investing Activities
Purchase of investments (600,000) - (600,000)
Proceeds from maturities of investments 600,000 - 600,000
Interest on investments 2,696 22 2,718
Net cash provided by investing activities 23696 22 25718
Net increase(decrease)in cash and cash equivalents (41,336) 47,740 62404
Cash and cash equivalents at beginning of year(including
restricted cash and cash equivalents) 2389335 2129220 4501555
Cash and cash equivalents at end of year(including
restricted cash and cash equivalents) $ 196,999 $ 259,960 $ 456,959
Reconciliation of operating Income to Net Cash
Provided by operating Activities
Operating income $ 121108 $ 4,932 $ 17,040
Adjustments to reconcile operating income to net cash
provided by operating activities:
Depreciation expense 34,123 - 34,123
Change in assets and liabilities:
Receivables,net 63728 85821 155549
Prepaid expenses (28) - (28)
Accounts and other payables 4,932 34,700 393632
Deferred revenue (23) J_ (73 5) (75 8)
Net cash provided by operating activities $ 57,840 $ 47,718 $ 1053558
Supplemental disclosure of cash flow information-Interest paid $ 625027 $ - $ 629027
Noncash investing,capital and financing activities:
Net increase in fair value of investments $ 332 $ - $ 332
See accompanying notes to the basic financial statements.
-42
COUNTY OF HAWAII
Fiduciary Funds
Statement of Fiduciary Net Assets
June 30, 2011
Private-
Purpose Agency
Trusts Funds
Assets
Cash and cash equivalents (note 3) $ 3,728x377 $ 4,270,967
Investments (note 3) 1,0385870 1,586,399
Receivables:
Due from other agency funds - 2,116
Other receivables - 65,521
Total receivables - 671637
Total assets 41,767,247 $ 5,925,003
Liabilities
Due to other agency funds - 2,116
Accrued liabilities - 3,211 5822
Advances payable - 571,051
Assets held for the benefit of improvement districts - 2,1 40,014
Total liabilities - $ 5,925,003
Net Assets
Held in trust for other parties 43767>247
Total net assets $ 45767,247
See accompanying notes to the basic financial statements.
- 43 -
i
COUNTY O1 HAWAII
Fiduciary Fund
Statement of Changes in Fiduciary Net Assets
For the Fiscal Year Ended June 3 O, 2011
Private-
Purpose
Trasts
Additions
Contributions:
Puna Geothermal Venture 50,000
Investment earnings:
Net increase in fair value of investments 268,785
Dividends 54.A91
Interest I , 5
Total additions 3925161
Deductions
Grant payments 273,546
Total deductions 273,546
Change in net assets l 1 , 15
Net assets, beginning of ear 43648,632
It assets, end of year 4,767,247
See accompanying notes to the basic financial statements.
- 44 -
i
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 3 0, 2011
The accounting policies of the County of H wai`i(the County) conform to .S. generally accepted
accounting principles AP 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 A B Statement No. 1 and Statement loo. 3 9,
Determining Whether Certain Organizations Are Component Units (GASB Statement Igo.
39). All organizations, activities or functions that meet the criteria in GASB Statement No.
14 and loo. 39 for inclusion in the reporting entity are included in the County's basic financial
statements.
Primary Government nm 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 Ha ai'i(the State) assumes a full responsibility
for several major functions usually performed by local govrrnnents, including education,
lfarel health and judicial functions. Where 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
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 services performed or provided by the
organization. An organization has a financial benefit or burden relationship with the primary
government if any one of three conditions exist: 1 The primary government is legally
entitled to or can otherwise access the organization's resources; 2 The primary government
is legally obligated or has otherwise assumed the obligation to finance the deficits of, or
provide financial support to,the organization; or The primary government is obligated in
some manner for the debt of the organization.
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COUNTY OF HAWAII
Dotes to the Basic Financial Statements
June 30,2011
As required by GAAP as set forth in GASB Statement 1 . 14 and 1 . 395 these basic
financial statements present the County of Hawaii(the primary government)and its
component unit, the Department of Water Suppler(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 Dote 14 for
component unit disclosures for the Department. Complete financial statements of the
Department can be obtained from the Department of Water Supply, 345 Kel uana a Street,
Suite 20, Hilo, Hawai'i 96720.
Basic Financial Statements
The basic financial statements include both government-wide (based on the County as
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 are a consolidated bans
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 cleft 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
Motes to the Basic Financial Statements
June 30, 2011
The fund financial statements' emphasis is n the major funds in either the governmental or
business-type categories. N nmaj r 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 by 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 fiducia-ry funds are presented in the fund financial statements by type(private
purpose and agency). Since by definition these assets are being held for the benefit of a third
party(private parties, state government,etc.)and cannot be used to address activities or
obligations of the government,these funds are not incorporated into the government-wide
statements.
Government-wide andfma w i a ncia statements—The government-wide financial
statements i.e.,the statement of net assets and the statement of changes in net assets)report
information an all of the n nfldu iary activities of the primary government and its component
unit. The effect of lnterfund 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,rise, 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
i
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 3 O, 2011
statements. Major individual g v nunenta.l funds and major individual enterprise funds are
reported as separate columns in the fund financial statements.
Activities in funds—The in n i l 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 la sif i .ti n within the financial statements.
ASB Statement No. 3 4,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 n nmajor
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 Puna—The general fund is the general operating fund of the County. It is used
to account for all activities of the general government, except those required to be
accounted for in other funds.
Capital Projects Fund—Used to account for the costs of constructing County capital
improvements financed with general obligation bond proceeds, federal and state grants,.
and general and special revenue fund revenues. The capital projects fund is used to
account for financial resources to be used for the acquisition or construction of major
general government capital facilities and infrastructure(other than those financed by
proprietary funds and trust funds)when separate project centers are needed to control
costs.
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 Ekah i 1f f� rc Housing Project—Used to account for the operation of a 3 3-unit
single-family affordable rental housing project located in Waimea.
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COUNTY OF HAWAII
Dotes to the Basic Financial Statements
June 30, 2411
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 MKailua
Subsequent Events
On October 31, 24111 the Improvement District No. 17 Fund was officially closed,with the
last refund paid on August 2,2011.
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.
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I
I
I
COUNTY of HAWAII
Motes to the Basic Financial Statements
June 30, 2011
ModifiedAccrual Basis-Revenues are recorded when susceptible to accrual(that is, both
measurable and available). "Measurable" means the amounts are determinable. "Available"
means the amounts arc collectible within the current period or soon enough thereafter(one
year for intergovernmental revenues)to be used to pay liabilities of the current period.
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. Deal property taxes and State Revolving
Fund loan proceeds are considered available when collected.
In applying the susceptible to accrual concept to intergovernmental revenues,the legal and
contractual requirements of the numerous individual programs are used as guidance. There
are essentially two types of these revenues. In one,monies must be expended on the specific
purpose or project before any amounts will be paid to the County;therefore,revenues are
recognized based upon the expenditures recorded. Most construction grants and many
operating grants fall into this category. In the other, monies are virtually unrestricted as to
purpose of expenditure and are usually revocable only for failure to comply with prescribed
compliance requirements. These resources are reflected as revenues at the time of receipt or
earlier if the susceptible to accrual criteria are met.
The County reports unearned revenue in its fund financial statements(see Note . 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.
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.
_ 5 _
i
COUNTY TY F HAWAII
Notes to the Basic Financial Statements
June 30, 2011
Encumbrances
The general, special revenue, and capital projects funds follow encumbrance accounting
under which purchase orders, contracts and other commitments are recorded as n obligation
of fund balance and provide authority for the carryover of appropriations to the subsequent
year in order to completc these transactions. Encumbrances outstanding at year-end are
included in the respective fund balance categories as appropriate and do not constitute
expenditures or liabilities because the commitments ill be honored during the subsequent
gear.
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 fair value(see Note .
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 arc levied on July 1 each year on assessed valuation as of
,Tanury 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.
Inventories
Inventories consist of materials and supplies and are reported as expenditures at the time of
purchase(purchase method). Police and fire department inventories are stated using the First
in, first out(FIFO)method. Other inventories are stated at average cost.
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i
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 305 2011
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 3 05 2011 of$77 ,22 5 are reflected as a restriction of general fund balance.
Capital Assets
Capital assets,which include property,plant, equipment, and infrastructure assets e.g.,roads,
bridges, curbs and gutters, streets and sidewalks, drainage systems, lighting systems, and
similar items), are reported in the applicable governmental or business-type activities columns
in the government-wide financial statements. Capital assets are defined by the County as
assets with an initial, individual cost of more than l,00 0 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 tyres 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
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.
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COUNTY Y F HAWAII
_=
Notes the Basic Financial Statements
June 30, 2011
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-Fide 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 Hawai`i. Accumulated sick leave at
June 30,2011 totaled $71,500,000 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 Dote . 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 Flan Contributions
The County's contribution to the Employees' Retirement System of the State of Haai`i
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).
Operating Revenues and Expenses
Revenues and expenses are distinguished between operating and nnperating 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
- 53 -
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I
COUNTY OF.HAWAII
Notes to the Basic Financial Statements
1
June 30, 2011
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
nonperating revenues and expenses.
Use of Estimates
The preparation of the basic financial statements in conformity with GAAP requires
management to male 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 an
Governmental 'un d 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 County
implemented this Statement in the fiscal year ended June 3 0,2011.
When both restricted and unrestricted fund balances are available for use, it is the County's
policy to use restricted fund balance first,then unrestricted fund balance. Furthermore,
committed fund balances are reduced first, followed by assigned amounts, and then
unassigned amounts when expenditures are incurred for purposes for which amounts in any of
those unrestricted fund balance classifications can be used.
The County reports the following classifications
Non spendable Fund Balance—Nonspendable fund balances are amounts that cannot be
spent because they are either not in spendable form, or,for legal or contractual reasons,
must be kept intact. The County has inventory included in their nonspendable fiend
balance.
Restricted Fund Balance—Constraints placed on the use of these resources are either
externally unposed by creditors (such as through debt covenants), grantors,contributors
or other governments or are unposed by law(under the Hawaii Devised Statutes or
County of Hawaii Charter).
- 54 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 3 0, 2 011
Committed Fund Balance—Committed Fund Balances are amounts that can only be used
for specific purposes as a result of constraints imp sed by the County Council via
ordinances and the County Code. The committed fund balance of the General Fund
includes the portion of fund balance committed to budget stabilization. The budget
stabilization portion is authorized under County Code §2-19 to 2-223 and additions are
made via the County budget or subsequent budget amendments. The fund balance may
only be used when there is a reduction in budgeted revenue and the director of finances
determines that such use is necessary to prevent a reduction in the level of public
services.
Assigned Fund Balance—Assigned fund balances are amounts that are constrained by
the County's intent but are neither restricted nor committed. The County's only assigned
fund balances are in the General Fund and the rnai ority consists of the portion of fund
balance that is intended to balance the subsequent year's budget.
Unassigned Fund Balance—This is the residual classification of the General Fund and
the Capital Projects Fund. Only the General Fund reports a positive unassigned fund
balance.
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 p ste pl yment benefits " P " measures are reported by are 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.
In December 2010, GASB issued Statement No. 61, The Financial Reporting ,entity.-
Omnibus, an amendment GA'GASB Statements No. 14 and 34 amending the requirements f
Statement Igo. 14, The Financial .Deporting Entity, and Statement Igo. 34, Basic Financial
Statements - and Management's Discussion a d Ana ysis—.fog"State and Local Governments.
This Statement improves the financial reporting for governmental entities,which is comprised
of the primary government and related entities (component units). The Statement amends the
criteria for blending which helps ensure that the primary- govemment includes only those
component units that are so intertwined with the primary government. The provisions of this
statement are effective for the County for periods beginning after June 15, 2012. The County
has not yet determined the effect this Statement will have on its financial statements.
In I ec rnber 2 0 10, GA SB issued Statement No. 62, Codification ofAccounting and Financial
Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICp 1
Pronouncements. This Statement will male it easier for preparers of state and local
g vemment financial statements to find relevant authoritative guidance from one single
i
I
COUNTY TY F HAWAII
Notes to the Basic Financial Statements
June 30. 2011
source. The provisions for this Statement are effective for the County for periods beginning
after December 15 2011. The County has not yet detern fined the effect this Statement will
have on its financial statements.
In June 2011, GASB issued Statement No, 63, Financial Reporting of Deferred Outflows of
Resources, Deferred Inflows of Resources, and Net Position, This Statement provides
financial reporting guidance for deferred outflows of resources and deferred inflows of
resources. The provisions for this Statement are effective for the County for periods
beginning after December 15, 2011. The County has not yet determined the effect this
Statement will have on its financial statements.
STEWARDSHIP, COMIPLIANCE AND ACCOUNTABILITY
Annual Budget
The County follows these procedures in establishing its operating and capital budgets:
•
On or before March I.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 Counter 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 2010-2011 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$9.6 million in the general fund and$4.
million in the special revenue funds. Legally adopted budgets include the General Fund,
Highway Fund, Sewer Fund, Solid Waste Fund, Cemetery Fund,Parking Meter Fund,
Vehicle Disposal Fund,Bikeway Fund, workforce Investment Act Fund, Golf Course
{
i
COUNTY S' OF HAWAII
Dotes to the Basic Financial Statements
June 30, 2011
y
I
Fund, Geothermal Relocation and Community Benefits Fund, Beautification Fund,
Hawaii County 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.
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 charges 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, 2011:
Ending fund balance—GAAP basis $44,15 �l
Encumbrance adjustments;
Beginning encumbrances and unexpended allotments 40970,096
Ending encumbrances and unexpended allotments (4,024,596)
Other adjustments (243,833)
Ending fund balance---Non-GAAP budgetary basis 4513 52,8 1
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1
COUNTY TY F HAWAII
Motes to the Basic Financial Statements
June 30, 2011
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.
Cash
The County maintains a number of checking and savings accounts for various funds and with
various financial institutions. Bank deposits are under the custody of the Director of Finance.
For financial statement reporting purposes, cash and short-term investments consist of cash
and money market accounts. Cash and short-term investments also include repurchase
agreements, certificates of deposit, and government sponsored securities with original
maturities of three months or less.
The carrying amount of the County's deposits(cash,time certificates of deposit, and money
market accounts) as of June 3 0, 2011 was$146,075,461 for the primary government and
$9,585,743 for the fiduciary funds.
Infrr, atin 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 $168,785,567 at June 30,2011. Of that amount, $165,563,241
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$222,326
represent deposits held by a management agent and were uncollateralized. Accordingly,these
deposits were exposed to custodial credit risk. Custodial credit risk is the risk that in the
event of a bank failure,the County's deposits may not be returned to it. For checking
accounts, time certificates of deposit, and repurchase agreements, the County requires, in
accordance with State statutes,that the depository hams 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 %of the County's total funds available for deposit may be
deposited in any one financial institution, in accordance with State statutes.
- 58 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 3 O, 2011
Investments
The County holds investments both for its own benefit and on behalf of some of the fiduciary
funds. The County's investments of funds not required for immediate payments are
predominately comprised of government sponsored securities (equivalent to the rating in U.S.
Treasuries), repurchase agreements and certificates of deposit,while the fiduciary fund also
holds equity securities.
The County's investments and maturities at June 30, 2011 are as follows:
Maturity In years
Fair Value Less than 1 1 -5
Investments—Primary Government:
Certificates of deposit 14, 46,977 13A0000 1,046,977
Repurchase agreements 39,064,291 29,9525759 9,111,532
Government sponsored securities 18345 12692 18245 1,692
71.962.960 S 43.3 52.759 $28,6100201
Investments—Fiduciary Funds:
Certificates of deposit 1135861,399 -- 19586.399
Equity securities S_-_1.038.870
Interest Rate Risk.- The County minimizes its exposure to interest rate risk by limiting the
maturities of investments to five years or less in compliance with state statute. The County's
policy is to hold investments until maturity and sloes not engage in trading for capital gains.
Credit * k.- The County' investment policy limits investments in state and U. Treasury
securities, time certificates of deposit, U.S. government or agency obligations,repurchase
agreements, and money market funds. The investment policy also allows for investments in
other securities that are equivalent to the rating in U.S. Treasuries.
Custodial Kish.* Custodial risk is the risk of loss from the failure of the counterparty,which is
defined as any entity that obtained an investment on behalf of the County. All of the
County's deposits including repurchase agreements are secured by collateral which is kept by
third party custodian. Broker-.dealers utilized by the County are members of the Securities
Investor Protection Corporation, and all investment securities are held in the County's name.
Concentration of Credit Risk.- State lave limits deposits to no more than %of the total in
any one depository, The County seeks to further diversify its portfolio by purchasing from
different issuers, by purchasing different types of investments and by purchasing investments
at different maturities. The County also purchases its investments from a.number of banks
and broker-dealers both located locally and on the mainland.
9
i
COUNTY OF HAWAII
i
Motes to the Basic Financial Statements
June 30, 2011
j
Restricted Cash and Cash Equivalents and Investments
Cash and cash equivalents and investments classified as restricted assets for the primary
government at June 30, 2011 amounted to$96,598,527.
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 $50,767,700 at June 30, 2011.
Cash and investments in the Bond Redemption and Interest Fund are restricted to debt service
related payments and amounted to$26,927,204.
Cash in the Highway Fund and Beautification Fund are restricted to costs incurred relating to
highways and streets and the beautification of such items and amounted to$14,372,777.
The restricted cash in the General Fund was comprised of cash restricted to costs incurred to
administer the liquor commission and cash restricted to the acquisition of lands or property
entitlements for public outdoor recreation and education. Such amounts totaled$776,225 and
$3,520,138,respectively.
Tenant security deposits received by the County for the Kulaimano Elderly Housing Project
and the Ouli E ahi Affordable Housing Project are recorded as restricted assets. Such funds
amounted to 11,862 and$22,657,respectively,at June 3 0,2011.
Restricted amounts set aside by the Kulaimano Elderly Housing Project under its loan
agreement with the Farmers Hone Administration totaled $155,087 at June 30, 2011. This
amount is restricted for debt service, or for other purposes with prior approval from the
Farmers Horne Administration. An operating reserve fund was established by the Ouli B1 ahi
Affordable Housing Project pursuant to an agreement with the developer of the project. This
restricted reserve amounted to $14,877 at June 30, 2011.
_ 60 _
i
COUNTY OF HAWAII
{ Notes to the Basic Financial Statements
June 3 0, 2011
4. RECEIVABLES
Receivables as f.Tune 3 ,2011, 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 Govermnental
Fund Fund Funds Total
Real property taxes $23,974488 -- $ -- $23,974,488
Accounts receivable:
Serer 1,988,273 1,988,273
Solid waste. -- -- 21912,008 239120
Capital projects -- 4,1 1,545 -- 4,1 1,545
Intergoveminental 14,808,341 3,6273744 1,625,017 20,0612102
Gross receivables 38,782,829 7,729,289 635255298 53, 375416
Less; allowance for
uneollectibles .(1,11$,614) 343 806 _L3,462,420)
Net total receivables 37,664.21 $7,7Z2,;2 $4,181 $49,5749996
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.Tune 30,2011, the outstanding balance
of$3,131,693 is reflected in the government-wide statement of net assets as a receivable(see
Mote 10).
Business-type activities:
Enterprise
Funds
Accounts receivable:
Rent $ 2, 3
Other 3 X63
Gross receivables 55,726
Less: allowance for
uncollectibles 54,196
Net total receivables 1.11530
_ 1 -
I
{ COUNTY OF HAWAII
1
- Notes to the Basic Financial Statements
June 30, 2011
5. rN TE FUNID RECETVABLES AND PA ALES
fnterfund receivables and pa abl s consist of the following at June 30,2011:
Receivable Fund Payable Fund Armount
General fund Capital projects fund 402,9 1 0
Other governmental funds 444,120
47, 3
Capital projects fund Other governmental funds 236,474
Other governmental funds General fund 638,767
Capital projects fund 3935945
Other governmental funds 24,903
1,057,615
Total 2 141 11
General fund Enterprise funds $ 1,303
Other governmental funds Enterprise funds 123
Total 2A53
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.tune 3 0, 2011 consisted of the following:
Transfers out:
Other
General Governmental
Fund Funds Total
Transfers in:
Capital projects fund $ -- $35,7433,965 $ 3,743,965
Bond redemption fund 229885,741 -- 22,8 5,741
Other governmental funds 2924693578 29,4695578
2. 319 S3,7439965 $56.099,284
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.
- 62 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
1
1
June 3 0,2011
i
6. CAPITAL ASSETS
Capital asset activity for the year ended June 30,2011 for the Coun ty was as follows.
Balance Balance
July 1, Retirements/ June 30.,
2010 Additions Transfers 2011
Governmental activities:
Capital assets not being depreciated:
Land and
unprovements $ 35,517,270 355713590 68,593,208 $ 10756825068
Easements -- 1,2833221 -- 1,283,221
Construction work in
progress 184,784,462 78,940,490 (180,528,4L5) 83,196,457
Total capital assets not
being depreciated 220,301,732 83,79 ,341 111,935,27 19251,61.746
Capital assets being depreciated:
Buildings and
improvements 319,938,221 1463,3395235 (133491,991) 45297853465
Equipment 11359205197 5,7429563 (120333350) 118,62%410
Easements 4393300 -- 4393,300
Infrastructure 379 063,999 47,362,799 L55,101,2 17 371,325,5811
Total capital assets
being depreciated 812,922,417 199 3,897- (69,626,55,5„) 943,179,756
Less accumulated depreciation for:
Buildings and
improvements (60,343,028) 5,1 82,872) (659525,900)
Equipment (5938735913) (7,4783,458) 853,805 (6634985566)
Basements (73217) -- (73,217)
Infrastructure 155426.569) (11,143,147) (16 ,7166
Total accumulated
depreciation (2"75,643,510) (2328772694) 853,805 (.298,667.399)
Total capital assets
being depreciated,
net 537,278,907 _ 1.76 a ,203 6 ,77 .75 644,512,357
Governmental
activities capital
assets,net $757.580.639 25958014504 0 8 04-0 x.6745.103
- 63 -
i
COUNTY F HAWAII
= Notes to the Basic Financial Statements
1
Jun 3 01P 20 11
Balance Balance
July 1, Retirements/ June 30,
2010 Additions Transfers 2011
Business-type activities:
Capital assets not being depredated:
Land 753,877 -- -- 753,877
Capital assets being depreciated:
Buildings and
improvements 151365008 -- -- 1,1365008
Ground and site
improvements 261,000 261,000
Equipment 98,634 7,9 746 � 100,848
Total capital assets
being depredated 1,49 ,642 '7,960 746 1,497,856
Less accumulated depreciation for:
Buildings and
improvements (757,048) (24,61 __ 7 1fi
Ground and site
improvements 1 85,91 1 33755) (18%666)
Equipment (873199 73 _ , ' (87,206)
Total accumulated
depreciation . 1, ,030,158) (34,123) 5,746 (1,058,535).
Total capital assets
being depreciated,
net 465,484 L26,1.63) 439,321
Bum -type
activities capi
COUNTY OF HAWAII
Dotes to the Basic Financial Statements
June 30, 2011
Depreciation expense was charged to functions/programs of the primary government as
follows:
Governmental a. t1 1tie :
General government 256023948
Public safety 297129562
Highways and streets 12,47, 25
Sanitation 4, ,77
Health, education and welfare 408,011
Culture and recreation 1,648,070
Total depreciation expense—governmental activities S23,8771694
Business-type activities:
Kulaimano Elderly Mousing Project $341.12a
7. DEFERRED REVENUE:
Deferred revenue consists of the following at June 30, 2011:
Governmental activities:
Capital Other Total
General Projects Governmental Governmental
Fund Fund Funds Funds
Real property taxes 2332449569 -- -- 2351244,569
Liquor control revenue 170,170 -- -- 170,170
Sewer revenue -- -- 15056,941 1,056,941
Mousing revenue -- -- 255906 25,9 6
Solid waste revenue __ __ 1,511,532 1,511,532
Intergovernmental 4742862 1389,333 -- 138645195
Total presented in
fund financial
statements 20901 1,389,333 2,594,379 27, 7 , 1
Less adjustments for
accrual of revenues (22,855,874) (22582-381) (25,43 8,255)
Total government-
wide financial
statements 1,0334727 $14389,333 $ 11.99 2.43 5. 5
Business-type activities:
Enterprise
Funds
Unearned rental income
- 65 -
' COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 305 2011
8. LEASES
The County leases machinery and equipment under nncancellalle leases expiring at various
dates through June 2016. 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 $15,410,372 and$7,337,209,respectively,
and the related present value of the remaining obligations under the capital leases amounting
to $3,057,082 at June 3 , 2011 are included in capital assets and long-term debt, respectively.
The County also leases land, office facilities and other equipment under n ncan cllable
operating leases expiring through July 2029, Expenditures for such operating leases were
$2,508,223 for the fiscal year ended Jura 3 , 2011.
The future minimum payments under capital and operating leases at June 30, 2011 are as
follows:
Capital Operating
Leases Leases
Year Ending June 3 :
2012 $1,503,069 $1,713,143
2013 833,974 1,276,640
2014 53 5,812 7815468
2015 297,662 75 7,176
2016 5,234 708,176
2017-2021 -- 1,45 1,275
2022-2026 -- 73,190
2027 -2030 46,731
Total minimum lease payments 3,175,751 8 22
Less amount representing
interest (118!1669)
Obligations under capital leases 7 082
9, SOLID WASTE LANDFILL CLOSURE AND P ST L SU E 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 plane 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 pstelourc care costs in each
operating period. The liability for these costs is included in the government-wide statement
- 66 -
i
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2011
of net assets. The amount recognized each year is based on the landfill capacity used as of
the statement of net assets date. At June 30,2011,the County recognized a liability of
12,733,000, based on the use of % of the estimated capacity of the landfill. wring the
fiscal year ended June 30,2011,there were no expenditures incurred for the closure of the
landfill. The remaining 1,99 , 0 in estimated cost of closure and postel sure care will be
recognized as the remaining estimated capacity is used. The estimated remaining useful life
of the landfill is approximately four years. These amounts are based on what it would cost to
perform the required closure and pstclosure care in 2011. Actual costs at that time may be
higher due to inflation, changes in technology, or changes in regulations.
Landfill capacity estimates are based on volumes going into the landfill subsequent to the last
available engineer's calculation. The volumes going into the landfill do not account for
decomposition, settlement, and corrosion,therefore the estimates are revised when new
0 0
engineering calculations, based on aerial photos and surveys, are available.
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 permuted 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,
speerficatlons and all other information contained therein.
Kealakehe In October 1993,the County closed its I ealal ehe landfill in Iona. Under state
and federal requirements,the County would have to monitor and maintain this site for tern
years from the closure slate. However,the County anticipates monitoring and maintaining the
site for thirty years because there is presently a subterranean fire which requires active
management. The estimated cost of closure and postclosure is $15,850,000, based on what it
would cost to perform the required closure and postclosure care in 2011. Actual costs may be
higher cure to inflation, changes in technology, or changes in regulations. Through
Jane 30,2011, $7,574,000 was spent on closure and postclosure care of the landfill. The
remaining estimated liability of$8,276,000 is included in the government-wide statement of
net assets. During the year ended June 30,2011, $146,000 was spent on closure of the
landfill. The County is providing financial assurance for postelosure care and remedration
through self insurance as explained below.
Pu'ua ac u u Yn 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
calf 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
r mediation, closure or postclosure care. Accordingly,no liability for this landfill is included
in the County's financial statements.
- -
I
s COUNTY OF HAWAII
Dotes to the Basic Financial Statements
.Tune 3 0,2011
Financial ncia ss rac For fiscal year 2011,the County has provided for financial resources
that will be available to provide for closure,postclosure care and r rn diation or containment
of environmental hazards at the above landfills, except Pu`uanahulu. The Environmental
Protection Agency's financial assurance rules include a local government financial test
consisting of a financial component, a public notice component, and a recordeping
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 Nate 14) and an improvement district.
The following is a summary of general obligation bond transactions reported in the
government-vide statement of net assets for the County for the fiscal year ended June 30,
2011:
Bands Issue Bond Balance .Band Balance Due Within
Authorized Amount July 1,2010 Issues Retirements June 30,2011 One Year
1993 lief&PI $86,770,000 16,905,000 $ ($ 5,330,000) 11,575,000 5,630X0
2001 Series A 2370007000 7047348 -- (704,348) -- --
203 Series A 36,310,000 30,345,000 -- (1,610,000) 28,735,000 1,665,000
2004.Series A 30,000,000 26,505,010 (1,235,000) 25,2707000 1,2802000
20041 of Series B 1925452000 12,7352000 -- (1,8902000) 10,845,000 1,975,000
2004 Ref Series C 5,050,140 2,707,244 (507,320) 2,199,924 5217156
2004 PI Series A 277767400 2,3197837 -- (41,317) 2,2'78,520 43,279
2004 P1 Series B 920,000 867,707 -- (14,534) 853,173 15,170
2004 PI Series C 191,093 40,511 -- (40,511) -- --
2006 Series A 25,000,000 222607,500 -- (882,500) 21,725,000 927,500
2007 Series A 55,000,000 79,525,000 (2,905,000) 7 , 2 , 00 3,050,000
2007 Series B 20,820,000 19,1157000 -- {1,790,000} 17,325,000 1,855,000
2007 Series C 10,787,388 10,787,388 10,787,388 795,684
2008 Series A 5070007000 5070007000 -- (17665,000) 48,335,000 1,735,000
2010 Series A 26,493,750 -- 26,493,750 2 ,493,750
2010 Series B 1 8,506 250 18,506250 -- 18.506.250 --
441,170,021 2'75,164,535 4570011,1100 (18,6152530) 301,549,005 19,492,789
Add unamortied
premium 7,683,432 4,217,931 2,078,415 (332,210) 5,964,136 384,171
Less deferred amount
on refunding ^(2,828,759) (1,6825 3 -- 248321 (1,433,635)
446.024.694 47.07 .415 ( 1 .699.019 X306,079,506 1 ,. . ;
The 2010 Series B bonds were issued as bonds designated as"Recovery Zone Economic
Development Bonds"under the American Recovery and Reinvestment Act of 2009. The
- -
COUNTY OF HAWAII
i
Notes to the Basic Financial Statements
June 30, 2011
County will receive a cash subsidy payment from the United States Treasury equal to % of
the interest payable on the Series B bonds.
General obligation bonds payable reported on the government-wide statement of net assets at
June ,2011 are comprised of the following individual issues:
Public improvem nt PI and/or refunding bonds:
1 993 Refunding and PI at 5.6%, due through 2013 1L57500
2003 Series A at 2.5%to 5.125%, due through 2023 2857355000
2004 Series A at 3.25%to 5.25%, due through 2024 255270,000
2004 Refunding Series B at 3.5%to 5.0%, due through 2015 103,845,000
2004 Refunding Series C at 3.25%to 3.7%, due through 2014 23199,924
2004 PI Series A at 4.75%, duc through 2037 29278,520
2004 P1 Series B at 4.375%, due through 2039 8535173
2006 Series A at 4.0%to 5.0%, due through 2026 2137253000
2007 Series A at 4.0%to 5.0%, due through 2027 7696205000
2007 Series B at 3.75%to 5.0%,due through 2018 1753253,000
2007 Series C at 4.0%to 5.0%, due through 2021 103,7873388
2008 Series A at 4.0%to 6.0%, due through 2028 48,33500
2010 Series A at 1.7%to 5. %, due through 203 . 26,493,750
20 10 Series B at 3.335%to 6.1%, due through 2030 1&5060250
Total general obligation bonds payable 301.5490005
Annual debt service requirements to maturity for the above general obligation bonds are as
follows:
Governmental Activities
Fiscal year ending,Tune 3 Principal Interest
2012 $ 1994925789 $ 14,144,536
2013 20A015566 13,163,874
2014 15,115,470 12,176,281
2015 17,7735630 11,457,512
2016 18,014,007 10,608,543
2017-2021 84567891 41,003,713
2022-2426 83,8535048 20,700558
2027—2031 40,952,168 305,232
2032—2036 7969892 204572
2037—2040 471,255 30,499
Total 3019549.00 127.3 85.320
- 69 -
1
I
COUNTY OF HAWAII
Notes to the Basic Financial Statements
1
June 3 0, 2011
Bond Premiums
At June 30,,2011 total unam rtiz d bond premiums were $5,964,136, which are being
a
amortized over the remaining life of the respective bond issues.
Bonds Authorized and Unissued
The County Council has authorized the issuance of$265.1 million in general obligation bonds
to finance specified capital improvement projects. At June 3 0,2011, $130.1 million was not
yet issued.
General Obligation Bond Anticipation Notes
In March 2011,the County issued a general obligation bond anticipation note(BAIL) in the
total amount of$10,000,000. These notes were issued to provide funds for the acquisition
and construction of major capital facilities and bear interest at 1.22%and had an original
maturity date of September 2, 2011. The note was then renewed and an additional
$15,000,000 was issued with a maturity date of March 2, 2012. Since the renewed BAIL has
maturity date within 12 months of fiscal year end,the 10,004,000 of debt is reflected as
current 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 Jun
30, 2011:
Issue Balance Balance
Authorized Amount July 1,2010 Issues Retirements June 30,2011
2010 Series A 5,000,000 5,000,000 __ 5,000,000 20 10 Series A 1070007000 10,000,000 -- 10,000,000 --
010 Series A 4,000,000 4,000,000 4,000,000
2011 Series B 1 0,000,000 -- 10.000,000 -- 1 0,000.000
$29,000*000 $19,OOOFOOO 10,D00lp000 $19,000M 10.0001D00
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 find 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 twenty projects
approved for funding with these loans.
. 70 .
i
COUNTY OF HAWAII
-
Notes to the Basic Financial Statements
June 30, 2011
The schedule below shows the County's SRF transactions for the fiscal year ended June 30,
2011:
Loans Approved Loan Balance Loan Balance Due Within
Authorized Amount July 1,2010 Additions Retirements June 3 .2011 One Year
Hilo WWTP $12,724,311 $2,359,160 $ -- 767,051) $1,592,109 786,227
Waiakea Mill 1,300,000 31 6,207 -- (76,148) 240,059 78,052
Waiakea
Huselots 459,321 85,508 (27,802.) 57,706 28,497
Waiaka
Houselots II 5,0247266 2,707,583 (270,761) 2,436,822 277,881
ina o A&B 22239,174 595,024 -- (127,484) 467,540 130,124
Kalanianaole 1,499,944 5207969 -- (88,710) 432,259 91,408
Ialanianaole 1H I,615,980 1,270,044 (74,351) 1,195,693 76,126
Alii Drive A&B 3,210,243 812,290 -- (194,254) 618,036 199,691
AM Drive C&D 3,7807000 122232292 (212,507) 1,010,785 216,905
Alii Drive BF 221122654 819,530 -- (126,259) 6932271 130,100
Waiaha Bay 3,697,893 1,2527512 -- (213,742) 1,038,770 219,725
Bala ehe I,300,071 315,632 -- (76,010) 239,622 77,910
Holualoa Bay 3,080,000 1,246,503 -- (176,286) 1,070,217 181,651
Paukaa CCS 2,143,448 1,128,752 -- (113,843) 1,014,909 116,525
Cesspool
Conversion 8,363,773 7,235,884 -- (4212789) 62814,095 423,829
Pahoehoe 2,817,760 1,763,189 -- (140,844) 1,629,045 1447548
omohana Hts
LCC-ARRA 1,085,800 997,091 88,709 -- 1,085,800 1,085,800
Honokaa L
ARRA 5,332,346 22133,074 2,932,655 -- 570657729 5,065,729
Queen
Liliuokalani
L -ARRA 1,0 19,929 1,019,929 -- -- 12019,929 1,0 19,929
Queen
Liliuokalani 10,186.277 2,660,894 6,235,603 (63,629) 8,832.868 456,117
S72P993F 190, $30469,767 ($30171,4M- $36,555,264 &M, D
The loans bear interest at 0.50%to 3.02%, exclusive of a 1.00%loan fee for all roam 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 "ARR "designation are
interest free With principal forgiveness upon the County's fulfillment of certain conditions.
- '7 1 -
5
1
COUNTY OF HAWAII
i
Notes to the Basic Financial Statements
,tune 30, 2011
Debt service to maturity for disbursements to date on these projects are as follows:
vemm ntal Activities
Fiscal year.ending June 30: Principal Interest
2012 10,806,777 708,870
2013 35699,247 631,917
2014 2,922,625 472,524
2015 2,524,278 375,611
2016 2,207,206 286,792
2017-2021 7,293,317 632,353
2022.-2026 4,956,874 199,535
2027—2030 221443940 33,115
Total $36,555.264 $3,340!,717
Subsequent Events
On August 22, 2011, the Mate of Hawaii forgave portions of the principal amounts for the
Kom hana Heights Large Capacity Cesspool Replacement and Queen Liliu l a.lani Large
Capacity Cesspool Replacement ement loans that related to the American recovery and
Reinvestment Act A because the County had complied with all of the requirements.
These amounts totaled$1,085,800 and$1,019,929, respectively.
Other General Long-Term Obligations
The following is a summary of other general long-term obligations transactions for the fiscal
year ended June 30, 2011:
Balance Balance Due Within
July 1,_ 0.10 Additions* Payments June 30,2011 One Year
Governmental activities:
Compensated absences $3034683140 $12,6533429 ($93269,197) $33,851,872 $8,504,320
Claims and judgments
(see Note 12) 15,370,691 (444,1 5) (4,029,389) 103,8975137 25405,503
Capital leases
(see Note 455525290 475112 (1,542,320) 3,057,082 1,4365943
Landfill costs payable /� [� f /'y }�}� f� }�
(see Note 9 20,504.,000 65 1.448 Y,14 y44 21,00 ,000 .219,540
Total $7 ,895,1.2.1 1120 #824 ($14,M.854) $%815,091 125566306
Net of ne claims liability and existing claims resolved at less than previous estimate.
� 72 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 3 0, 2011
Fund Balances-Debt Service Funds
The fund balance in the debt service funds at June 30, 2011 includes$24,742,795,which is
available for principal payments on general obligation bonds and$1,871,887,which is
reserved for the payment of interest On the bonds.
Enterprise Fund Notes Payable
The Kulaimano Elderly Housing Project Protect is indebted t0 the U.S. Department of
Agriculture,Farmers Hone Administration on two notes payable with balances aggregating
$884,232 at June 30, 2011. The notes,which mature in September 2029, are repayable in
monthly installments of$7,826 including interest and are collateralized by substantially all Of
the Project's property and equipment. Although the stated annual rate of interest on the notes
is 9%, such rate is reduced t0 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
pad of the units within the Protect.
The following is a summary of enterprise fund notes payable transactions for the fiscal year
ended June 30,2011:
Balance at July 1, 2010 $916,117
Deductions Q 1 885)
Balance at June 30, 2011 884,232
Less current portion (3 35063)
Note payable,net of
current portion S 8 5 1=,-1 6 9
The following is a summary Of the annual maturities for the enterprise fund notes payable:
Business-type Activities
Fiscal year ending,Tune 30: Principal Interest y .
2012 33,063 $ 60,849
2013 35,453 58,459
2014 38,016 55,896
2015 409764 53,148
2016 43,711 50,201
2017-2021 270,778 19 ,782
2022-2026 3 83,862 8508
2027—2030 380585 677
Total 884 232 $563J1
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2011
a
Special Assessment Bonds
In 2011 the County retired its outstanding special assessment bonds for one improvement
district. In 1991,the County issued $14 million of special assessment bonds for Improvement
District No. 17, Kalo o Subdivision,to finance a roadway and water system. In 2001,the
County refunded the remaining bonds outstanding of$6,3 70,000. The bonds natured
annually through 2011 and bore interest at 7.375%. The remaining balance of$1,715,000
was paid during the current Fiscal year.
These were not general obligation bonds and the County was not obligated in any manner for
the repayment of these bonds. The bonds were secured by a first lien on the lard benefited by
the improvements, and were to be repaid from the annual assessments levied against the
owners of the land. The County acted as an agent for the property owners within the
improvement districts to collect assessments receivable, forward payments to bond-paying
agents at appropriate dates and, if required, administer foreclosure proceedings. Accordingly,
these bonds were not reflected on the County's government-wide statement of net assets.
The County has issued general obligation bonds on behalf of Improvement District No. 18 for
water improvements (see Note . 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
4.3 7 5%to 4.75%. Total general obligation bonds payable included in the gov mment-wide
statement of net assets were$3,131,693 at June 3 01 2011.
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
are 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,
C a.st l w wond ervl ew water hnprovem nts, for the fiscal year ended June 3 0, 2 11:
Balance at July 1, 2010 $3,2289055
Deductions 9 3 2
Balance at June 3 , 2011 $3,13 1
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COUNTY OF HAW IT
Notes to the Basic Financial Statements
June 3 0, 2011
The following is a summary of the annual maturities for the improvement district general
obligation bonds:
Fiscal year ending June 3 : Prineipa Interest
2012 8,449 144,196
2013 61,168 141,413
2014 64,O 14 138,502
2015 66,993 13 5,454
2016 701111 1325263
2017-2021 402,643 608,009
2022—2026 505,500 502,758
2027—2031 63408 3705577
2032—2036 796,892 2045572
2037—2040 471255 30,499
Total $3 1 3A,693. $22408241
11, COMMITMENTS AND CONTINGENCIES
Contractual cor r i m — Contractual commitments for capital projects, expenses, and
supplies at June 30,2011, except in the enterprise funds, are reflected in the balance sheets as
a part of the respective fund balance categories and,are as follows:
General fund $ 4,0245596
Capital projects fund 29,143,442
Nonmajor funds 73634,005
$40.802, 43
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 r a.terial..
'lain — 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 Counter's Corporation Counsel,
the resolution of such matters will not have a material adverse affect on the financial
condition of the County.
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COUNTY OF HAWAII
--
Notes to the Basic Financial Statements
June 30, 2011
1 compliance—The County has entered into two stipulated agreements r 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 t0 curb cuts,the County,with the help Of a consultant,surveyed 669 intersections,
then ranked then, to 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 .2
million. The cost Of the first phase of the plan was 3 million,to be used in high priority
areas such as government facilities, schools, and hospitals. The remaining cost will cover
curb cuts at parks and in low-density single family presidential areas. All corrective action
was t0 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 t0 require contracting by July 2005, rather than
completion by that date. Pursuant t0 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 Dona at a total cost of close to 4. million.
The County will be seeking closure Of this natter with the federal district court by the end Of
March 2012. 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 Parrs
Department). The agreement required the Parks Department to establish practices,policies
and procedures regarding its programs, and prepare a transition plan by the middy of the year
2000. The serf-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 initial(1997-2000) estimated cost of the facilities
repairs was $15.1 million,which would have been spent Over the 12-year period. Funding
allocated initially for facilities repairs was $17.5 million, with another million of federal
funding anticipated through community development block grants over the next 2 years.
Since 2000,the Department of Parrs and Recreation has requested 2 to 3 million a year for
the different park facilities' ADA projects. The Department of Public Works s 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
. 76 .
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 3 O, 2011
and scheduling of thie 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 ALFA 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 A . The County had spent$42.0 million for the
construction and design fees to complete 50 park facilities(some having multiple ADA wort
being completed). There are four park facilities where construction has progressed; 30 parr
facilities that must be completed; and the Parrs estimated costs for completion is $15.1
million. The Court and parties are working on establishing a reasonable four year tim line to
complete the remaining ADA work. In addition,the County's A A coordinator(Equal
Opportunity Officer)has access to an identifiable account of at least$50,000 to handle
requests for reasonable accommodations for County departments; and the procedures for
these requests have been finalized and are available on The County's ADA web page.
12. RIS 1IA AGEMENT
The County is exposed to various rids 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, liability coverage on transit buses and
privately owned police vehicles, and property damage coverage on County Police fleet
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 liab.illty. 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 tBNR . Claim liabilities, including IBNR,are based on the
estimated ltimate 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 11BNR are based on historical experience. The liability for claims and judgments
is reported on the government-wide statement of net assets. At June 30, 2011,the amount of
this liability was $10,897,137. This is the County's best estimate based on available
information. Changes in the reported liability since June 30, 2009 are given below.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2011
General Workers' Total
Liability Compensation Liabilily
Balance at July 1, 2009 $ 6,4465770 11,2303,939 $179677,709
Incurred claims(including 1BINR)* (1,015,017) 25652M4 1,637,767
Claim payments 1,292,01 (2,652,784) (3X944178��)
Balance at June 3 , 20 1 $ 4,1 39,752 $ 11,230,939 $15,3705691
Incurred claims(including iBNR)* (993,836) 549,671 (444,165)
Claim payments (1,477,017) 2 552 X72 (4,029,389)
Balance at June 30, 2011 S 1.668.899 9922&23 1 4137
`Net of new claims liability and existing claims resolved at less than previous estimate.
13. EMPLOYEE BENEFIT PLANS
Pension Flan
Flan description All eligible employees of the County are required by Chapter 88 of the
Ha ai'i Revised Statutes(H RS)to become members of the Employees' Retirement System of
the State of Hawai`i (the BF , a cost-sharing multiple-employer defined benefit pension
plan. The E S 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,IRS, 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 Jane 30, 1984 were given the option of joining the
noncontributory plan or remaining in the contributory plan. All new employees hired after
June 3 , 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 gears 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 becarne
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2011
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 postretirernent 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.).
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 rule contributions for these members. Linder 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 %of AFC. These
members may retire at age 5 5 with 10 years of credited service or at any age with 2
years of credited service, provided the last 5 years of credited service is in any of the
qualified occupations.
Hybrid r i Plan n 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 5 5 and 3 o years of credited service or age 5 5 and 2
years of credited service with reduced benefits. The benefit multiplier used to calculate
retirement benefits is 1.25%.
The ERS funding policy provides for periodic employer contributions at actuarially
determined gates, expressed as a percentage of annual covered payroll, such that the employer
, 9
COUNTY OF HAWAII
Dotes to the Basic Financial Statements
June 30, 2011
contributions, along with employee contributions and are 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 sot by statute used on the
recommendation of the ERS actuary resulting from an experience study conducted every five
years.
The required pension contributions by the County for the years ended June 3 0,2011,201 ,
and 2009 were$21,43 5,798, $22,127,289,and $22,334,894, 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 Mate of Ha. ai`1, 201 Merchant Street, Suite 1400,
Honolulu,Ha wa.N 96813.
Post-Retirement Benefits
In addition to providing pension benefits,the County is required by state statute(HRS
Chapter 'A to contribute to the Hawa.i`i 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 o% of the
monthly premium for employees retiring with fewer than 10 years of credited service. The
current(pay-as-you-go)premium costs are paid by the respective funds but the net other
postemployment benefit obligation is paid by the General Fund.
For employees hired after June 3 0, 1996, and who retire with fewer than 10 years of service,
the County gales no contributions. For those retiring with at least 10 years but fewer than 1
years of service, the County pays 5 0%of the retired employees'monthly Medicare or non-
Medicare premium. For employees hired after June 30, 1996, and who retire with at least 1
years but fewer than 25 years of service,the County pays % of the retired employees'
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2011
a
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 3 0, 200 1, and who retire with fewer than 10 years of service,
the County males no contributions. For those retiring with at least 10 years but fewer than 1
years of service,the County pays 0%of the retired employees' monthly Medicare or non-
Medicare premium.based on the self-plan. For employees hired after June 30,2001, and who
retire with at least 15 years but fewer than.25 years of service,the County pays 75%of the
retired employees' monthly Medicare or non-Medicare premium; for those retiring with over
25 years of service,the County pays the entire healthcare premium.
For active employees,the employee's contributions are based upon negotiated collective
bargaining agreements. Employer contributions for employees not covered by collective
bargaining agreements and for retirees are prescribed by the HRS.
The County's annual other p st mpl yment benefit PE 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 N . 4 ,Accounting and Financial Reporting by Employers,for Postemployment
Benefits Other than Pensions (GAS Statement No. 4 . GASB Statement N . 45 addresses
the failure of previous financial reporting practices to measure and recognize the cost of
PEB 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 ever normal cost each year and amortize any unfunded actuarial
liabilities r funding excess)over a period not to exceed thirty 3 0 years. The current ARC
rate is 27.5% of annual covered payroll.
The following section shows the County's Annual OPEB cost for the year ended June 30,
2411,the amount actually contributed to the plan, and changes in the net OPEB asset:
Annual required contribution $34,969,000
Interest on net OPEB obligation (276,000)
Adjustment to annual required contribution 22 , 0
Annual OPEB Cost 3459135000
Contributions made 3151025387
Decrease in net OPEB asset 3,810,613
Net OPEB asset-beginning of year _ (3,931,381)
Net OPEB asset-end of year ($120�76�)
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COUNTY OF HAWAII
i
Notes to the Basic Financial Statements
June 3 0, 2011
The annual OPBB cost,the percentage of annual OPEB cost contributed to the plan, and the
net OPEB asset for the year ended June 30, 2011 and the preceding years were as follows;
Percentage of Annual
Fiscal Year OPEB Cost Net OPEB
Ended Annual OPEB Cost Contributed Asset
June 3 .,2009 $23A2600, 00 1 02.9% 116)
June 30, 2010 $25X3,9000 109.1% ($359313,381)
June 30, 2011 $34M39000 89.1% ($120.9768)
The schedule of funding progress based on the actuarial valuation date of July 1, 2009, is as
follows:
Actuarial accrued liability $43 ,225,000
Actuarial value of plan assets 2 , 1 ,E
Unfunded actuarial accrued liability(UAAL)
Funded ratio 7%
Covered payroll (active plan members) $13 3, 55, o
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 member 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 plant 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 and a 3.0% inflation rate, The UAAIL is being amortized
as a level percentage of projected payroll on are 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.
2
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 3 �2011
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.hawall.gov or by contacting them at F.O. Box 2121,Honolulu, ICI 96805-2121.
Deferred Compensation Plan
County employees are permitted to participate in a deferred compensation plan of the State of
Thai'i, 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
Band 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 tryst fund to protect there 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 clue to the investment or failure of investment of funds
and assets in the plans,but cues have the duty of due care that would be required f 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, 2011, cash,time certificates of deposit and money market funds of$34,708,811,
with bank balances of 5,389,258 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
$15,904,088 at June 30, 2011. At June 3 ,2011,the Department's investment portfolio
consists of certificates of deposit.
Capital Assets
The Department began operations as of January 1, 1950. At that slate, 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
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 3 , 2011
direct and indirect costs. Construction period interest is capitalized on utility plan constructed
with tax-exempt debt.
Depreciation n n the Department's utility plant assets in service is computed rising 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 3 0, 2 011 were as fellows:
Utility plant in service $3665730,898
Less: accumulated depreciation (165,193,987
2013536,911
Land and rights 173,72
Construction work in progress 64,7005194
Net capital assets S268,02%831
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 $45,366,098
at June 30, 2011.
General obligation bonds payable issued on behalf of the Department and other long-tern
debt at June 3 ,2011 are comprised of the following:
Public improvement bonds:
1993 Series A at 2.5%to 5.6%, due through 2013 $ L62500
2004 Series D at 4.5%, due through 2039 240,775
2006 Series A at 4.0%to 5.0%, due through 2026 2157255000
2005 Series A at 4.125%, due through 2043 144,830
2010 Series A at 3.33%to .1 0, due through 2030 9,5155706
2010 Series B at 3.3 3%to .1° , due through 203 0 .. ,1 0'7,.099
Total public improvement bonds 39,425,41
Public improvement refunding bonds:
2004 Series at 2.0%to 5.25%, due through 2015 185,076
2007 Series at 4.0%to 5.0%, due through 2021 5:752,612
Total public improvement refunding bonds 51937,688
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 3 , 2011
Revolving fund loans:
State revolving fund loan, interest up to 1.37%..,
due through 2030 14,9064339
American recovery and Reinvestment Act State revolving
fund loan, interest free,with total principal forgiveness
upon fulfillment of conditions 3,947,975
Total revolving Fund loans 18,012,314
Total $63,378.412
At June 3 O, 2011, future principal payments for long-terra debt are scheduled as follows:
Fiscal year ending June 30:
2012 7,1 053000
2013 35274,
2014 2,5155000
2015 3,247,000
2016 39307NO
2017-2021 18520
2022—2026 163647.9000
2027—2031 8,832,
2032—2036 833,000
2037—2041 87,000
2042—2043 1 412
Total 63.378.4 12
Contributions in Aid of Construction
The Department recognized$11,582,090 of contributions in aid of construction as
nonoperating revenues for the fiscal year ended June 3 , 2011.
Commitments nd Contingent Liabilities
Claims i a nd, d m —The Department maintains property, auto liability, and general
liability insurance policies. The Department remains self-insured for workers' compensation
and other perils. The lability at June 30, 2011 for workers' compensation claims of
$242,000 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 $21,758,000 at
June 30,2011.
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COUNTY F HAWAII
- Its to the Basic Financial Statements
June 30, 2011
Post-Retirement Benefits
Effective July 1, 2007, the Department adopted the provisions of GASB Statement No. 45.
This statement addresses how state and local g vemm nts should account for and report their
costs and obligations related to p st mploym nt benefits,healthcare, and other nonp nsi n
benefits. The Department's annual required contribution for its postemployment benefit
obligation for the year ended June 3 0, 2011 was $2,3 19,000 with interest and adjustments of
($18,000)and $14,000, respectively. The Department made contributions of$2,069,000
during the year ended June 30, 2011 and recorded a postemployment benefit asset of$4,000
at.dune 30,2011.
i
COUNTY OF HAWAII
i
Required Supplementary Information
June 3 0,2011
Schedule of Funding Progress for the FTF
(In thousands)
Actuarial
Accrued UAAL as
Actuarial Liability Unfunded Percentage
Actuarial Value of (AAL)— AAL Funded Covered of Covered
Valuation Assets Entry Age UAAL Ratio Payroll Payroll
Late �.�. _ b (b-a _ b-ac
July 1, 2007 - $275X8 $275,825 - 127,420 216.5%
July 1, 2009 $25,514 $439,225 $4103,411 6.6% $133,555 307.3%
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NONMAJOR GOVERNMENTAL F N S
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 tars.
SEWER FUNS -Used to account for costs of operating the County's various sewer systems. Financing is
provided by charges to users for sewer services,
SOLID WASTE FUND—Used to accumulate moneys for the operation,maintenance,and administration of
the County's solid waste management,collection and disposal systems. Financing is provided by tipping
fees at the landfills and by disposal permit fees.
CEMETERY FTC N -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
parting areas. Financing is provided by the proceeds from parking meters,
VEHICLE DISPOSAL FIND-Used to accumulate moneys for the towing,removal, disposal and recycling
of abandoned or discarded automobiles and automobile parts. Financing is provided by annual fees
collected with motor vehicle registrations.
BIKEWAY FIND-Used to accumulate moneys for the construction of bikeways within the County.
Financing is provided by bicycle license fees.
WORKFORCE INVESTMENT ACT FUN -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.
GE 0 THERM4 L REL 0 CA TION A N MM UNITY BENEFITS F UND-Used t account for the County's
share of geothermal resource royalties received from the operator of a geoth rna l power plant located in the
County. The funds are earmarked for a geothermal relocation program and to benefit the lower Puna.area.
BRA UTIFICA TION FUND-Used to accumulate moneys for the beautification of highways and disposal of
abandoned vehicles within the Couay. Financing is provided by assessments on vehicle registrations.
HAWAII CO UN7-Y HO USING AGENCY-Used to account for Federal and County moneys used to provide
public housing assistance within the County.
ARK DEDICATION FUND-Used to account for moneys deposited with the County by subdividers to
provide land for parrs and playgrounds in subdivisions.
DEBT SERVICE F1
INTEREST FIND-Vsed 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
N nm jor Governmental Funds
Combining Balance Sheet
June 3 , 2011
Special Revenue Funds
Solid Parting
Highway Sewer Waste Cemetery Meter
Fund Fund Fund Fund Fund
Assets
Cash and cash equivalents $139248.9630 $ 5,548,541 8,3635666 $ 849,659 1 735679
Investments - - - -
Impre t fund - 400 250 - -
Receivables:
Due from other governments 80,278 49254 6185,798 - -
Due from Other governmental funds 971,155 8,993 11,346 � -
Due from other nongovernmental funds - 1,350 - - -
Trade,net of allowance for doubtful accounts - 15,056,941 1,499,534 - -
Other 81 - 494,347 -10051,514 1,071,538 2,624,025 - ..
Total assets $14,300,144 6,6 ,479 $1%987,941 $ 84,659 173,679
Liabilities and Fund Balances
Liabilities:
Accounts payable 725,251 $ 2899786 2,176,942 - $ -
Due to other governmental funds 277,547 10,883 30,046 - ..
Deferred revenue - 1,056,941 115113,532 - -
Other - 6%529 229 - -
Total liabilities 1 X2J98 1,427,139 3,71 8,749 - -
Fund balances:
Restricted for:
Debt service - -Highways, streets and abandoned vehicles 13,297,346 - - - -
Committed to:
Sanitation - 5,1939,340 7,269,192 -Highways, streets and abandoned vehicles - - 173,679
Rental assistance and subsidy
Cemetery - - 84,659
Golf course - - - - -
Lower Puna area
Parks and recreational facilities - - - - -
Total fund balances 13,297,346 5,193,340 75269,192 845659 1735679
Total liabilities and fund balances $14,3 0 ,144 $ 6,620,479 $10,99879941 84,659 1735679
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Special Revenue Funds
Vehicle Workforce Golf eotherma[l eioc. Beauti- Park
Disposal Bikeway Investment Course &Community i ation Housing Dedication
Fund Fund Act Fund Fund Benefits Fund Fund Agency Fund
15973,370 $ 553,873 2 16,622 $ 35097,692 S 1,124,147 8223973 86,722
.. - - - - 394005000
- 200 - - 200 -
3449271 - - - 5775,416
- _ - _ 66,121
38,994 84 1 80,128 - 132,674
383,265 84 180,128 - 776,211
$1,973,370 $ 553,873 383,265 218,706 3,277,820 1,124,147 $ 4,9999,384 869722
4225,346 - 29166 - $ 2,530 11,240 -
383,265 3,756
25906 '
- - -
1369,104 -
4229346 ' 3830265 5,922 - 29530 173,250
3,250
553,873 - .. L121,617 - -
155513024 -
.. - - - - 4,8263134
2121,784
w _ _ _ 3� f ; 0
_ r w w _ *+ 86,722
22
1,5515024 5539873 212,784 3,2775,820 1,121,617 498269134 86,722
$1,973,370 5533,873 383,265 $ 218,706 3,2773820 $ 1,124,147 4,999,384 86,722
(Continued)
COUNTY OF HAWAII
Nonmajor Governmental Funds
Combining Balance Sheet
June 30,2011
(Concluded)
Debt Service Fund Total
Ionmajor
Interest Governmental
Fund Funds
Assets
Cash and easy equivalents 1,944,409 3 7,23 8,983
Investments - 3,40 ,00
Imprest fund - 23850
Receivables:
Due from other governments - 1,625,0 17
Due from other governmental funds - 1,1057,615
Due from other nongovernmental funds - 1,3
Trade,net of allowance for doubtful accounts - 2,556,475
Other - 846,308
- 6, 6,76
Total assets $1,9449409 46,728,598
Liabilities and Fund Balances
Liabilities;
Accounts payable - 3,630,261
Due to other governmental funds - 705,497
Deferred revenue - 2,5949379
Other 72,522 278,384
Total liabilities 72,522 7,208,521
Fund balances:
Restricted for:
Debt service 15,871,887 1,8719887
Highways, streets and abandoned vehicles - 14,972,836
Committed to.
Sanitation 12,462,532
Highways, streets and abandoned vehicles - 1,724,703
Rental assistance and subsidy 4,826,134.
Cemetery - 84,659
Golf course - 212,784
Lower Puna area - 3,277,820
Fars and recreational facilities - 869,722
Total fund balances 15,8715,887 399520,077
Total liabilities and fund balances $1,944,409 46,7289598
See accompanying independent auditors'report.
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COUNTY OF HAWAII
Nonrnajor Governmental Funds
Combining Statement of Revenues,Expenditures, and Changes in Fund Balances
For the Fiscal Year Faded June 30, 11
Special Revenue Funds
Solid Parting
Highway Sewer waste Cemetery Meter
Fund Fund Fund Fund Fund
Revenues
Fuel taxes 7,613,501 - - - -
Public utility franchise taxes 99415,624 - - - -
Licenses and permits 79,053,87 - - - -
Intergovernmental 1,164,3 61 59214 981,9578 - -
Charges for services - 61,570,979 696175,430 - 165,646
Investment earnings - - - - -
Other 597,598 - 45,032 8,000
Total revenues 25,8349971 6,576,193 796035,040 85000 163,646
Expenditures
Current:
Public safety 5,490,286
Highways and streets 11,309,031 - - -
Health,education and welfare -
Culture and recreation - - - - -
Sanitation - 5,978,853 19,101, 47 ., .
Pension and retirement contributions 1,537,727 562,505 971,857 - -
Employees'health insurance 85408 256X7 556,722 - -
Other 33%426 3 0,X44 34%814
- -
Debt service:
Principal 1,4433085 - -
Interest - - 104M2
Total expenditures 19,5319,078 79,328,309 22,527,77 - -
Excess (deficiency)of revenues
over(under)expenditures 6,303M3 752,11 (145,924,667) 85,000 169646
Other Financing Sources(Uses)
Transfers in - - 13,453,532 -
Transfers out (3,559,000) - - - -
Total other financing sources(uses) .3 5590 13,453,532 - -
Net change in fund balances 237443,893 (752:,116) 1,471,13 ,000 163646
Fund balances at beginning of year 1 0,552453 5,945,456 89740,327 76,659 157,033
Fund balances at end of year 1 3,297,346 5,193,340 7,2699192 84,619 $173,679
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Special Revenue Funds
Vehicle Workforce Golf Geothermal F eloe. B auti- Fart
Disposal Bikeway Investment Course &Community fication Housing Dedication
Fund Fund Act Fund Fund Benefits Fund Fund Agency Fund
i $ $ $ r
290589772 915,730 171,589 - -
- - 29 5 5,3 29 - 169016,9720
275 - 736,820 - - -
- - - - - - 11,745 43
20 568,193 37,647 -
21, 59547 91,730 295359329 736,840 5689,193 171,589 16,0663,112
266 59,334 - -
- 2,535,329 1704,615
- - - 8249638 1245P 289575 ' -
2,551,329 _ _ - _ -
20,200 - 143,387 - 457,262
16, 56 80957 208,451
4,196 - - 33, 5 -
- - - r - - 488 r
2,587,585 266 2,535,329 1, 52,799 124,000 87,909 1853633825 -
(5289538) 913464 31 5,959 444,193 830 L252973713) 43
- - - 361,379 - 1,161,187 -
.. ., - (184,9965) -
- 361,379 1 84,965) - 1,161,1 7 r
(5283,538) 91,464 ' 45,420 2599228 839680 (1,136,526) 43
21079,562 462,409 167,364 39018,9592 1,0373,937 5996200 86,679
$1,551,024 $ 5533873 212,784 $ 35,2775820 1,121,617 4,826,134 865722
(Continued)
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COUNTY OF HAWAII
onmaj r Governmental Funds
Combining Statement of Revenues,Expenditures, and Changes in Fund Balances
For the Fiscal Year Ended.Tune 3 0,2011
(Concluded)
Debt Service Fund Total
a Ionrnaj o
Interest Governmental
Fund Funds
Revenues
Fuel taxes - 796039,501
Public utility franchise taxes - 9541 5,624
Licenses and permits - 99375,978
Intergovermnental 261,942 20,9965 144
Charges for services - 13,942,150
Investment earnings 11,
Other - 1,215,490
Total revenues 261,942 620529,675
Expenditures
Current:
Public safety 59490;286
Highways and streets - 11,368,13 1
Health,education and welfare - 20,199,944
Culture and recreation - 977,213
Sanitation - 27,6325P029
Pension and retirement contributions - 3,692,93
Employees'health insurance - 1,973,322
Other - 1,256,485
Debt service:
Principal - 15443,573
Interest 14,725,0 16 14,829,402
Total expenditures 14,725,016 88,863,823
Excess(deficiency)of revenues
over(under)expenditures - (14,463,074) (26,334,148)
Other Financing Sources (Uses)
Transfers in 14,493,480 29,4695,578
Transfers out (3,743,965)
Total other financing sources (uses) 14,493,40 25,7255,613
Net change in fund balances 30,406 (6085,535)
Fund balances at beginning of year 1,841Al 40,128,612
Fund balances at end of year $ 15871,887 399520,077
See accompanying independent auditors'report.
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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 3 , 2011
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
Taxes:
Fuel taxes $ 7, 47, $71547,000 71603,501 $ 56,501
Public utility franchise taxes , %4151624 415,624
Total taxes 16547, 16,547PO 17,019,125 472,125
Licenses and permit -motor vehicle weight taxes 6,30$000 6,3083000 7,053,887 745,587
Intergovernmental 53 1,426 551,776 1,1643361 612,585
Charges for services 3565000 356P0 54006 1849686
Other 122,392 12253 561912 (65,480)
Total revenues 230864,818 23,885,168 2 , 34,971 1, 49, 3
Expenditures:
Public safety-traffic engineering 5,628,954 5,9993,304 5,514,796 484,508
Highways and streets 11,623,871 11,6231871 9,561,819 2, 62,052
Highways and streets-mass transit 943,892 943,592 943,892 -
Pension and retirement contributions 2,125,534 2,125,534 1,537,727 57, 7
Employees'health insurance 8 1 6P0 856,000 85408 1,392
Other 13214,888 824P8 3463,314 478,574
Total expenditures 22,353,139 22,373,49 18,7591156 3,614,333
Excess of revenues over expenditures 1,5119679 1,511,679 7, 75 1 5,564,136
Other financing rises
Transfers out-Capital Projects Fund 3, 59, (3,559,000) (35,559.9000) -
Exeess (deficiency)of revenues over(under)
expenditures and other uses (2,047,321) (2,047,321) 3,516,815 5,564,136
Fund balance at beginning of year 1 ,552,453 10,5529453 1 ,552,453 -
Fund balance at end of year 8,505,132 53,5053132 $ 14, 69,268 5,564,136
See accompanying independent auditors'report.
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COUNTY Y Off' HAWAII
Sewer Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance-
udget and Actual(Budgetary Basis)
For the Fiscal Year Ended June 30
Actual Variance
Original Final (Budgetary Positive
Budget Budget______ Basis (Negative)
Revenues
Intergovernmental - 5,214 5,214
Charges for services-sewer fees 6,586,919 6,586,919 6,570,979 1 5,940)
Total revenues 6,586,919 6,5565919 6,576,193 (10,1726)
Expenditures:
Sanitation 7,047,302 7, 7, 2 5,900,626 1,146,676
Pension and retirement contributions 6379155 637P 1 62, 0 7 ,
Employees'health insurance 274,380 274,380 2563,907 17,473
Other 1,502XO 1502, 5663881 935,119
Total expenditures 9,460,837 99460,837 7,286,919 2,173,918
Deficiency of revenues under expenditures (2,873,918) 2,873, 1 71 0,726) 2,163,192
Fund balance at beginning of year 5,945,456 5,945,456 59945,456 -
Fund balance at end of year 3,071,538 3,071,538 5,234,730 2,163,192
See accompanying independent auditors'report.
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COUNTY OF HAWAII
Solid Waste Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance-
Budget and Actual(Budgetary Basis)
For the Fiscal Year Ended June 3 0, 2011
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
Intergovernmental $1,0533333 $ 1,053,333 916,671 (136,662)
Charges for services -tipping fees 5,135,700 851355700 63,617943 0 (11,518.9270)
Other - 4,032 4,032
Total revenues
9,18%033 99,159,033 7,535,133 (1,650,900)
Expenditures:
Sanitation 24,795,427 245611,427 20,959,751 3,621,646
Pension and retirement contributions 1, 9 , 1,095,000 9715857 1239143
Employees'health insurance 630X0 630,000 5565722 73,278
Other 22210172 406,172 3 51,223 54,949
Total expenditures 26,742,599 26,742,599 22,8699583 3,873,016
Deficiency of revenues under expenditures (17,553,566) (17,553,566) (15,331,450) 2,2223116
Other financing sources.
Transfers in-General Fund 13,453,532 13,453,532 13,453,532 -
efieiency of revenues and other
sources under expenditures 4,1 00ffl4) (41100,034) (1,877,918) 2,222,116
Fund balance at beginning of year 8,7403327 85740,327 8,741 ,327 -
Fund balance at end of year $4,640,293 $ 4,64 ,293 65862,409 $ 2,222,116
See accompanying independent auditors'report
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COUNTY OF HAWAII
Cemetery Fund
Schedule of Revenues,Expenditures, and Changes in Fund Balance-
Bu get and Actual(Budgetary Basis)
For the Fiscal Year Ended June 30, 2011
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis - (Negative)
Revenues-other-sale of cemetery plots 105000 10,000 85000 (2,000)
Expenditures -health, education and welfare MON 1 ,000 105000
Excess of revenues over expenditures - - 8P0 8,000
Fund balance at beginning of year 762659 76,659 765659 -
Fund balance at end of year 76,159 76,159 845659
See accompanying independent auditors'report.
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COUNTY OF HAWAII
Parking Meter r Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance
Budget and Actual(Budgetary Basis)
For the Fiscal Year Ended June 3 09 2011
Actual Variance
Original Final (Budgetary Positive
Budget Budget T Basis) -__( gti c)_
Revenues-Charges for services -highways and streets $ 16,646 16,646
Excess of revenues over expenditures - - 16,646 16M6
Fund balance at beginning of year 157PO33 1571033 157,033 -
Fund balance at end of year 157,033 $ 157,033 173,679 16,646
See accompanying independent auditors'report.
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COUNTY OF HAWAII
Vehicle Disposal Puna
Schedule of Revenues,Expenditures, and Changes in Fund Balance-
udgt and Actual (Budgetary Basis)
For the Fiscal Year Ended June 3 , 2011
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
Licenses and permits -Vehicle disposal fee $25027,328 25027,328 $2,058,772 $ 3 1,444
1
Charges for services-towing charges - 275 275
Total revenues 2,027,328 2, 27,328 25059,047 31,719
Expenditures
Sanitation 2,928,1 3 2,928,1 3 23,41 4,314 513,849
Pension and retirement contributions 225000 21,943 205200 1,743
Employees'health insurance 165000 169057 165056 1
Other 2X0 2,000 - 25000
Total expenditures 2,968,1 3 2,9685163 2,450,570 517,593
Deficiency of revenues under expenditures (940,835) (940,835) (391,523) 549,312
Fund balance at beginning of year 2,079,562 2.0795562 20079,562 -
Fund balance at end of yer 1,I38,727 $ 1,138,727 $ I, 88, 39 549,312
See accompanying independent auditors'report.
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COUN'T'Y 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, 2011
Original Actual Variance
and Final (Budgetary Positive
Budget Basis) (Negative)
Revenues - licenses and permits -bicycle tax 20,000 91,730 1,730
Expenditures -highways and streets 1719000 ( 174, 41
Excess (deficiency) of revenues over(under)
expenditures (15 1,000) 940771 245,771
Fund balance at beginning of year 462,409 462,409 -
1
Fund balance at end of year 11,409 $557,1 $2453,771
See accompanying independent auditors'report.
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COUNTY OF HAWAII
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, 2011
Actual Variance
Original Final (Budgetary Positive
Budget _ Budget Basis) (Negative
Revenues-intergovernmental-federal grants - 15995,580 1,928,901 (66,679)
Expenditures -health, education and welfare 1,995,580 1,9 8)901 66,679
Excess of revenues over expenditures -
Fund balance at beginning of year - - - -
Fund balance at end of year - - _
See accompanying independent auditors'report.
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COUNTY OF HAWAII
Golf Course Fund
Schedule of Revenues,Expenditures, and Changes in Fund Balance-
udget and Actual(Budgetary Basis)
For the Fiscal Year Ended June 30, 2011
Actual Variance
Original Final (Budgetary Positive
Budget Budget . Basis (Negative
Revenues:
Charges for services 768,1 03 $ 768,103 $ 736,820 1,283)
Other - 20 2
Total revenues 768,1 768)103 736,840 1,263)
Expenditures:
Culture and recreation 87 8,716 878,116 858ffll 20,8 5
Pension and retirement contributions 157,743 1575743 14 , 7 14,356
Employees'health insurance $05000 809600 805578 22
Other 1 3,023 UX3 4,437 8,586
Total expenditures 19129,482 1,129,482 1,086,433 43,049
Deficiency of revenues under expenditures (361,379) (361,379) (349,593) 119786
Other financing sources:
Transfers in-General Fund 3615379 361X9 61, 7 -
Exces of revenues and other sources
over expenditures - - 11,786 11,756
Fund balance at beginning of year 167,364 167,364 167,364 -
Fund balance at end of year 1671,364 167,364 179J50 11,786
See accompanying independent auditors'report.
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COUNTY OF HAWAII
Geothermal Relocation and Community Benefits Fund
Schedule of revenues, Expenditures, and Changes in Fund Balance-
Budt and Actual (Budgetary Basis)
For the Fiscal Year Ended June 3 O, 2011
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues-other-geothermal royalties $ 550X0 $ 550X0 568,193 1 8,193
Expenditures:
General govenunent-planning 55M00 241,035 - 241,035
Culture and recreation - 12400 124,000 -
Total expenditures 550X0 3653035 124, 0 241,03 5
Excess of revenues over expenditures - 184,965 4443193 259,228
Other financing uses:
Transfers out- Capital Projects Fund - (184,965) (184,965)
Excess of revenues over expenditures
and other uses - 2593228 259,228
Fund balance at beginning of year 390185,592 3,018;592 3,018,592 -
Fund balance at end of year 3, 1 x,592 3,018,592 3,277,820 259,228
See accompanying independent auditors'report.
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5 COUNTY OF HAWAII
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Beautification Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance-
udget and Actual(Budgetary Basis)
For the Fiscal Year Ended June 30, 2011
Actual variance
Original Final (Budgetary Positive
Bud t uget Basis) (Negative
Revenues-licenses and permits -highway
beautification 16 , 1605000 171,589 1,11589
Expenditures:
Highways and streets MAO 12000 36,307 83,693
Culture and recreation 1205000 120,000 28,575 91,425
Total expenditures 240X0 2400 64, 2 175,118
Excess(deficiency)of revenues over(under)
expenditures (80,000) 106,707 186,707
Fund balance at beginning of year 1,037,937 13037,937 1, 3'7,937 -
Fund balance at end of year 957,937 $ 9573937 1,1 44,644 $1 86,707
See accompanying independent auditors'report.
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COUNTY OF HAWAII
Hawaii County Housing Agency
a
Schedule of Revenues, Expenditures, and Changes in Fund Balance-
udget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 3 O, 2011
Actual Variance
Original Final {Budgetary Positive
Budget Budget Basis ----- _(Negative)
Revenues:
Intergovernmental-
Federal -HUD-Voucher program 14,6631400 17,163,400 1 51997,404 1,1 65,996)
Other 49,1 4 49,104 1%316 (29,788)
Investment earnings 6 ,000 60,000 115745 (48,255)
Resale of property - 37,550 375550
Other - 97 97
Total revenues 14,772,504 17,272,504 16, 66,112 (1,206,392)
Expenditures:
Health, education and welfare 150208,291 17,708,291 16,986X 1 722,290
Pension and retirement contributions 5155400 515P400 457,262 58,13
Employees'health insurance 21 , 1 x,000 208,451 1,549
Total expenditures 15)933,691 1 8,433,69 1 17,65 1,714 7815977
Deficiency of revenues under expenditures (1,161J87) (424,415)
Other financing sources:
Transfers in-General Fund 1,161,1 7 11161M7 1,161,1 7 -
Deficiency of revenues and other
sources under expenditures - - (424,415) (424,415)
Fund balance at beginning of year 5,96200 59962,66 5,962,66 -
Fund balance at end of year $ 5,962,660 $ 5,962,660 5,5389245 (424,415)
See accompanying independent auditors'report.
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A COUNTY OF HAWAII
Park Dedication Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance-
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2011
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues-investment earnings - 43 $ 43
Excess of revenues over expenditures - - 43 43
Fund balance at beginning of'year 86,179 865679 865679 -
Fund balance at end of year 86,679 $ 86,179 86,722 3
See accompanying independent auditors'report.
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COUNTY OF HAWAII
a
Agency Fund
Combining Statement of Agency Funds Net Assets
.Tune 30, 2011
Performance
State hn rovement 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 $893,557 83,314 68,307 401,220 548,549
Investments - - L586,399 - -
ue from other agency funds - _ _ _
Other receivables - - 12,O 14 - 115,600
Total assets 893,557 83X4 1,6660720 40 1,220 5605149
Liabilities
Due to other agency funds - - - - 800
Accrued liabilities 893,557 14,873 - w
Advances payable - - 11,702 - 559,349
Assets held for the benefit of
improvement districts - 83,314 1,640,145 4011220 -
Total liabilities 8939557 83,314 1060720 401220 560,149
See accompanying independent auditors'report.
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Non-Profit Organ and Business
Payroll Flexible Lapsed License Tissue I pr ovem nt
Clearance Spending Warrants Plates Education District
Fund Account Fund Fund Fund 1 -Kailua Total
1,699,774 $366,905 $ 2029302 $ 1,175 577 5,287 41270,967
- - 19586,399
- 2511 - 2,11
8,674 r 17,898 - 15,335 65,521
$ 1,708,448 $366,95 $ 2225316 $ 1,175 $ 577 $ 20,122 $ 519259003
15316 $ - $ - $ $ - $ - $ 2,116
1,707,132 366,95 2223,316 1,175 577 5,287 3,2115822
- - - - 5715,051
- - - - 15,335 2,140,014
157085448 $366,905 222,316 1,175 577 20,622 $ 5,925,003
COUNTY OF HAWAII
F
Agency Funds
Combining Statement of Changes in Assets and Liabilities
For the Fiscal Year Ended June 3 0,2011
Balance Balance
July 1, June 3 0,
2010 Additions Deductions 2011
a
State Weight Tax Fund
Assets
Cash and cash equivalents 841,021 $ 1 O7605224 $ 109,7079,688 $ 893,557
Liabilities
+ Vouchers payable - $ 10,7073 $ 1 0,707,3 53 $
Due to other agency funds 7 306 313 -
Accrued liabilities-due to State of Haaii 841,014 10,686,618 10,6345,075 893,557
Total liabilities 841 X021 21,3 94,277 $ 21,341,741 $ 893,557
a
Improvement District No. 17 Fund
Assets
Cash and cash equivalents $ 8699708 $ 11,027,768 1,814,162 $ 83,314
Restricted tricted cash and cash equivalents 637,000 637,000 -
ther receivables 715,839 3183801 390,640 -
Total assets 135785547 13,3469569 $ 2,841,802 $ 83,314
Liabilities
Accrued liabilities 77,213 $ 320,750 $ 397,963 $
Advances payable 647 - 647 -
Assets held for the benefit
of improvement districts 1,500,687 3905767 13808,140 835314
Total liabilities $1,578,547 $ 711,5 17 $ 292065,750 $ 839314
w 112 i
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C UNTY OF HAWAII
Agency Funds
Combining Statement of Changes in Assets and Liabilities
For the Fiscal Year Ended.tune 30,2011
Balance Balance
July 1, June 30,
2010 Additions Deductions 2011
Improvement District loo. 18 Fund
Assets
Cash and cash equivalents $ 2685,535 $ 813,676 $ 2813907 $ 680307
Investments 1,323,233 2635166 - 1,586,399
Other receivables 4,799 346,847 339,632 12,014
Total assets $195969570 $ 691,689 $ 6219539 $1,666,720
Liabilities
Vouchers payable $ $ 50931 509931 $ -
Accrued liabilities 7,370 313,312 3059809 145873
Advances payable 7,507 12,350 8,155 110702
Assets held for the benefit
of improvement districts 1958 19693 3155955 2579503 10640,145
Total liabilities $1,596,570 692,548 622,398 $1,666,720
Improvement District Revolving Fund
Assets
Cash and cash equivalents 40 l,o o 220 $ - $ 40 1,220
Other receivables 2 - 20
-
Total assets 40 17020 220 $ 2 $ 4011,220
Liabilities
Assets held for the benefit
of improvement districts $ 401,020 $ 220 $ 2 40 1,220
Performance and refundable
Deposits Fund
Assets
Cash and cash equivalents $ 2 6,9 7 697,098 385,486 $ 5480549
Due from other non-agency funds - 119660 50 11,600
Total assets 236,937 $ 7055748 385,536 560,149
Liabilities
Vouchers payable $ 3795137 3799137 -
Due to other agency funds 1,790 800 1,790 800
Accrued liabilities 665 w 665 -
dances payable 2343482 710,198 385,331 5599349
Total liabilities $ 2363,937 1,090,135 $ 7665,923 $ 56 ,149
- 113 -
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COUNTY OF HAWAII
Agency Funds
Combining Statement of Changes in Assets and Liabilities
For the Fiscal Year Ended June 3 ,2011
Balance Balance
July 1, June 30,
2010 Additions Deductions 2011
Payroll Clearance Fund
Assets
Cash and cash equivalents $1,8139,102 $221 213,775 $221,327,103 $1,699,774
Due from other non-agency funds 2235,455,527 223,455,527 -
ther receivables 2,911 5,766 3 89674
Total assets $ 1,816, 13 444,675,068 $4445,7823,633 $1,708,448
Liabilities
Vouchers payable $ $ 993,249,544 99,249,544 $ -
Due to other agency funds 158 1#316 15 1,316
Accrued liabilities 1,815, 55 3473,2863568 347,395,291 1,707,132
Total liabilities $1,98163013 $446,537,428 $4463,6445,993 $1 1,7085448
Flexible Spending Account
Assets
Cash and cash equivalents $ 356,863 3303621 320,579 $ 366,905
Liabilities
Accrued liabilities $ 35603 3305,621 $ 320,579 $ 3665,905
Lapsed Warrants Fund
Assets
Cash and cash equivalents 168, 72 343102 $ 672 $ 2025,302
Due from other agency Funds 1,955 2,116 1,955 25,116
Other receivables 32,147 17,898 325147 17,898
Total assets $ 202,974 545116 $ 34,7+74 $ 222,316
Liabilities
Vouchers payable $ - $ 622 $ 622 $ ..
Accrued liabilities 202,974 36,418 17,076 2229,316
Total liabilities $ 202,974 37,040 $ 17,698 $ 222,316
- 114 -
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GUTTY OF HAWAII
Agency Fronds
Combining Statement of Changes in Assets and Liabilities
For the Fiscal Year Ended June 30, 2011
Balance Balance
July 1, June 30,
2010 Additions Deductions 2011
Non-Proflt License Plates Fund
Assets
Cash and cash equivalents $ LIN $ 5,450 $ 5,375 1,175
Liabilities
Vouchers payable - $ 5,41 $ 5341 $Accrued liabilities
Due to non-profit agency 1.4100 55020 4,945 1,175
Total liabilities 15,1 $ 105435 $ 1 M60 $ 1,175
Organ and Tissue Education Fund
Assets
Cash and cash equivalents $ 364 $ 2425 $ 2,212 $ 577
Liabilities
Vouchers payable $ - $ 23548 $ 2,548 $ -
Aeerued liabilities-due to State of Hawaii 364 29260 27047 577
Total liabilities $ 364 $ 49808 $ 4,595 577
Business Improvement District 1-Kilua
Assets
Cash and cash equivalents 1,088 $ 890,428 $ 886,229 $ 5,287
Other receivables-BID I-Kaila Assessment 11,347 9459775 941,787 15,335
Other receivables - 3,976 3,976 -
T'otal assets $ 12,435 $ 1,8403179 $ 1,81,992 $ 20,622
Liabilities
Vouchers payable - 8275956 $ 827,956 $
Accrued liabilities-due to KVBID 1,088 53287 1,P88 5,287
Assets held for the bcnefit
of improvement districts 115347 8339709 8299721 159335
Total liabilities $ 12,435 $ 116665952 1,658,765 $ 20,622
- 115 -
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COUNTY TY F HAWAII
Agency Funds
Combining Statement of Changes in Assets and Liabilities
For the Fiscal Year Ended June 30, 2011
Balance Balance
July 1, June 30,
2010 Additions Deductions 2011
Total-All Agency Funds
Assets
Cash and cash equivalents $4,98,593 23 , 43177 $235,731,413 $41,2701,967
Investments 1,323,233 2633,166 - 1,516,399
Due from other agency funds 1,955 29116 19955 2,116
Due from other ran-agency funds - 22394679177 2235,4555,577 11,601
Other receivables-BID 1-I ailua Assessment 115347 945,775 941,787 15,335
Other receivables 111,716 693,288 766,418 38,586
Restricted cash and cash equivalents 6375000 - 637, 11 -
Ttal assets $7,143,844 460,41 5,319 461,5343150 $5,925,013
Liabilities
Vouchers payable 111,223,506 $ 111,223,506 ,.
Due to other agency funds 15955 2,422 2,261 2,116
Accrued liabilities 23,4609,940 348,2873669 34850437,383 2,311,226
Accrued liabilities-Niue to non-profit agency 1.9100 5,020 4,945 1,175
Accrued liabilities-due to State of Hawaii 141,378 1 0,6819878 11 ,636,122 894,134
Accrued liabilities-due to KV ID 14088 55287 108 5,287
Advances payable 242,636 722,548 3945133 571,1 1
Assets held for the benefit
of i r vem nt districts 3,494,9 74'7 1,540,651 2,895,384 25141,014
Total liabilities $7,13, 44 472,475,981 473,594,822 $5,9255003
See accompanying independent auditors'report.
116 -
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COUNTY OF HAWAII
-- Private Purpose Trusts
Combining Statement of Private Purpose Trust Net Assets
June 3 05 2011
Shippers' Total
Geothermal Wharf Private
Asset Trust Purpose
Assets Fund Fund Trusts
Cash and cash equivalents 2,106,800 $ 1,621,577 $ 3,728,377
Investments 150385870 1,038,870
Total assets $ 2,106,800 20%447 4,76 ',247
Net Assets
Held in trust for other parties $ 21,16, 0 2,660,447 $ 4,767,247
Total net assets $ 2,1 06,800 $ 216605447 $ 4,767,247
See accompanying independent auditors'report.
i 117 -
i
COUNTY OF HAWAII
Private Purpose Trusts
Combining Statement of Changes in Private Purpose Trust Net Assets
For the Fiscal Year Ended June 30, 2011
Shippers' Total
Geothermal Wharf Private
Asset `gust Purpose
Fund Fund Trusts
Additions
Contributions:
Puna Geothermal venture $ 50,7000 $ - $ 505,000
Investment earnings:
Net increase in fair value of investments - 2685785 268,785
Dividends w 545491 54,491
Interest 974 17,911 1 ,885
Total additions 50,974 3415187 3 92,1 1
Deductions
Grant payments 273,546 273,546
Total deductions - 2730546 273,546
Change in net assets *974 67, 41 11 , 1
Net assets, beginning of year 2,055,826 2,59206 06 4, 4 , 32
Net assets, end of year 2P106X0 $ 2,660,447 $4,767,247
See accompanying independent auditors'report.
- 11 -
1
i
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 tine. 11
Revenue Capacity city---These schedules contain information to help the reader assess the County's
most significant local revenue source,the property tax. 1
Debt Capacity—These schedules present information to help the reader assess the affordability of
the County's current levels of outstanding cleft and the County's ability to issue additional debt in
the future. 13
Demographic and Economic Information—These schedules offer demographic and economic
indicators to help the reader understand the env�xunment within which the County's financial
aciiivities take place. 1
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. 1
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Table 4
COUNTY OF HAWA11
Changes in Fund Balances,Governmental Funds
(Modified accrual basis of accounting)
Last'Ten Fiscal Years
(Amounts in thousands)
Fiscal Year
2002 2003 2004 2005 2006 2007 200E 2009 2010 2011
Revenues:
Property tax $93,712 $109,991 $121,568 $131,087 $153,207 $181,446 $208,313 $225,858 $215,548 $216,511
Public service company tax 5,108 5,064 5,332 6,351 6,812 7,396 8,351 10,229 9,647 9,297
Fuel tax 6,422 7,343 7,552 7,581 7,857 8,471 7,888 7,662 7,406 7,603
Public utility franchise tax 4,993 4,817 5,373 6,017 7,329 8,520 9,027 11,118 8,963 4,416
Licenses and permits 7,781 9,261 11,840 14,442 16,544 16,269 15,918 14,972 14,725 15,097
Intergovernmental 68,918 65,203 58,559 73,372 69,637 63,599 72,601 700869 77,614 93,748
Charges for services 11,689 13,481 14,467 18,149 19,852 21,655 22,154 21,404 18,909 16,416
Investment earnings 3,801 2,066 1,806 3;104 5,223 10,291 12,144 8,914 2,253 510
Other 3,035 6,179 4,718 4,450 4,380 5,073 7,151 5,690 3,241 7,874
Total Revenues 2050.459 223,445 231,515 264,553 290,841 322,750 363,577 376,716 358,306 376,472
Expenditures:
Current:
General government 20,192 22,317 23,070 26,183 31,153 37,652 42,991 45,882 40,586 34,251
Public safety 61,870 64,667 69,117 76,404 83,591 93,241 103,617 107,540 108,798 104,917
Highways and streets 8,376 8,675 9,542 9,787 12,608 14,033 19,529 17,159 20,222 17,114
Sanitation 14,789 16,629 17,02 21,883 26,565 31,817 33,405 35,025 35,675 28,424
Health,education and welfare 16,726 18,867 19,047 19,870 19,054 21,470 24,609 24,596 25,519 26,847
Culture and recreation 12,127 13,086 13,169 13,952 14,731 17,118 18,173 18,853 17,266 16,001
Pension and retirement contributions 11,019 7,926 11,481 14,204 19,937 21,796 24,296 28,870 28,509 27,284
Employees`health insurance 12,198 12,758 14,256 16,168 16,133 16,941 18,089 19,119 23,573 25,212
Other posternployment benefits - - - - - y 13,629 14,950 15,700 17,307
Other 5,334 5,629 7,128 6,133 6,780 5,108 5,344 6,257 4,773 4,758
Debt service:
Principal 10,025 11,800 12,826 13,150 14,060 16,076 16,548 19,749 20,720 42,233
Interest 8,467 8,469 9,283 9,534 9,914 9,894 13,116 12,790 14,584 14,841
Capital outlay 41,580 32,952 23,474 32,816 30,588 52,285 70,156 89,368 100,653 87,782
Total Expenditures 222,699 223,775 229,595 260,114 285,110 337,431 403,508 444,155 456,578 446,971
Revenues over(under)Expenditures (17,240) (370) 1,920 4,439 5,731 (14,681) (39,931) (63,442) (98,272) (70,499)
Other Financing Sources(Uses):
Sale of assets 15 9 1,593 1,486 82 5 3,470 58 10 6
Capital leases 930 1,353 1,474 1,369 404 2,403 2,187 1,026 1,948 47
State Revolving Fund loans 578 853 - 1,504 25 6,255 1,916 280 6,811 9,257
Sale of bonds 15,175 37,262 1,725 30,000 25,000 85,000 - 50,000 - 45,000
Issuance of bond anticipation notes(BAN) - - - - - - - - 19,000 -
lefunding bonds - - 24,595 - 31,607 - - -
Premium on bands 3,025 972 3,099 - 185 - 2,075
Refunding bonds/BANs issuance costs - - (129) (218) - 19) -
Payment to refunded bond escrow agent - - - (25,885) - (32,699)
Transfers in 29,529 29,943 39,440 42,119 45,691 59,139 64,929 56,697 61,495 56,099
Transfers out (30,367 (29,943) {39,440) (42,119) (45,691) (59,139) 64,929 56,697 61,495} (56,099
Total other financing sources 15,860 39,477 4,792 35,965 26,483 95,452 7,573 51,549 27,750 56,358
Net change in fiend balances $ (1,380) $ 39,107 6,712 40,404 32,214 80,771 $f.32,31L 11,893 (70,522) ${14,111}
Debt service as a percentage of
noncapital expenditures 10.0% 10.7% 10.8% 10.3% 9.7% 9.0% 93% 9.0°fin 10.4% 15.9%
Unaudited-see accompanying independent auditors`report.
-123-
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Table 6
COUNTY OF HAWAII
Principal Taxpayers
June 30,2011 and 2002
Fiscal Year 2011 Fiscal Year 2002
Percentage Percentage
2010 Total 2001 of Total
Assessed Assessed Assessed Assessed
Tak payer Business Valuation Rank Valuation Valuation Rank Valuation
Mauna Kea Development Corp. Developer/Hotel 26220231800 1 1.0% 19258541000 2 1.410
Milton Land Investment 1 LLC Hotel 224,278,600, 2 0.9% - _
Hual lai Investors LLC Developer/Hotel 216,9943,300 3 0.9% - -
Orchid 09 LLC Hotel 135,6429700 4 0.5% - -
WB KD Acquisition LLC Developer 113500600 5 0.4% - -
Mauna Lani Resort Inc. Developer/Hotel 103,201,700 6 0.4% 65,627,000 8 0.5%
Hilton Resorts Corp. Timeshare 87,81%800 7 0.3% - -
Kobanaiki Shores LLC Developer 76,408,900 8 0.3% - -
Kona Village Investors LLC Hotel 641233,600 9 0.3% - -
RE7Waikol a LLC Hotel 59,705,400 10 0.2% - -
WB Kukio Resorts LLC Developer - - 30257135589 1 2.2%
BP Bishop Estate Developer - - 16459235816 3 1.2%
Global resort Partners Motel - - 150,000,000 4 1.1%
1250 Oceanside Partners Developer - - 141,464,700 5 1.0%
Liliuol alani Trust Estate Land Trust - - 137,061,144 6 1.0%
Kaupulehu Ma ai'Venture Developer - - 1 0292435720 7 0.8%
ISM Kona Partners Commercial Dev - -- 61,95 85600 9 0.5%
RWH Inc. Motel - - 511698,300 10 0.4%
$1,343,305,800 5.2% 1537055441,869 10.1%
Note: Cross valuation at January 1,2010: $25,518,842,894
Cross valuation at January 1,2001: $13,554,849,852
Source: County of Hawaii,Department of Finance,Real Property Tax Division
Unaudited-see accompanying independent auditors'report.
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a
Table
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 Yalu b Capita c
2002 161,310,657 1.5% 1,042
2003 187,316ffl9 1.6% 1,1
2004 17696935195 1.4% 19082
2005 195,198,142 1.3% 1,167
2006 20552195940 1.2% 1.,199
2007 281,536,503 1.2% 1,633
2608 265,431,280 1.0% 12510
2009 296,535,925 1.0% 107
2010 277,481,633 1.0% 1,549
2011 305961501 1.2% N/A
NOTES;
(a) See Table 10 for debt applicable to legal debt margin.
(b) See Table 5 for net taxable property values.
(c) See Table 11 for population data.
Details regarding the County's outstanding debt can be found in the
notes to the basic financial statements.
Unaudited-see accompanying independent auditors'report.
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Table 11
COUNTY OF RAWAU
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
2001 15.1,025 3,475,755 23,034 29,792 5.0%
2002 153,362 $ 3,697,455 $ 24,110 29,526 4.6%
2003 1565605 $ 3,$69,362 $ 24,705 29,635 4.6%
2004 160,333 4,2235529 $ 263344 29,527 3.9%
2005 1645995 $ 4,635,835 $ 28,115 305262 3.3%
2006 169,565 51064,624 29,568 30,539 2.9%
2007 1735178 $ 5,509,169 $ 313812 305618 3.4%
2008 176,290 5,73215566 $ 32551 30,405 5.6%
2009 177,808 5:,6943731 $ 32X7 30,138 9.7%
2010 179,105 N/A N/A 295741 10.0%
' Amounts reflect subsequent adjustments
Source: County of Hawaii,Department of Research and Development
ment
Unaudited-see accompanying independent auditors'report.
r 133
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11
1
Table 1
COUNTY OF HAWAII
Principal Employers,County of Hawaii
June 3 0,2011 and 2002
2010 a 2004 a
Percentage Percentage
of Total County of Total County
mnl_ Employees Rank _-Employment Employees Rank Employment
State of Hawaii 8,063 1 10.7% 7,608 1 10.0%
County of Hawaii 23663 2 3.5% 25291 2 3.0%
United States Government 1,421 3 1.9% 19221 3 1.6%
Hilton waikoloa'Village 881 4 1.2% 1,100 4 1.4%
Wal-Mart 770 5 1.0%
KTA Super Stores 700 6 0.9% 785 5 1.0%
The Fainnont Orchid,Hawaii 618 7 0.8% 600 6 0.8%
Four Seasons Resort Hualalai 550 8 0.7% 557 8 0.7%
Mauna Idea Beach Hotel 550 9 0.7% 556 9 0.7%
Mauna Mani Resort(Operations)Inc. 529 10 0.7% -
Mauna Lani Bay Hotel - 580 7 0.8%
Hapuna Beach Prince Hotel - - 542 10 0.7%
Total 16,745 22.1% 15,840 20.7%
Total employee count 75,150 76,200
NOTES:
a Data for Fiscal Year 2011 anal the period of 2001 to 2003 are unavailable.
Source: County of Hawaii,Department of Research and Development
Unaudited-see accompanying independent auditors'report.
- 134-
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