HomeMy WebLinkAboutCAFR 2013 FINAL (2)COMPREHENSIVE
ANNUAL FINANCIAL REPORT
Fiscal Year Ended June 30, 2013
COUNTY OF HAWAII
Hilo, Hawaii
William P. Kenoi
Mayor
Walter Lau
Managing Director
Prepared by
The Department of Finance
Nancy E. Crawford
Director of Finance
COUNTY OF HAWAII
Comprehensive Annual Financial Report
For the Fiscal Year Ended June 30, 2013
Table of Contents
FINANCIAL SECTION
Report of Independent Auditors 13
Management's Discussion and Analysis 15
Basic Financial Statements:
Government -wide Financial Statements:
Statement of Net Position 28
Statement of Activities 30
Fund Financial Statements:
Page
INTRODUCTORY SECTION
32
Letter of Transmittal
1
GFOA Certificate of Achievement
8
Organization Chart
9
List of Elected Officials
10
List of Principal Officials
11
FINANCIAL SECTION
Report of Independent Auditors 13
Management's Discussion and Analysis 15
Basic Financial Statements:
Government -wide Financial Statements:
Statement of Net Position 28
Statement of Activities 30
Fund Financial Statements:
Balance Sheet - Governmental Funds
32
Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Position
33
Statement of Revenues, Expenditures, and Changes in Fund Balances -
Governmental Funds
34
Reconciliation of the Change in Fund Balances of Governmental
Funds to the Statement of Activities
36
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual (Budgetary Basis) - General Fund
38
Statement of Net Position - Proprietary Funds
42
Statement of Revenues, Expenses, and Changes in Fund Net Position -
Proprietary Funds
43
Statement of Cash Flows - Proprietary Funds
44
Statement of Fiduciary Net Position - Fiduciary Funds
45
Statement of Changes in Fiduciary Net Position - Fiduciary Funds
46
Notes to the Basic Financial Statements
47
Required Supplementary Information
91
FINANCIAL SECTION (Continued)
123
Table 2 - Changes in Net Position
Page
Combining and Individual Nonmajor Fund Statements and Schedules:
126
Combining Balance Sheet - Nonmajor Governmental Funds
94
Combining Statement of Revenues, Expenditures, and Changes in Fund
128
Balances - Nonmajor Governmental Funds
98
Schedules of Revenues, Expenditures, and Changes in Fund Balances -
133
Budget and Actual (Budgetary Basis):
134
Highway Fund
101
Sewer Fund
102
Solid Waste Fund
103
Cemetery Fund
104
Parking Meter Fund
105
Vehicle Disposal Fund
106
Bikeway Fund
107
Workforce Investment Act Fund
108
Golf Course Fund
109
Geothermal Relocation and Community Benefits Fund
110
Beautification Fund
111
Hawaii County Housing Agency
112
Park Dedication Fund
113
Combining Statement of Agency Funds Net Position - Agency Funds
114
Combining Statement of Changes in Assets and Liabilities - Agency Funds
116
Combining Statement of Private Purpose Trust Net Position - Private Purpose Trusts
120
Combining Statement of Changes in Net Position - Private Purpose Trusts
121
STATISTICAL SECTION
Table 1 - Net Position by Component
123
Table 2 - Changes in Net Position
124
Table 3 - Fund Balances, Governmental Funds
126
Table 4 - Changes in Fund Balance, Governmental Funds
127
Table 5 - Real Property Assessed Values by Classification and Tax Rates
128
Table 6 - Principal Taxpayers
132
Table 7 - Property Tax Levies and Collections
133
Table 8 - Ratios of Outstanding Debt by Type
134
Table 9 - Ratios of General Bonded Debt Outstanding
135
Table 10 - Legal Debt Margin Information
136
Table 11 - Demographic and Economic Statistics
137
Table 12 - Principal Employers, County of Hawaii
138
Table 13 - Full -Time Equivalent County Government Employees by Function
139
Table 14 - Operating Indicators by Function
140
Table 15 - Capital Asset Statistics by Functions
141
INTRODUCTORY SECTION
William P. Kenoi
Mayor
December 24, 2013
County of Hawaii
Finance Department
25 Aupuni Street, Room 2103 • Hilo, Hawaii 96720
(808) 961-8234 • Fax (808) 961-8569
The Honorable Mayor and Members of the Council
County of Hawaii
25 Aupuni Street
Hilo, Hawaii 96720
Nancy E. Crawford
Director
Deanna S. Sako
Deputy Director
We transmit herewith the Comprehensive Annual Financial Report for the County of
Hawaii, State of Hawaii (the County), for the fiscal year July 1, 2012 to June 30, 2013.
This report was prepared by the County's Department of Finance. The accuracy of the
financial statements and the completeness and fairness of their presentation are the
responsibility of the County government. We believe the enclosed data are complete and
accurate in all material respects and are reported in a manner designed to present fairly
the financial position and results of operations of the various funds of the County. All
disclosures necessary to convey the maximum understanding of the County's financial
activities have been included. Management's discussion and analysis is also included to
aid users of the financial statements.
This report presents the financial position of the County of Hawai` i at June 30, 2013 and
results of operations for the fiscal year then ended. The report is divided into three
sections:
• The Introductory Section includes this transmittal letter, a Certificate of Achievement
for Excellence in Financial Reporting, the County of Hawai`i's organization chart and
lists of elected and principal officials.
• The Financial Section contains management's discussion and analysis, the basic
financial statements, related notes, the combining and individual fund budgetary
financial statements, and the independent auditors' report.
• The Statistical Section includes selected financial and demographic information,
generally presented on a multi-year basis.
Hawai 'i County is an equal opportunity provider and employer.
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This report includes all funds of the County of Hawaii, including its component unit, the
Department of Water Supply, established by the County Charter as a semi -autonomous
body of the County government. This component unit is included in the County's
reporting entity because of its financial relationship with the County.
The County provides a full range of municipal services. These include police and fire
protection; emergency medical care; public prosecutor; culture and recreation; sanitation;
social services; water; planning and zoning; construction and maintenance of highways,
streets and infrastructure; real property assessment and tax collection; and general
administrative services. However, the County does not provide such other traditional
services as public education, hospitals and courts. These services are provided by the
State government.
The County consists of the island of Hawaii, 4,028 square miles in size. It is twice as
large as the combined area of all the other inhabited islands in the Hawaiian Archipelago.
Since there is no other local or municipal government within the County, there are no
overlapping taxes and no overlapping debt. The County has an elected mayor and a nine -
member council.
Economic Condition and Outlook
The island of Hawaii, commonly known as the Big Island, is located 214 miles from
Honolulu, the state capital; 2,200 miles from the west coast of the continental United
States; and 4,000 miles from Japan. The city of Hilo on the east side of the island serves
as the county seat as well as the transportation and financial center for the Big Island.
Hilo's infrastructure includes Hilo Harbor, a deep -water port, and Hilo International
Airport, which is capable of handling fully -loaded wide-bodied aircraft. Kailua-Kona
and South Kohala, major tourist destination areas on the west side of the Big Island, are
served by flights from the United States mainland, and Canada through the Kona
International Airport. Scheduled freight services are available between the islands by air
and sea transport. Communities on the island are linked by a network of State and
County maintained streets and highways.
The Big Island is the most diversified of the neighbor island economies. As a result it is
buffered to some extent when any one industry lags. Although the past few years proved
challenging to the island's economy, it appears that the County will continue on its steady
but slow road to improved financial health. This favorable outlook is supported by
positive trends in the following key areas of the island's economy.
For the fourth year in a row, the County's unemployment rate has served as a positive
indicator that the island's economy is on a course to recovery. The County's
unemployment rate for the current fiscal year (8.3%) was almost a full percent lower than
that of the prior year (9.2%).
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 Hawaii Volcanoes National Park. A popular attraction, the park is the most visited
site in the state, with almost 3.7 million visitors in fiscal year 2013 representing an almost
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7% increase from the prior fiscal year. Another indication of the County's slowly
rebounding industry, is the fact that there was also a 7% increase in the total number of
visitors to the island from the prior fiscal year. More significantly, spending growth for
this sector has been almost constantly increasing since the beginning of 2010.
Construction — Construction jobs have recovered by one-third of the decline experienced
in recent years and private building permits are up 25% in the first part of 2013 compared
to the same period the year before.
Scientific Research and Development — Due largely to its unique geographic
characteristics which has attracted scientists in fields of astronomy, meteorology,
volcanology, and agriculture/aquaculture, the County has benefited economically by the
significant investments made in scientific research. According to the First Hawaiian
Bank Economic Forecast, Mauna Kea observatories involve 11 facilities with an annual
budget of $75 million to support 527 county -based staff. Astronomy continues to be a
major factor in the success of the 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 (TMT) by the
TMT Observatory Corporation. Permits have been issued for the TMT but a final appeal
has been lodged with the courts. Once construction begins, it is anticipated that the
construction and equipment costs will be $1.2 billion and the TMT will have an annual
operational budget of $27 million.
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 Safety — On November 17, 2012, the Hawaii Police Department gained
accreditation by the Commission on Accreditation for Law Enforcement Agencies
(CALEA) for the first time.
Housing — Construction on Na Kahua Hale O Ulu Wini ("Ulu Wini", formerly known as
Kaloko Housing Program) located in North Kona continued through fiscal year 2013.
During the year, 36 units were constructed with the remaining 20 slated for completion
next fiscal year. Ulu Wini provides transitional (short-term, less than two years) and
permanent rental housing for families with children earning below 50% of the County's
adjusted median income, with preference for those impacted by homelessness. Entire
build -out of the site will include 96 two-bedroom units, a community center complete
with meeting room administrative offices, a laundry facility and kitchen, an employment
training facility, a playground and a wastewater treatment plant. Families engaged at Ulu
Wini will be provided either transitional or rental housing, case management, mail and
computer access, and an array of on-site support services including employment and life
skills training, mental health services, counseling and childcare.
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Following the completion of Kamakoa Nui's four model homes in the prior fiscal year,
sales began strong with the first five homes sold before the end of fiscal year 2013.
Kamakoa Nui is a master planned community in Waikoloa. The first phase of
development includes the construction of 91 homes. The project is intended to serve the
local work force population with affordable homes for purchase near the largest employer
on the Big Island, the Kohala Coast hotels.
For the Future
Public Safety — Securing funding for the South Kona Police Station continues to remain a
goal of the Hawaii Police Department along with planning for a new station in the Puna
District to replace the soon to be retired Keaau Police Station.
The Police Department has also begun the process of procuring a modernized and fully
integrated Computer Aided Dispatch (CAD) and Records Management System (RMS) to
better serve the community. Additionally, the Police Department is one of several
County Departments working on modernizing the County's public safety radio system.
Public Works — Improvements on Kaiminani Road are focused on reconstructing the
roadway, retaining walls, and drainage. 80% of the $10 million construction cost is paid
by the Federal Highways Administration and was completed on November 30, 2013.
The first phase of Kona's $7.8 million Laaloa Avenue Extension project is taking place.
The project includes a 1,900 -foot connector road that will link Alii Drive with Kuakini
Highway. This is the first connector road to be built in decades along Alii Drive.
Construction is scheduled for completion in 2014.
Planning — The Planning Department's regulatory functions can be measured in terms of
volume and responsiveness. In order to have the ability to measure its responsiveness,
the Department is embarking on an effort to invest in the current tracking system to
generate performance reports that reflect categories of regulatory functions and
parameters.
Other Financial Information
Internal Control
The management of the County is responsible for establishing and maintaining an
internal control structure designed to ensure that the assets of the County are protected
from loss, theft or misuse and to ensure that adequate accounting data are compiled to
allow for preparation of financial statements in conformity with generally accepted
accounting principles. The internal control structure is designed to provide reasonable,
but not absolute, assurance that these objectives are met. The concept of reasonable
assurance recognizes that (1) the cost of a control should not exceed the benefits likely to
be derived; and (2) the valuation of costs and benefits requires estimates and judgments
by management.
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Budgetary Control
The County maintains budgetary controls to ensure that legal provisions of the annual
budget are complied with and that those expenditures do not exceed budgeted amounts.
Activities of the general fund and special revenue funds are included in the annual
appropriated operating budget. Project -length financial plans are adopted for the capital
projects fund. Budgetary control is established at the department level.
Formal budgetary integration is employed as a management control device for the general
fund, special revenue funds, and the capital projects fund. Budgetary control for the debt
service fund is achieved through general obligation bond indenture provisions.
The basis of accounting used for the budgets of the general and special revenue funds
differs from generally accepted accounting principles. Intergovernmental revenues are
recognized when awarded by the granting agency, encumbrances and unexpended
allotments are treated as expenditures for purposes of determining legal compliance with
the annual budget, all leases are treated as operating leases, and accounts payable are not
accrued.
The County also maintains an encumbrance accounting system as one technique of
accomplishing budgetary control. Encumbrances outstanding at fiscal year end are
included in the various fund balance categories based on whether the resources are
restricted, committed or assigned and do not constitute expenditures or liabilities because
they will be honored during the following year. As demonstrated by the statements and
schedules included in the financial section of this report, the County continues to meet its
responsibility for sound financial management.
Cash Management
Cash temporarily idle during the year was invested in savings accounts, money market
mutual funds, certificates of deposit, repurchase agreements, and agency notes. The
average yield on deposits and investments was .18%.
The County's policy is to minimize credit and market risks while maintaining a
competitive yield on its portfolio. Accordingly, with the exception of $264,173 held by a
rental management agent, deposits were either insured by federal depository insurance,
collateralized, or secured by irrevocable letters of credit. All collateral on deposit was
held for safe keeping with a County -designated agent in the County's name.
Financial Highlights
As a result of another year of declining property values which negatively impacted real
property tax revenues, the County was again faced with the dilemma of balancing its
budget. To avoid negatively impacting the local economy, the County worked diligently
to lower its operating costs while continuing to service the community and its people
rather than raise real property taxes.
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In an effort to lower its debt service costs, the County issued bonds to refund $52.9
million of various debt instruments, resulting in an estimated savings of approximately
$9.5 million in principal and interest payments.
The County continued the furloughs and pay reductions for both its HGEA and UPW
union employees from the prior year.
As part of the strategy for balancing the budget, the County also decided to temporarily
forgo the employer contributions relating to the pre -funding of its postemployment
benefits other than pensions that it had fully funded for four of the previous five fiscal
years.
Other Information
Independent Audit
The County Charter requires an annual audit by independent certified public accountants.
Accuity LLP was selected in accordance with the County Charter and the procurement
provisions of the Hawaii Revised Statutes (HRS) and Hawaii Administrative Rules
(HAR) to perform the audit.
Employee Union Contracts
County employees are members of seven different bargaining units. Three bargaining
units have contracts that will expire on June 30, 2015. Three bargaining units have
contracts that will expire on June 30, 2017. The one remaining bargaining unit received
an interest arbitration decision in November 2013, however, the cost items associated
with that decision are currently subject to the approval of all legislative bodies. The
County anticipates this cost approval process will conclude on or about the end of the
2014 Legislative session (May 2014).
Certificate of Achievement
The Government Finance Officers Association of the United States and Canada (GFOA)
awarded a Certificate of Achievement for Excellence in Financial Reporting to the
County of Hawaii for its Comprehensive Annual Financial Report for the fiscal year
ended June 30, 2012. This was the twenty-fifth consecutive year that the government has
received this prestigious award. In order to be awarded a Certificate of Achievement, a
government must publish an easily readable and efficiently organized comprehensive
annual financial report. This report must satisfy both generally accepted accounting
principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe our
current Comprehensive Annual Financial Report continues to meet the Certificate of
Achievement Program's requirements, and we are submitting it to the GFOA to
determine its eligibility for another certificate.
WOE
Acknowledgments
The preparation of this report was made possible by the efficient and dedicated services
of the entire staff of the Department of Finance and fiscal personnel in other departments.
I am grateful for their help in preparing this report. .I also thank the Mayor and the
members of the County Council for their interest and support in assuring the continuing
sound financial condition of the County of Hawaii.
't W
NANO CRA.WF
Director of Finance
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uJ
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
County of Hawaii
Hawaii
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2012
Executive Director/CEO
County of Hawaii
Organization Chart
County Electorate
County Council 1 Mayor 1 Prosecuting Attorney
County Legislative
Office
of Management:
Clerk Auditor
Managing Director
Departments under Agencies under
Departments under
direct supervision of the
direct supervision of the
commissions and
Managing Director:
Managing Director:
administrative supervision
of the Mayor:
Corporation Counsel
Civil Defense
Human Resources
Finance
Office of Aging
Police
Planning
Mass Transit
Liquor Control
Environmental Management
Office of Housing &
Fire
Research & Development
Community Development
Water Supply
Public Works
(semi -autonomous)
Parks & Recreation
Information Technology
M
County of Hawaii
Elected Officials
June 30, 2013
Administrative Officers (Term: 2012-2016)
William P. Kenoi Mayor
Mitchell Roth Prosecuting Attorney
County Council (Term: 2012-2014)
J Yoshimoto
Chair
Karen Eoff
Vice Chair
Brenda Ford
Member
Greggor Ilagan
Member
Dru Mamo Kanuha
Member
Zendo Kern
Member
Dennis ."Fresh" Onishi
Member
Valerie Poindexter
Member
Margaret Wille
Member
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Principal Officials
June 30, 2013
County Clerk
Stewart Maeda
Legislative Auditor, Acting
Lane Shibata
Managing Director
Walter Lau
Deputy Managing Director
Randy Kurohara
Corporation Counsel
Lincoln Ashida
Director of Finance
Nancy E. Crawford
Planning Director
Duane Kanuha
Director of Personnel
Ronald Takahashi
Director of Research and Development
Laverne Omori
Chief of Police
Harry S. Kubojiri
Fire Chief
Darren Rosario
Director of Public Works
Warren Lee
Director of Environmental Management Bobby Jean Leithead-Todd
Parks and Recreation Director
Clayton Honma
Manager -Chief Engineer, Department of Water Supply
Quirino Antonio, Jr.
Civil Defense Administrator, Acting
Darryl Oliveira
Director of Liquor Control
Gerald Takase
Mass Transit Administrator
Tiffany Kai
Executive on Aging
Alan Parker
Administrator, Office of Housing and
Community Development
Stephen Arnett
Director of Information Technology, Acting
Donald F. Jacobs, Jr.
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FINANCIAL SECTION
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CERTIFIED PUBLIC ACCOUNTA:,rrS
Report of Independent Auditors
To the Chair and Members of the County Council
County of Hawaii
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business -type
activities, the discretely presented component unit, each major fund, and the aggregate remaining fund
information of the County of Hawai'i, State of Hawaii (the "County") as of and for the year ended June 30,
2013, and the related notes to the financial statements, which collectively comprise the County's basic
financial statements as listed in the table of contents. We also have audited each fiduciary fund type of
the County as of and for the year ended June 30, 2013, as displayed in the County's basic financial
statements.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud
or error.
Auditors' Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditors' judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditors consider internal control relevant to the entity's
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business -type activities, the discretely
presented component unit, each major fund, and the aggregate remaining fund information as well as
each fiduciary fund type of the County, as of June 30, 2013, 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 accordance with accounting principles generally accepted in the United States of
America.
999 Bisnor SrRErT, SUITE 1900
an independent member of HON01,11w, HA\vAll 96813
BAKER TILLY TFLL:YH0NF:8085313400FAcswnx:8085313433
INTERNATIONAL
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Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis and schedule of funding progress for the EUTF information on pages 15 through
25 and 91 be presented to supplement the basic financial statements. Such information, although not a
part of the basic financial statements, is required by the Governmental Accounting Standards Board who
considers it to be an essential part of financial reporting for placing the basic financial statements in an
appropriate operational, economic or historical context. We have applied certain limited procedures to
the required supplementary information in accordance with auditing standards generally accepted in the
United States of America, which consisted of inquiries of management about the methods of preparing
the information and comparing the information for consistency with management's responses to our
inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic
financial statements. We do not express an opinion or provide any assurance on the information because
the limited procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the County's basic financial statements. The introductory section, combining and individual
nonmajor fund financial statements, fund schedules, and statistical section are presented for purposes
of additional analysis and are not a required part of the basic financial statements.
The combining and individual nonmajor fund financial statements and fund schedules are the
responsibility of management and were derived from and relate directly to the underlying accounting and
other records used to prepare the basic financial statements. Such information has been subjected to
the auditing procedures applied in the audit of the basic financial statements and certain additional
procedures, including comparing and reconciling such information directly to the underlying accounting
and other records used to prepare the basic financial statements or to the basic financial statements
themselves, and other additional procedures in accordance with auditing standards generally accepted
in the United States of America. In our opinion, the combining and individual nonmajor fund financial
statements and fund schedules are fairly stated, in all material respects, in relation to the basic financial
statements as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures applied in
the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any
assurance on them.
Other Renortina Reauired by GovernmentAuditina Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 24,
2013 on our consideration of the County's internal control over financial reporting and on our tests of
its compliance with certain provisions of laws, regulations, contracts and grant agreements and other
matters. The purpose of that report is to describe the scope of our testing of internal control over financial
reporting and compliance and the results of that testing, and not to provide an opinion on internal control
over financial reporting or on compliance. That report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the County's internal control over
financial reporting and compliance.
1kc , [-LP'
Honolulu, Hawai'i
December 24, 2013
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MANAGEMENT'S DISCUSSION AND ANALYSIS
This section of the County of Hawai`i's (the County) Comprehensive Annual Financial Report
presents a narrative overview and analysis of the financial activities of the County for the fiscal
year ended June 30, 2013. 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 $767.0 million
(net position). This amount includes $2.9 million in unrestricted net position, a decrease of
$36.9 million from the prior year.
• The County's total net position increased by $84.0 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 $195.3 million, an increase of $48.9 million from the prior year.
Approximately 42 percent of this total amount, $82.0 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 $45.6
million, or 21 percent of total general fund expenditures.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the County's basic financial
statements. The County's basic financial statements comprise three components: (1)
Government -wide financial statements, (2) Fund financial statements, and (3) Notes to the basic
financial statements. This report also contains both required and other supplementary
information in addition to the basic financial statements themselves.
Government -wide Financial Statements
The government -wide financial statements are designed to provide readers with a broad overview
of the County's finances, in a manner similar to a private -sector business.
The statement of net position presents information on all of the County's assets and liabilities,
with the difference between the two reported as net position. Over time, increases or decreases in
net position may serve as a useful indicator of whether or not the financial position of the County
is improving or deteriorating.
The statement of activities presents information showing how the County's net position changed
during the most recent fiscal year. All changes in net position are reported as soon as the
underlying event giving rise to the change occurs, regardless of the timing of related cash flows.
Thus, revenues and expenses are reported in this statement for some items that will only result in
cash flows in future fiscal periods, such as revenues pertaining to uncollected taxes and expenses
pertaining to earned but unused vacation and sick leave.
Both of the government -wide financial statements distinguish functions of the County that are
principally supported by taxes and intergovernmental revenues (governmental activities) from
other functions that are intended to recover all or a significant portion of their costs through user
fees and charges (business -type activities). The governmental activities of the County include
public safety, highways and streets, health, education and welfare, culture and recreation,
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sanitation and general government. The business -type activities of the County include rental
housing for senior citizens and families.
The government -wide financial statements include not only the County itself (known as the
primary government), but also the Department of Water Supply, a legally separate entity that the
County is financially accountable for. Financial information for this component unit is reported
separately from the financial information presented for the primary government itself.
Fund Financial Statements
The fund financial statements are designed to report information about groupings of related
accounts which are used to maintain control over resources that have been segregated for specific
activities or objectives. The County, like other state and local governments, uses fund accounting
to ensure and demonstrate compliance with finance -related legal requirements. All of the funds
of the County can be divided into the following three categories: governmental funds,
proprietary funds, and fiduciary funds.
Governmental funds. Governmental funds are used to account for essentially the same
functions reported as governmental activities in the government -wide financial statements
i.e., most of the County's basic services are reported in governmental funds. These
statements, however, focus on (1) how cash and other financial assets can readily be
converted to available resources and (2) the balances left at year-end that are available for
spending. Such information may be useful in determining what financial resources are
available in the near future to finance the County's programs.
Because the focus of governmental funds is narrower than that of the government -wide
financial statements, it is useful to compare the information presented for governmental
funds with similar information presented for governmental activities in the government -wide
financial statements. By doing so, readers may better understand the long-term impact of the
government's near-term financing decisions. Both the governmental funds balance sheet
and the governmental funds statement of revenues, expenditures, and changes in fund
balances provide a reconciliation to facilitate this comparison between governmental funds
and governmental activities.
The County maintains several individual governmental funds organized according to their
type (general, special revenue, debt service, and capital projects). Information is presented
separately in the governmental funds balance sheet and in the governmental funds statement
of revenues, expenditures, and changes in fund balances for the general fund and capital
projects fund, which are considered to be major funds. Data from the remaining
governmental funds are combined into a single, aggregated presentation. Individual fund
data for each of the non -major governmental funds is provided in the form of combining
statements elsewhere in this report.
The County adopts an annual appropriated budget for its general fund and special revenue
funds. A budgetary comparison statement has been provided for these funds to demonstrate
compliance with this budget. The budgetary comparison statement for the general fund is
located in the basic financial statements, whereas the budgetary comparison schedules for
the nonmajor special revenue funds are presented elsewhere in this report.
Proprietary funds. Proprietary funds are generally used to account for services for which
the County charges outside customers. Proprietary funds provide the same type of
information as shown in the government -wide financial statements, only in more detail. The
County maintains only one type of proprietary funds, enterprise funds. Enterprise funds
-16-
are used to report the same functions presented as business -type activities in the government -
wide financial statements. The County uses enterprise funds to account for the operations of
the Kulaimano Elderly Housing Project and the Ouli Ekahi Affordable Housing Project.
Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of
parties outside the County. The private -purpose trusts and the agency funds are reported
under the fiduciary funds. Since the resources of these funds are not available to support the
County's own programs, they are not reflected in the government -wide financial statements.
The accounting used for fiduciary funds is much like that used for proprietary funds.
Notes to the Basic Financial Statements
The notes to the basic financial statements provide additional information that is essential to a full
understanding of the data provided in the government -wide and fund financial statements.
Other Supplementary Information
In addition to the basic financial statements and accompanying notes, this report also presents
certain required supplementary information, which is presented immediately following the notes
to the basic financial statements. The combining statements referred to earlier in connection with
nonmajor governmental funds and budgetary comparison schedules for the nonmajor special
revenue funds are presented immediately following the required supplementary information.
GOVERNMENT -WIDE FINANCIAL ANALYSIS
Condensed Statement of Net Position
June 30, 2013 and 2012
Liabilities:
Long-term liabilities
outstanding 461,905,296 438,814,811 1,296,633 851,306 463,201,929 439,666,117
Other liabilities 35,506,628 48,424,315 66,685 395,021 35,573,313 48,819,336
Total liabilities 497,411,924 487,239,126 1,363,318 1,246,327 498,775,242 488,485,453
Net position:
Primary Government
Net investment in
Governmental Activities
Business -type
Activities
Total
capital assets
2013
2012
2013
2012
2013
2012
Assets:
48,360,223
185,148
64,437,707
48,545,371
Unrestricted
1,895,863
Current and other assets
$ 253,214,295
$ 252,075,426
$ 1,111,875
$ 1,036,087
$ 254,326,170
$ 253,111,513
Capital assets, net
1,009,857,355
917,249,344
1,611,888
1,167,154
1,011,469,243
918,416,498
Total assets
1,263,071,650
1,169,324,770
2,723,763
2,203,241
1,265,795,413
1,171,528,011
Liabilities:
Long-term liabilities
outstanding 461,905,296 438,814,811 1,296,633 851,306 463,201,929 439,666,117
Other liabilities 35,506,628 48,424,315 66,685 395,021 35,573,313 48,819,336
Total liabilities 497,411,924 487,239,126 1,363,318 1,246,327 498,775,242 488,485,453
Net position:
Net investment in
capital assets
699,326,156
594,384,524 315,255
315,848
699,641,411
594,700,372
Restricted
64,437,707
48,360,223
185,148
64,437,707
48,545,371
Unrestricted
1,895,863
39,340,897 1,045,190
455,918
2,941,053
39,796,815
Total net position
$ 765,659,726
$ 682,085,644 $ 1,360,445
$ 956,914
$767,020,171
$683,042,558
-17-
Analysis of Net Position
As noted earlier, net position may serve over time as a useful indicator of a government's
financial position. In the case of the County, assets exceeded liabilities by $767.0 million at the
close of the most recent fiscal year.
By far the largest portion of the County's net position (91 percent) reflects its investment in
capital assets (e.g., land, buildings, infrastructure, and equipment) less any related debt used to
acquire those assets that is still outstanding. The County uses these capital assets to provide
services to citizens; consequently, these assets are not available for future spending. Although the
County's investment in its capital assets is reported net of related debt, it should be noted that the
resources needed to repay this debt must be provided from other sources, since the capital assets
themselves cannot be used to liquidate these liabilities.
An additional portion of the County's net position (8 percent) represents resources that are subject
to external restrictions on how they may be used.
At the end of the current fiscal year, the County is able to report positive balances in all three
categories of net position, both for the government as a whole, as well as for its separate
governmental and business -type activities.
The County's net position increased by $84.0 million during the current fiscal year, which was
$8.3 million more than the increase during last fiscal year. Capital grants and contributions
increased by approximately $20.8 million relating mostly due to increases related to highways
and streets with reductions in those related to sanitation. The increase was offset and reduced by
a decrease in real property taxes of approximately $9.1 million.
The County's net capital assets increased by $93.1 million due to the large amount of capital
improvement projects done by the County during the current fiscal year and infrastructure related
assets that were contributed. See further discussion of the increase in capital assets on page 23.
The County's long-term liabilities outstanding increased by $23.5 million (5 percent) due
primarily to the increases resulting from the County's decision to forgo the employer
contributions relating to the pre -funding of its postemployment benefits other than pensions and
the issuance of new bonds. These increases were offset by principal payments on the General
Obligation Bonds and the State Revolving Fund loans from the prior year. See further discussion
of the increase in long-term debt outstanding on page 24.
-18-
Increase in net position 83,574,082 75,648,663 403,531 13,280 83,977,613 75,661,943
Net position at beginning of year 682,085,644 606,436,981 956,914 943,634 683,042,558 607,380,615
Net position at end of year $ 765,659,726 $ 682,085,644 $ 1,360,445 $ 956,914 $ 767,020,171 $ 683,042,558
Analysis of Changes in Net Position
Governmental activities. Governmental activities increased the County's net position by
$83.6 million or basically all of the total growth in net position of the County.
Total revenues increased by $8.3 million (2 percent). The combined total revenues for both the
Operating and Capital grants and contributions also increased by approximately $19.5 million,
which related mostly to increases in highways and streets projects being netted with decreases in
sanitation. This overall increase in grants and contributions revenue was offset by decreases in
the other revenue sources. The most significant decrease of $9.1 million was in real property
taxes, which was due to a slight decline in the value of net taxable real property as evidenced in
the accompanying statistical tables but is an improvement as compared to the decrease of $15.2
million experienced in the prior year.
Total expenses increased by only $347,055 (less than 0.5 percent).
-19-
Condensed Statement of Activities
For the
Fiscal Years
Ended June
30, 2013 and 2012
Primary Government
Governmental Activities
Business -type Activities
Total
2013
2012
2013 2012
2013
2012
Revenues:
Program revenues:
Charges for services
$ 34,930,495
$ 34,875,798
$ 432,057 $ 393,464
$ 35,362,552
$ 35,269,262
Operating grants and contributions
44,410,353
45,767,655
123,800 131,227
44,534,153
45,898,882
Capital grants and contributions
107,584,670
86,754,033
- -
107,584,670
86,754,033
General revenues:
Property taxes
200,775,779
209,894,427
200,775,779
209,894,427
Other taxes
28,206,334
29,255,027
28,206,334
29,255,027
Grants and contributions, unrestricted
17,750,132
19,074,105
17,750,132
19,074,105
Investment earnings (loss)
(81,020)
230,804
1,416 5,641
(79,604)
236,445
Other
2,320,838
1,773,258
342,275 -
2,663,113
1,773,258
Total revenues
435,897,581
427,625,107
899,548 530,332
436,797,129
428,155,439
Expenses:
General government
55,616,102
56,115,599
- -
55,616,102
56,115,599
Public safety
151,975,049
152,288,979
151,975,049
152,288,979
Highways and streets
42,219,903
42,462,299
42,219,903
42,462,299
Health, education and welfare
28,001,020
28,127,691
496,017 517,052
28,497,037
28,644,743
Culture and recreation
22,121,336
23,412,948
- -
22,121,336
23,412,948
Sanitation
38,505,086
35,049,546
-
38,505,086
35,049,546
Interest on long-term debt
13,885,003
14,519,382
-
13,885,003
14,519,382
Total expenses
352,323,499
351,976,444
496,017 517,052
352,819,516
352,493,496
Increase in net position 83,574,082 75,648,663 403,531 13,280 83,977,613 75,661,943
Net position at beginning of year 682,085,644 606,436,981 956,914 943,634 683,042,558 607,380,615
Net position at end of year $ 765,659,726 $ 682,085,644 $ 1,360,445 $ 956,914 $ 767,020,171 $ 683,042,558
Analysis of Changes in Net Position
Governmental activities. Governmental activities increased the County's net position by
$83.6 million or basically all of the total growth in net position of the County.
Total revenues increased by $8.3 million (2 percent). The combined total revenues for both the
Operating and Capital grants and contributions also increased by approximately $19.5 million,
which related mostly to increases in highways and streets projects being netted with decreases in
sanitation. This overall increase in grants and contributions revenue was offset by decreases in
the other revenue sources. The most significant decrease of $9.1 million was in real property
taxes, which was due to a slight decline in the value of net taxable real property as evidenced in
the accompanying statistical tables but is an improvement as compared to the decrease of $15.2
million experienced in the prior year.
Total expenses increased by only $347,055 (less than 0.5 percent).
-19-
Expenses and Program Revenues — Governmental Activities
Year Ended June 30, 2013
$160,000,000
$140,000,000 FM
$120,000,000 vEz enses ■Program revenues
$100,000,000
$80,000,000
$60,000,000
$40,000,000
$20,000,000
$0
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Revenue by Source — Governmental Activities
Year Ended June 30, 2013
Investment loss,
Other, $2,320,838
Charges for services,
$(81,020)
$34,930,495
Grants and contributions
not restricted to specific
programs, $17,750,132
Operating grants and
contributions,
Other taxes, $28,206,334
$44,410,353
a
Property taxes,
$200,775,779
Capital grants and
contributions,
$107,584,670
-20-
The charts above illustrate the County's governmental expenses and revenues by function, and its
revenues by source. As shown, public safety is the largest function in expense (43 percent),
followed by general government (16 percent) and highways and streets (12 percent). General
revenues such as property and other taxes are not shown by program, but are effectively used to
support program activities countywide. For governmental activities overall, without regard to
programs, property taxes are the largest single source of funds (46 percent), followed by capital
grants and contributions (25 percent) and operating grants and contributions (10 percent).
Business -type activities. Business -type activities increased the County's net position by
$403,531 versus an increase of only $13,280 in the prior year. Expenses for health, education and
welfare account for all of the $496,017 of expenses. Charges for services were $432,057,
operating grants and contributions were $123,800 and investment earnings were $1,416. Other
income of $342,275 was recognized due to the forgiveness of a lease payable, which accounts for
substantially all of the $369,000 increase in overall revenues. Expenses decreased $21,035 (4
percent) mostly due to decreases in general and administration expenses of $33,839.
FINANCIAL ANALYSIS OF THE COUNTY'S FUNDS
As noted earlier, the County uses fund accounting to ensure and demonstrate compliance with
finance -related legal requirements.
Governmental funds. The focus of the County's governmental funds is to provide information
on near-term inflows, outflows, and balances of spendable resources. Such information is useful
in assessing the County's financing requirements. In particular, unrestricted fund balance may
serve as a useful measure of a government's net resources available for spending at the end of the
fiscal year.
As of the end of the current fiscal year, the County's governmental funds reported combined
ending fund balances of $195.3 million, an increase of $48.9 million in comparison with prior
year. Approximately 42 percent of this total amount ($82.0 million) constitutes unrestricted fund
balance. The unrestricted portion of the fund balance is comprised of (1) $41.6 million in
committed fund balance, (2) $31.7 million in assigned fund balance and (3) $8.7 million in
unassigned fund balance. The remainder of the fund balance is divided between $3.5 million in
nonspendable fund balance for inventory and $109.8 million in restricted fund balance.
Approximately 84% of the restricted fund balance is due to restrictions relating to highways,
streets and abandoned vehicles ($48.3 million), public safety radio system upgrade ($25.0
million), and debt service ($19.1 million).
The general fund is the chief operating fund of the County. At the end of the current fiscal year,
unrestricted fund balance of the general fund was $45.6 million, while total fund balance
increased to $53.9 million. As a measure of the general fund's liquidity, it may be useful to
compare both unrestricted fund balance and total fund balance to total fund expenditures.
Unrestricted fund balance represents 21 percent of total general fund expenditures, while total
fund balance represents 24 percent of that same amount.
The fund balance of the County's general fund increased by $5.2 million during the current fiscal
year as compared to an increase of $4.1 million in the prior year. Key factors in this slight
increase ($1.1 million) over last year's increase are as follows:
-21-
• A decrease of $8.4 million (15 percent) in transfers out to other funds, with the largest
reductions in the transfers to the debt service funds ($6.0 million) and to the Solid Waste
Fund ($2.4 million).
• The positive impact of the decrease in transfers out was mitigated by a decrease of $7.0
million (3 percent) in real property taxes, which was mostly due to lower collections resulting
from the slight decline in the value of net taxable real property as evidenced in the
accompanying statistical tables.
The fund balance of the County's capital projects fund increased by $53.5 million during the
current fiscal year. The increase is primarily due to the combined total of the fund's main
revenue sources of long-term debt financing, which consists of bond proceeds ($50.5 million),
premiums on the issuance of bonds ($10.1 million) and state revolving fund loan proceeds ($5.0
million); intergovernmental revenue ($11.2 million); settlement contributions ($12.5 million) and
transfers in ($3.5 million) being greater than capital and debt service expenditures ($39.5 million)
for the current fiscal year.
The debt service funds consist of the Bond Redemption Fund and the Interest Fund. These funds
have combined total fund balances of $19.1 million, all of which is restricted for the payment of
debt service. The net decrease in the combined fund balances during the current year in the debt
service funds was $7.0 million (27 percent).
Proprietaryfunds. The County's proprietary funds provide the same type of information found
in the government -wide financial statements, but in more detail.
Unrestricted net position of the Kulaimano Elderly Housing Project (Kulaimano) at the end of the
year amounted to $761,021, and $284,169 for the Ouli Ekahi Affordable Housing Project (Ouli
Ekahi). The total net position for Kulaimano increased by $643 and the net position for Ouli
Ekahi increased by $402,888. Other factors concerning the finances of these two funds have
already been addressed in the discussion of the County's business -type activities.
GENERAL FUND BUDGETARY HIGHLIGHTS
Differences between the original budget and the final amended budget were primarily the result
of a $6.7 million increase in appropriations, most of which (60 percent) is due to increases in the
appropriations for capital outlays.
Differences between the final budget and the actual (budgetary basis) resulted in $242,000 more
revenues than expected and $21.8 million less expenditures than appropriated. This is primarily
due to the following factors:
• The positive variances in real property and public service company taxes of $3.7 million was
negated by an almost equal negative variance in intergovernmental revenues for both the
federal and state grants of $3.3 million.
• $5.5 million of the unspent appropriations is related to salaries and wages. The variance is
due primarily to unfilled vacancies and continued efforts by each department to control
payroll costs during the budget year due to the tough economic conditions facing the County.
The following functions are responsible for the majority of the variance: public safety ($3.5
million), general government ($1.2 million) and culture and recreation ($0.7 million).
• $2.2 million is due to lower than anticipated payments needing to be made in pension related
payments. With each department increasing efforts to control costs, overtime was also
closely monitored and the corresponding pension expenditures were not incurred.
-22-
• $3.5 million is due to the fact that the increase in health premiums for employees' was lower
than originally anticipated.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital assets. The County's investment in capital assets for its governmental and business -type
activities as of June 30, 2013 amounts to $1,011 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 10
percent.
Major capital asset events during the current fiscal year included the following:
• Construction continued on the Ane Keohokalole Highway; additional construction costs of
$1.3 million were capitalized during the fiscal year.
• Construction continued on Na Kahua Hale O Ulu Wini Housing Project (formerly known as
Kaloko Housing Program) and related housing employment training facility; construction in
progress as of the end of the current fiscal year for both projects increased by $5.6 million to
reach a total of $6.7 million, of which the portions relating to the completed phases were
transferred to Building and Improvements.
• Construction continued on the Kalanianaole Sewer Interceptor Line Rehabilitation Phase 2;
construction in progress as of the end of the current fiscal year increased by $5.1 million to
reach a total of $5.3 million.
• Construction began on two Mamalahoa Highway Earthquake projects (MP 4.4 and 8.9);
construction in progress as of the end of the current fiscal year for both projects had reached
$3.9 million, which was transferred to Infrastructure.
• Construction began on the Edith Kanakaole Multi -Purpose Stadium Improvements;
construction in progress as of the end of the current fiscal year had reached $3.3 million,
which was transferred to Buildings and Improvements.
• Construction began on the Kaiminani Drive Roadway Improvements Phase I; construction in
progress as of the end of the current fiscal year had reached $6.1 million.
• $68.5 million of dedicated roads were received by the County in the current fiscal year.
• $8.1 million of various other equipment and real property were dedicated and donated to the
County in the current fiscal year.
-23-
Capital Assets
(net of depreciation)
June 30, 2013 and 2012
Additional information on the County's capital assets can be found in note 6 to the basic financial
statements.
Long-term debt. Long-term debt is primarily comprised of bonds of $313.3 million and State
Revolving Fund loans of $20.9 million. At the end of the current fiscal year, the County had total
bonded debt outstanding of $313.3 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 $31.5 million (11.2 percent) during the current fiscal
year due to the issuance of new bonds totaling $50.5 million, which were offset by regularly
scheduled principal payments.
At the end of the fiscal year, the County maintained its "AA-" rating from Standard & Poor's and
Fitch and "Aa2" rating from Moody's for general obligation debt.
State statutes limit the amount of general obligation debt the County may issue up to 15 percent
of the total assessed value of all county real property as established for tax purposes on the last
tax assessment rolls. The current debt limitation for the County is $3.5 billion, which is in excess
of the County's outstanding general obligation debt. Currently the County's outstanding debt
represents 9 percent of our debt limitation.
Additional information on the County's long-term debt can be found in note 10 to the basic
financial statements.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
• The unemployment rate for the County for the current fiscal year is at 8.3 percent, which
represents almost a full percent decline from last year's rate for the same period of 9.2
percent.
• The number of visitors to the County for the current fiscal year was approximately 1.5
million, which represents an approximately 7 percent increase from the previous year's
count of 1.4 million. More importantly, visitors have been increasing their spending
almost constantly since the beginning of 2010 and the spending growth for this sector has
been even stronger than the actual arrivals.
• Astronomy continues to be a major factor in the success of the County's economy with
an estimated nearly 500 new jobs opening up through 2023 to meet the needs of the
-24-
Primary Government
Governmental Activities
Business -type Activities
Total
2013
2012
2013 ,
2012
2013
2012
Land and improvements
$ 163,565,168
$ 129,569,750
$ 753,877
$ 753,877
$ 164,319,045
$ 130,323,627
Infrastructure assets
274,969,315
246,938,042
-
-
274,969,315
246,938,042
Ground and site improvements
-
-
75,280
67,580
75,280
67,580
Buildings and improvements
476,759,437
455,481,924
754,675
329,730
477,514,112
455,811,654
Easements
3,500,794
3,232,428
-
-
3,500,794
3,232,428
Equipment
48,585,309
50,089,791
28,056
15,967
48,613,365
50,105,758
Construction work in progress
42,477,332
31,937,409
-
-
42,477,332
31,937,409
Total
$1,009,857,355
$ 917,249,344
$ 1,611,888
$ 1,167,154
$1,011,469,243
$ 918,416,498
Additional information on the County's capital assets can be found in note 6 to the basic financial
statements.
Long-term debt. Long-term debt is primarily comprised of bonds of $313.3 million and State
Revolving Fund loans of $20.9 million. At the end of the current fiscal year, the County had total
bonded debt outstanding of $313.3 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 $31.5 million (11.2 percent) during the current fiscal
year due to the issuance of new bonds totaling $50.5 million, which were offset by regularly
scheduled principal payments.
At the end of the fiscal year, the County maintained its "AA-" rating from Standard & Poor's and
Fitch and "Aa2" rating from Moody's for general obligation debt.
State statutes limit the amount of general obligation debt the County may issue up to 15 percent
of the total assessed value of all county real property as established for tax purposes on the last
tax assessment rolls. The current debt limitation for the County is $3.5 billion, which is in excess
of the County's outstanding general obligation debt. Currently the County's outstanding debt
represents 9 percent of our debt limitation.
Additional information on the County's long-term debt can be found in note 10 to the basic
financial statements.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
• The unemployment rate for the County for the current fiscal year is at 8.3 percent, which
represents almost a full percent decline from last year's rate for the same period of 9.2
percent.
• The number of visitors to the County for the current fiscal year was approximately 1.5
million, which represents an approximately 7 percent increase from the previous year's
count of 1.4 million. More importantly, visitors have been increasing their spending
almost constantly since the beginning of 2010 and the spending growth for this sector has
been even stronger than the actual arrivals.
• Astronomy continues to be a major factor in the success of the County's economy with
an estimated nearly 500 new jobs opening up through 2023 to meet the needs of the
-24-
current observatories and the creation of new jobs with the development of the Thirty
Meter Telescope (TMT) by the TMT Observatory Corporation. Permits have been issued
for the TMT but a final appeal has been lodged with the courts. Once construction
begins, it is anticipated that the construction and equipment costs will be $1.2 billion and
the TMT will have an annual operational budget of $27 million. According to the First
Hawaiian Bank Economic Forecast, Mauna Kea observatories involve 11 facilities with
an annual budget of $75 million to support 527 county -based staff.
• The outlook for the construction industry based on building permits seems to be
improving despite a few challenges that remain in the areas of the rising cost of materials
and the workforce availability. Construction jobs have recovered by one-third of the
decline experienced in recent years and private building permits are up 25% in the first
part of 2013 compared to the same period the year before.
Several large construction projects are on the horizon for each side of the island. The
west side of the island saw the initial breaking ground on the $20 million Palamaui
campus construction project for the Hawaii Community College and several substantial
highway projects, which include includes the Hawaii Community College and the
widening of the Queen Kaahumanu Highway ($75 million) and Phase III of the Saddle
Road ($32 million). The east side includes the Mohouli Senior Housing Project ($30
million) and the Route 130 widening (expected to be $150 million).
These factors were considered in preparing the County's budget for the 2014 fiscal year.
At the end of the current fiscal year, unrestricted fund balance in the general fund was $45.6
million. The County has appropriated $21.7 million of this amount for spending in the 2014
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 an interest in the government's finances. Questions concerning any of the information
provided in this report or requests for additional information should be addressed to the Director
of Finance, County of Hawaii, 25 Aupuni Street, Suite 2103, Hilo, Hawaii 96720.
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-26-
BASIC FINANCIAL STATEMENTS
-27-
COUNTY OF HAWAII
Statement of Net Position
June 30, 2013
Primary Government
Governmental Business -type Component
Activities Activities Total Unit
Assets
Current assets:
Cash and cash equivalents (notes 3 and 14)
$ 37,444,459 $
810,157
$ 38,254,616
$ 29,430,095
Restricted cash and cash equivalents (note 3)
36,916,644
39,448
36,956,092
-
Investments (notes 3 and 14)
11,854,523
-
11,854,523
-
Restricted investments (note 3)
45,759,190
-
45,759,190
-
Receivables, net (note 4)
46,219,906
4,979
46,224,885
7,528,043
Receivable from improvement district
(notes 4 and 10)
64,014
-
64,014
-
Internal balances (note 5)
(29,954)
29,954
-
-
Inventories
3,492,464
-
3,492,464
1,225,218
Prepaid expenses
-
1,501
1,501
170,541
Real estate held for sale
1,208,129
-
1,208,129
-
Other
904,578
-
904,578
-
Total current assets
183,833,953
886,039
184,719,992
38,353,897
Investments (note 3)
34,918,751
199,430
35,118,181
-
Restricted investments (note 3)
33,179,660
-
33,179,660
-
Restricted cash and cash equivalents (note 3)
-
26,406
26,406
2,574,396
Receivable from improvement district, excluding
current portion (notes 4 and 10)
1,281,931
-
1,281,931
-
Deferred charges
-
-
-
3,137,633
Capital assets (notes 6, 8 and 14):
Utility plant in service, net
-
-
-
255,152,015
Infrastructure assets, net
274,969,315
-
274,969,315
-
Ground and site improvements, net
-
75,280
75,280
-
Buildings and improvements, net
476,759,437
754,675
477,514,112
-
Equipment, net
48,585,309
28,056
48,613,365
-
Easements, net
3,500,794
-
3,500,794
-
Construction work in progress
42,477,332
-
42,477,332
11,708,146
Land and improvements
163,565,168
753,877
164,319,045
4,528,502
Total capital assets, net
1,009,857,355
1,611,888
1,011,469,243
271,388,663
Total noncurrent assets
1,079,237,697
1,837,724
1,081,075,421
277,100,692
Total assets
1,263,071,650
2,723,763
1,265,795,413
315,454,589
(Continued)
-28-
COUNTY OF HAWAII
Statement of Net Position
Liabilities
Current liabilities:
Accounts payable and accrued liabilities
Accrued payroll
Deferred revenue (note 7)
Interest due on long-term debt
Bonds and loans payable, current portion net
(notes 10 and 14)
Compensated absences, current portion (note 10)
Claims and judgments, current portion
(notes 10, 12 and 14)
Capital leases, current portion (notes 8 and 10)
Landfill costs payable, current portion
(notes 9 and 10)
Customers' deposits
Other
Total current liabilities
Noncurrent liabilities:
Bonds and loans payable, net
(notes 10 and 14)
Compensated absences (note 10)
Claims and judgments (notes 10, 12 and 14)
Capital leases (notes 8 and 10)
Landfill costs payable (notes 9 and 10)
Deferred revenue
Customers' deposits
Other (note 13)
Total noncurrent liabilities
Total liabilities
Net Position
Net investment in capital assets
Restricted for:
Capital projects
Debt service (note 10)
Highways, streets and abandoned vehicles
Public access open space
Other
Unrestricted
Total net position
See accompanying notes to the basic financial statements.
June 30, 2013
(Concluded)
Primary Government
Governmental Business -type Component
Activities Activities Total Unit
$ 14,986,633 $ 49,289 $ 15,035,922 $ 2,769,640
7,653,546
-
7,653,546
1,020,654
3,440,011
1,605
3,441,616
-
6,119,459
15,791
6,135,250
1,029,460
18,854,249
40,571
18,894,820
2,556,320
7,540,581
-
7,540,581
403,222
2,608,535
-
2,608,535
51,227
1,335,930
-
1,335,930
-
193,821
-
193,821
-
-
-
-
589,539
3,306,979
-
3,306,979
-
66,039,744
107,256
66,147,000
8,420,062
334,703,553
1,256,062
335,959,615
51,123,708
24,624,529
-
24,624,529
1,147,631
9,795,927
-
9,795,927
177,773
2,296,490
-
2,296,490
-
21,791,179
-
21,791,179
-
-
-
-
1,583,953
-
-
-
16,459,048
38,160,502
-
38,160,502
-
431,372,180
1,256,062
432,628,242
70,492,113
497,411,924
1,363,318
498,775,242
78,912,175
699,326,156
315,255
699,641,411
220,283,031
22,760,127
-
22,760,127
-
19,126,622
-
19,126,622
-
14,838,441
-
14,838,441
-
4,192,817
-
4,192,817
-
3,519,700
-
3,519,700
-
1,895,863
1,045,190
2,941,053
16,259,383
$ 765,659,726
$ 1,360,445
$ 767,020,171
$236,542,414
-29-
COUNTY OF HAWAII
Statement of Activities
For the Fiscal Year Ended June 30, 2013
Functions/Prozrams
Primary government:
Governmental activities:
General government
Public safety
Highways and streets
Health, education and welfare
Culture and recreation
Sanitation
Interest on long-term debt
Total governmental activities
Business -type activities:
Health, education and welfare
Total primary government
Component unit:
Water (note 14)
Program Revenues
Operating Capital
Charges for Grants and Grants and
Expenses Services Contributions Contributions
$ 55,616,102 $ 1,695,152 $ 1,983,060 $ 5,217,111
151,975,049
5,117,102
19,664,648
25
42,219,903
10,159,443
2,073,483
97,316,020
28,001,020
570,312
19,562,429
3,194,290
22,121,336
1,794,553
59,213
640,400
38,505,086
15,593,933
1,067,520
1,216,824
13,885,003
-
-
-
352,323,499
34,930,495
44,410,353
107,584,670
496,017
432,057
123,800
-
$ 352,819,516 $ 35,362,552 $ 44,534,153 $ 107,584,670
$ 51,575,668 $ 48,406,240 $ - $ 15,226,253
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 (loss)
Other
Total general revenues
Change in net position
Net position, beginning of year
Net position, end of year
See accompanying notes to the basic financial statements.
-30-
Net (Expense) Revenue and Changes in Net Position
Primary Government
Governmental Business -type Component
Activities Activities Total Unit
$ (46,720,779) $
- $ (46,720,779) $ -
(127,193,274)
- (127,193,274) -
67,329,043
- 67,329,043 -
(4,673,989)
- (4,673,989) -
(19,627,170)
- (19,627,170) -
(20,626,809)
- (20,626,809) -
(13,885,003)
- (13,885,003) -
(165,397,981) - (165,397,981) -
59,840 59,840 -
(165,397,981) 59,840 (165,338,141) -
12,056,825
200,775,779
-
200,775,779
-
10,766,021
-
10,766,021
-
11,087,369
-
11,087,369
-
6,352,944
-
6,352,944
-
17,750,132
-
17,750,132
-
(81,020)
1,416
(79,604)
231,984
2,320,838
342,275
2,663,113
-
248,972,063
343,691
249,315,754
231,984
83,574,082
403,531
83,977,613
12,288,809
682,085,644
956,914
683,042,558
224,253,605
$ 765,659,726 $
1,360,445
$767,020,171 $
236,542,414
-31-
COUNTY OF HAWAII
Governmental Funds
Balance Sheet
June 30, 2013
Other
Total
Capital
Governmental
Governmental
General
Projects
Funds
Funds
Assets
Cash and cash equivalents (note 3)
$ 9,791,443
$ 26,619,537
$ 37,950,123
$ 74,361,103
Investments (note 3)
43,304,841
59,679,192
22,728,091
125,712,124
Receivables, net (note 4)
24,361,511
911,667
2,774,122
28,047,300
Due from other governmental funds (note 5)
1,093,757
725,732
241,289
2,060,778
Due from other nongovernmental funds (note 5)
-
-
1,350
1,350
Receivables from other governments (note 4)
10,768,812
5,688,423
1,715,371
18,172,606
Inventories
3,492,464
-
-
3,492,464
Real estate held for sale
-
1,208,129
-
1,208,129
Other
307,135
-
597,443
904,578
Total assets93.119.963
94.832.680
66.007.789
253.960.432
Liabilities and Fund Balances
Liabilities:
Accounts payable
$ 2,457,715
$ 9,604,872
$ 2,924,046
$ 14,986,633
Accrued payroll
6,637,658
-
1,015,888
7,653,546
Due to other governmental funds (note 5)
548,747
1,001,980
510,051
2,060,778
Due to other nongovernmental funds (note 5)
31,304
-
-
31,304
Deferred revenue (note 7)
26,936,536
852,988
2,879,294
30,668,818
Other
2,559,396
302,450
445,133
3,306,979
Total liabilities
39,171,356
11,762,290
7374.412
58,708,058
Fund balances:
Nonspendable: Inventory
3,492,464
-
-
3,492,464
Restricted for:
Debt service (note 10)
-
-
19,126,622
19,126,622
Highways, streets and abandoned vehicles
-
33,504,647
14,838,441
48,343,088
Public access open space
4,192,817
-
-
4,192,817
Public safety radio system upgrade
-
25,000,000
-
25,000,000
Other
671,088
9,568,558
2,848,612
13,088,258
Committed to:
Budget stabilization
5,016,857
-
-
5,016,857
Disaster and emergencies
5,076,587
-
-
5,076,587
Lower Puna area
-
-
4,176,671
4,176,671
Rental assistance and subsidy
-
-
2,037,622
2,037,622
Sanitation
-
-
12,021,732
12,021,732
Self insurance
1,252,921
-
-
1,252,921
Highways, streets and abandoned vehicles
-
946,490
2,696,777
3,643,267
Parks and recreational projects
-
1,866,699
84,809
1,951,508
Zoning change impact mitigation (fair share)
-
2,624,050
-
2,624,050
Other
719,163
2,645,626
402,091
3,766,880
Assigned to:
Subsequent year's budget
21,650,000
-
-
21,650,000
Other
3,182,390
6,914,320
-
10,096,710
Unassigned
8,694,320
-
-
8,694,320
Total fund balances
53,948,607
83,070,390
58,233,377
195,252,374
Total liabilities and fund balances
93.119.963
94.832.680
66.007.789
253.960.432
See accompanying notes to the basic fmancial statements.
-32-
COUNTY OF HAWAII
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position
June 30, 2013
Total fund balances - governmental funds $ 195,252,374
Amounts reported for governmental activities in the statement of
net position are different because:
Capital assets used in governmental activities are not financial
resources and therefore are not reported in the funds. These assets
consist of.
Land and improvements
163,565,168
Infrastructure assets, net
274,969,315
Buildings and improvements, net
476,759,437
Equipment, net
48,585,309
Easements, net
3,500,794
Construction work in progress
42,4775332
Total capital assets
(38,160,502)
Some of the County's revenues will be collected after year-end but are
not available soon enough to pay for the current period's expenditures
and therefore are deferred (unearned) in the funds. (note 7)
Some liabilities are not due and payable in the current period and
therefore are not reported in the funds. Those liabilities consist of:
Bonds and loans payable, net of receivable
from improvement district
(352,211,857)
Interest on long-term debt
(6,119,459)
Capital leases
(3,632,420)
Compensated absences
(32,165,110)
Claims and judgments
(12,404,462)
Landfill costs payable
(21,985,000)
Other Postemployment Benefit Obligation (OPEB)
(38,160,502)
Total long-term liabilities
Net position of governmental activities
See accompanying notes to the basic financial statements.
-33-
1,009,857,355
27,228,807
(466,678,810)
$ 765,659,726
COUNTY OF HAWAII
Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Fiscal Year Ended June 30, 2013
Revenues
Property taxes
Public service company taxes
Fuel taxes
Public utility franchise taxes
Licenses and permits
Intergovernmental
Charges for services
Investment earnings (losses)
Settlement contributions
Other
Total revenues
Expenditures
Current:
General government
Public safety
Highways and streets
Health, education and welfare
Culture and recreation
Sanitation
Pension and retirement
contributions (note 13)
Employees' health insurance
Other
Debt service:
Principal
Interest
Capital outlay
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Other Total
Capital Governmental Governmental
General Projects Funds Funds
$201,200,542
$ - $
-
$201,200,542
10,766,021
-
-
10,766,021
-
-
6,352,944
6,352,944
-
-
11,087,369
11,087,369
6,392,990
-
9,598,257
15,991,247
50,421,639
11,156,209
18,333,691
79,911,539
2,782,119
-
14,273,236
17,055,355
(338,974)
(281,305)
2,353
(617,926)
-
12,500,000
-
12,500,000
2,470,808
578,192
1,349,757
4,398,757
273,695,145
23,953,096
60,997,607
358,645,848
33,334,811
- 24,890
33,359,701
100,962,048
- 5,922,594
106,884,642
2,756,175
- 15,167,091
17,923,266
7,293,799
- 16,904,896
24,198,695
15,473,939
- 862,797
16,336,736
870,428
- 29,801,393
30,671,821
25,737,117
- 4,079,470
29,816,587
23,909,503
- 2,101,864
26,011,367
2,172,038
- 819,487
2,991,525
413,716
- 25,303,992
25,717,708
41,116
- 14,303,986
14,345,102
9,108,584
39,456,179 -
48,564,763
222,073,274
39,456,179 115,292,460
376,821,913
51,621,871 (15,503,083) (54,294,853) (18,176,065)
-34-
(Continued)
Wel "JIWK93aamrMy.,t i
Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Fiscal Year Ended June 30, 2013
(Concluded)
See accompanying notes to the basic financial statements.
-35-
Other
Total
Capital
Governmental
Governmental
General
Projects
Funds
Funds
Other Financing Sources (Uses)
Sale of assets
$ 1,046
$ -
$ -
$ 1,046
Increase in capital leases (notes 8 and 10)
1,306,791
-
-
1,306,791
State Revolving Fund loans (note 10)
-
4,991,351
-
4,991,351
Issuance of bonds (note 10)
-
50,480,049
-
50,480,049
Premium on bonds (note 10)
5,871,519
10,092,820
1,605,461
17,569,800
Refunding bonds (note 10)
39,480,000
-
8,029,843
47,509,843
Payment to refunded bond escrow
agent (note 10)
(45,351,519)
-
-
(45,351,519)
Retirement of refunded debt (note 10)
-
-
(9,635,304)
(9,635,304)
Transfers in (note 5)
-
3,460,483
47,895,968
51,356,451
Transfers out (note 5)
(47,895,968)
-
(3,460,483)
(51,356,451)
Total other financing sources (uses)
(46,588,131)
69,024,703
44,435,485
66,872,057
Net change in fund balances
5,033,740
53,521,620
(9,859,368)
48,695,992
Fund balances at beginning of year
48,726,954
29,548,770
68,092,745
146,368,469
Increase in reserve for inventories
187,913
-
-
187,913
Fund balances at end of year
$ 53,948,607
$ 83,070,390
$ 58,233,377
$195,252,374
See accompanying notes to the basic financial statements.
-35-
COUNTY OF HAWAII
Reconciliation of the Change in Fund Balances of Governmental Funds
to the Statement of Activities
For the Fiscal Year Ended June 30, 2013
Net change in fund balances - total governmental funds $ 48,695,992
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 51,569,008
Dedicated and contributed property 76,587,171
Depreciation expense and loss on disposals (35,548,168)
Excess of capital outlay over depreciation expense 92,608,011
Borrowings provide current financial resources to governmental funds;
however, issuing debt increases long-term liabilities in the statement
of net position. In the current period, proceeds were received from:
General obligation bonds, net of refunding (45,073,574)
Premium on bond issuance (17,569,800)
Deferred amount on refunding of bonds 682,146
State Revolving Fund loans, net of refunding (4,991,351)
Capital leases (1,306,791)
Total debt proceeds (68,259,370)
Repayment of long-term debt is reported as an expenditure in governmental
funds, but the repayment reduces long-term liabilities in the statement of
net position. In the current year, these amounts consist of-
Bond
£
Bond principal retirement, net of refunding 12,080,025
State Revolving Fund loan repayments/forgiveness 13,159,694
Capital lease payments 1,477,989
Total long-term debt repayment 26,717,708
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 decreased by
this amount this year. (301,574)
(Continued)
-36-
COUNTY OF HAWAII
Reconciliation of the Change in Fund Balances of Governmental Funds
to the Statement of Activities
For the Fiscal Year Ended June 30, 2013
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
Increase in Other Postemployment Benefit Obligation (OPEB)
Decrease in compensated absences
Increase in claims and judgments
Increase in landfill closure/postclosure care costs
Amortization of premium from bond issuance
Amortization of deferred amount on refunding of bonds
Net increase in accrued interest
Net additional expenses
Change in net position of governmental activities
See accompanying notes to the basic financial statements.
-37-
$ 187,913
(15, 820,170)
415,469
(1,957,355)
(561,000)
2,207,148
(277,496)
(81,194)
(Concluded)
(15,886,685)
$ 83,574,082
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, 2013
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
Taxes and assessments:
Property taxes $ 198,300,000 $ 198,590,000 $ 201,200,542 $ 2,610,542
Public service company taxes 9,377,600 9,627,600 10,766,021 1,138,421
Total taxes and assessments 207,677,600 208,217,600 211,966,563 3,748,963
Licenses and permits:
Nonbusiness licenses and permits
2,879,200
2,879,200
3,755,144
875,944
Business licenses
1,522,102
1,522,102
1,090,342
(431,760)
Street use
1,510,000
1,510,000
1,547,504
37,504
Total licenses and permits
5,911,302
5,911,302
6,392,990
481,688
Intergovernmental:
Federal:
Programs for the aged
2,013,996
2,013,996
1,372,809
(641,187)
Community development block grants
-
2,500,000
2,500,000
-
HOME program grant
-
1,050,279
1,050,279
-
Law enforcement
2,285,050
2,633,107
1,484,359
(1,148,748)
Other
3,265,838
3,833,328
3,458,118
(375,210)
Total federal
7,564,884
12,030,710
9,865,565
(2,165,145)
State:
State General Fund - Act 185,
SLH 1990
17,298,000
17,298,000
17,298,000
-
Emergency medical services
14,358,592
14,358,592
14,358,592
-
Other
5,930,857
7,275,959
6,131,710
(1,144,249)
Total State
37,587,449
38,932,551
37,788,302
(1,144,249)
Total intergovernmental revenue
45,152,333
50,963,261
47,653,867
(3,309,394)
Charges for services:
General government
5,372,021
5,372,021
4,842,578
(529,443)
Culture and recreation
1,159,400
1,159,400
965,450
(193,950)
Highways and streets
824,000
824,000
694,821
(129,179)
Public safety
112,123
112,123
114,788
2,665
Total charges for services
7,467,544
7,467,544
6,617,637
(849,907)
Fines and forfeitures
1,388,600
1,388,600
1,425,268
36,668
Rents
186,080
186,080
167,031
(19,049)
(Continued)
-38-
COUNTY OF HAWAII
General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
Revenues (continued):
Interest and penalties
Miscellaneous
Total revenues
Expenditures:
Current:
General government:
Finance
General government building
Legislative
Automotive equipment
Law
Research and development
Planning and zoning
Mayor's office
Engineering
Information technology
Human resources
Public works administration
Elections
Legislative auditor
Total general government
Public safety:
Police department
Fire department
Prosecuting attorney
Protective inspection
Liquor control
Flood control
Civil defense agency
Animal control
Total public safety
Highways and streets:
Mass transit
For the Fiscal Year Ended June 30, 2013
9,833,353
9,904,648
Actual
Variance
Original
Final
(Budgetary
Positive
Budget
Budget
Basis)
(Negative)
5,743,679
5,740,079
4,948,719
791,360
$ 100,000
$ 100,000
$ 352,948
$ 252,948
5,132,589
5,207,589
5,108,145
(99,444)
273,016,048
279,441,976
279,684,449
242,473
9,833,353
9,904,648
8,884,850
1,019,798
4,948,692
4,821,192
4,446,301
374,891
3,100,704
3,131,357
2,995,006
136,351
5,743,679
5,740,079
4,948,719
791,360
2,532,561
2,532,561
2,229,181
303,380
2,951,619
3,071,619
2,774,527
297,092
2,847,535
2,847,535
2,667,137
180,398
1,276,657
1,321,764
1,173,120
148,644
1,237,009
1,237,009
1,160,370
76,639
1,631,339
1,631,339
1,534,174
97,165
1,707,354
1,707,354
1,627,266
80,088
1,215,174
1,218,774
1,162,601
56,173
868,879
873,104
837,035
36,069
786,484
786,484
599,394
187,090
40,681,039
40,824,819
37,039,681
3,785,138
53,948,484
54,280,705
50,565,735
3,714,970
37,382,687
37,662,304
35,935,154
1,727,150
7,830,753
8,169,766
6,579,553
1,590,213
1,964,771
2,092,271
1,834,010
258,261
1,469,102
1,721,402
1,557,798
163,604
309,000
309,000
306,550
2,450
1,231,059
1,354,511
955,193
399,318
1,982,500
1,982,500
1,870,000
112,500
106,118,356
107,572,459
99,603,993
7,968,466
3,300,812
3,300,812
3,174,806
126,006
(Continued)
-39-
COUNTY OF HAWAII
General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2013
Expenditures (continued):
Current (continued):
Health, education and welfare:
Elderly activities
Office of aging
Education
Social programs
Cemeteries
Physical examination
Total health, education and welfare
Culture and recreation:
Community music
Organized recreation:
Maintenance
Recreation
Aquatics
Hoolulu park complex
Administration
Children's zoo
Summer/Intersession
Culture and arts
Elderly activities administration
Total culture and recreation
Sanitation:
Environmental management
Pension and retirement contributions
Employees' health insurance
Other postemployment benefits
Other
Total current
Original Final
Budget Budget
$ 3,353,637 $ 3,354,637
2,323,947
3,225,872
58,500
58,500
1,500,000
1,500,000
348,944
323,944
133,825
133,825
7,718,853
8,596,778
271,886 240,386
7,129,510
7,236,510
2,468,345
2,520,334
2,260,033
2,236,033
902,602
906,602
1,518,575
1,432,575
638,232
640,232
502,045
502,045
230,833
232,333
499,285
500,285
16,421, 346 16,447,335
1,006,997 1,006,997
27,396,238
27,405,000
30,000
4,250,000
234,328,641
-40-
27,396,238
27,405,000
30,000
3,861,152
236,441,590
Actual
(Budgetary
Basis)
$ 3,076,479
2,435,632
48,690
1,455,250
292,016
128,355
7,436,422
198,212
6,865,167
2,385,206
2,107,883
888,845
1,315,943
629,640
335,989
198,727
433,270
15,358,882
872,536
25,174,814
23,912,049
15,833
2,021,046
214,610,062
Variance
Positive
(Negative)
$ 278,158
790,240
9,810
44,750
31,928
5,470
1,160,356
42,174
371,343
135,128
128,150
17,757
116,632
10,592
166,056
33,606
67,015
1,088,453
134,461
2,221,424
3,492,951
14,167
1,840,106
21,831,528
(Continued)
COUNTY OF HAWAII
General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2013
Expenditures (continued):
Capital Outlay:
Community Development Block
grants (HUD)
HOME Program
Other
Total capital outlay
Total expenditures
Excess of revenues over expenditures
Other financing sources (uses):
Transfers out:
Housing Fund
Solid Waste Fund
Golf Course Fund
Sewer Connection Loan Fund
Disaster/Emergency Fund
Public Access, Open Space, and Natural
Resources Preservation Fund
Public Access, Open Space, and Natural
Resources Preservation Maintenance Fund
Budget Stabilization Fund
Debt Service Fund
Total transfers out
Total other financing uses
Excess (deficiency) of revenues and other
sources over (under) expenditures and other uses
Fund balance at beginning of year
(Concluded)
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
$ - $ 2,575,000
- 1,050,279
- 400,000
- 4,025,279
234,328, 641 240,466, 869
38,687,407 38,975,107
$ 2,575,000 $ -
1,050,279 -
400,000 -
4,025,279 -
218,635,341 21,831,528
61,049,108 22,074,001
(838,384)
(838,384)
(838,384)
-
(15,736,944)
(15,736,944)
(15,736,944)
-
(299,000)
(299,000)
(299,000)
-
(100,000)
(100,000)
(100,000)
-
(250,000)
(250,000)
(250,000)
-
(3,966,000)
(4,256,000)
(4,024,011)
231,989
-
(250,000)
(220,960)
29,040
(250,000)
(250,000)
(250,000)
-
(35,250,229)
(35,250,229)
(35,250,229)
-
(56,690,557)
(57,230,557)
(56,969,528)
261,029
(56,690,557)
(57,230,557)
(56,969,528)
261,029
(18,003,150)
(18,255,450)
4,079,580
22,335,030
48,726,954
48,726,954
48,726,954
-
Fund balance at end of year $ 30,723,804 $ 30,471,504 $ 52,806,534 $ 22,335,030
See accompanying notes to the basic financial statements.
-41-
COUNTY OF HAWAII
Proprietary Funds
Statement of Net Position
June 30, 2013
Assets
Current assets:
Cash and cash equivalents (note 3)
Restricted cash and cash equivalents (note 3)
Imprest fund (note 3)
Receivables, net (note 4)
Internal balances, net (note 5)
Prepaid expenses
Total current assets
Noncurrent assets:
Restricted cash and cash equivalents (note 3)
Investments (note 3)
Capital assets (note 6):
Land and site improvements
Buildings and equipment
Less accumulated depreciation
Total capital assets
Total noncurrent assets
Total assets
Liabilities
Current liabilities:
Accounts payable
Due to developer
Security deposits payable from restricted assets
Deferred revenue (note 7)
Interest payable
Notes payable, current portion (note 10)
Total current liabilities
Noncurrent liabilities:
Notes payable (note 10)
Total liabilities
Net Position
Net investment in capital assets
Unrestricted
Total net position
See accompanying notes to the basic financial statements.
-42-
Business -type Activities -
Enterprise Funds
Kulaimano Ouli Ekahi
Elderly Affordable
Housing Housing
Project Project Total
$ 550,325 $
259,682 $
810,007
12,334
27,114
39,448
50
100
150
310
4,669
4,979
29,954
-
29,954
1,501
-
1,501
594,474
291,565
886,039
- 26,406 26,406
199,430 - 199,430
511,000
515,727
1,026,727
1,241,333
469,635
1,710,968
(1,115,825)
(9,982)
(1,125,807)
636,508
975,380
1,611,888
835,938
1,001,786
1,837,724
1,430,412
1,293,351
2,723,763
3,526
-
3,526
-
7,729
7,729
12,334
25,700
38,034
1,232
373
1,605
15,791
-
15,791
24,071
16,500
40,571
56,954
50,302
107,256
811,037
445,025
1,256,062
867,991
495,327
1,363,318
(198,600)
513,855
315,255
761,021
284,169
1,045,190
$ 562,421
$ 798,024
$ 1,360,445
COUNTY OF HAWAII
Proprietary Funds
Statement of Revenues, Expenses, and Changes in Fund Net Position
For the Fiscal Year Ended June 30, 2013
Operating revenues:
Rental receipts from tenants
Rental subsidy from federal government - HUD
Laundry receipts
Other
Total operating revenues
Operating expenses:
Utilities
General and administration
Maintenance and repairs
Depreciation (note 6)
Total operating expenses
Operating income
Nonoperating revenues (expenses):
Investment income
Interest expense
Other income
Total nonoperating revenues (expenses)
Change in net position
Net position, beginning of year
Net position, end of year
See accompanying notes to the basic financial statements.
-43-
Business -type Activities -
Enterprise Funds
Kulaimano Ouli Ekahi
Elderly Affordable
Housing Housing
Project Project Total
$ 121,731 $
303,067 $
424,798
123,800
-
123,800
3,454
-
3,454
-
3,805
3,805
248,985
306,872
555,857
39,957
84,082
124,039
77,049
85,613
162,662
43,947
66,590
110,537
34,422
9,982
44,404
195,375
246,267
441,642
53,610
60,605
114,215
1,408
8
1,416
(54,375)
-
(54,375)
-
342,275
342,275
(52,967)
342,283
289,316
643
402,888
403,531
561,778
395,136
956,914
$ 562,421 $
798,024 $
1,360,445
COUNTY OF HAWAII
Proprietary Funds
Statement of Cash Flows
For the Fiscal Year Ended June 30, 2013
See accompanying notes to the basic financial statements
-44-
Business -type Activities -
Enterprise Funds
Kulaimano
Ouli Ekahi
Elderly
Affordable
Housing
Housing
Project
Project
Total
Cash Flows from Operating Activities
Receipts from tenants
$ 125,842
$ 305,761
$ 431,603
Receipts from federal government - HUD
123,800
-
123,800
Payments to suppliers for goods and services
(160,738)
(237,901)
(398,639)
Net cash provided by operating activities
88,904
67,860
156,764
Cash Flows from Capital and Related Financing Activities
Principal paid on notes payable
(20,182)
(16,905)
(37,087)
Issuance of bonds
831,124
-
831,124
Retirement of refunded debt
(831,124)
-
(831,124)
Interest paid on notes payable
(34,600)
-
(34,600)
Purchase of capital assets
(7,653)
(3,055)
(10,708)
Other payments
(31,304)
-
(31,304)
Net cash used in capital and related financing activities
(93,739)
(19,960)
(113,699)
Cash Flows from Investing Activities
Purchase of investments
(200,000)
-
(200,000)
Proceeds from maturities of investments
400,000
-
400,000
Interest on investments
3,058
8
3,066
Net cash provided by investing activities
203,058
8
203,066
Net increase in cash and cash equivalents
198,223
47,908
246,131
Cash and cash equivalents at beginning of year (including
restricted cash and cash equivalents)
364,486
265,394
629,880
Cash and cash equivalents at end of year (including
restricted cash and cash equivalents)
$ 562,709
$ 313,302
$ 876,011
Reconciliation of Operating Income to Net Cash
Provided by Operating Activities
Operating income
$ 53,610
$ 60,605
$ 114,215
Adjustments to reconcile operating income to net cash
provided by operating activities:
Depreciation expense
34,422
9,982
44,404
Change in assets and liabilities:
Receivables, net
667
(790)
(123)
Prepaid expenses
120
-
120
Accounts and other payables
309
(316)
(7)
Deferred revenue
(224)
(1,621)
(1,845)
Net cash provided by operating activities
$ 88,904
$ 67,860
$ 156,764
Supplemental disclosure of cash flow information - Interest paid
$ 34,600
$ -
$ 34,600
Noncash investing, capital and financing activities:
Net decrease in fair value of investments
$ 570
$ -
$ 570
Acquisition of housing project in exchange
for assumption of debt
$ -
$ 478,430
$ 478,430
See accompanying notes to the basic financial statements
-44-
COUNTY OF HAWAII
Fiduciary Funds
Statement of Fiduciary Net Position
June 30, 2013
Private -
Purpose Agency
Trusts Funds
Assets
Cash and cash equivalents (note 3) $ 1,741,254 $ 3,094,097
Investments (note 3) 3,030,761 189,525
Receivables:
Due from other agency funds - 2,542
Other receivables 463 72,500
Total receivables 463 75,042
Total assets 4,772,478 $ 3,358,664
Liabilities
Due to other agency funds - 2,542
Accrued liabilities - 2,699,304
Advances payable - 239,724
Assets held for the benefit of improvement districts - 417,094
Total liabilities - $ 3,358,664
Net Position
Held in trust for other parties 4,772,478
Total net position $ 4,772,478
See accompanying notes to the basic financial statements.
-45-
COUNTY OF HAWAII
Fiduciary Funds
Statement of Changes in Fiduciary Net Position
For the Fiscal Year Ended June 30, 2013
Deductions
Grant payments 290,734
Total deductions 290,734
Change in net position (152,842)
Net position, beginning of year 4,925,320
Net position, end of year $ 4,772,478
See accompanying notes to the basic financial statements.
-46-
Private -
Purpose
Trusts
Additions
Contributions:
Puna Geothermal Venture
$ 50,000
Investment earnings:
Net increase in fair value of investments
29,967
Dividends
55,825
Interest
2,100
Total additions
137,892
Deductions
Grant payments 290,734
Total deductions 290,734
Change in net position (152,842)
Net position, beginning of year 4,925,320
Net position, end of year $ 4,772,478
See accompanying notes to the basic financial statements.
-46-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
The accounting policies of the County of Hawaii (the County) conform to U.S. generally accepted
accounting principles (GAAP) as applicable to local governmental units. The following notes to
the basic financial statements are an integral part of the County's Comprehensive Annual Financial
Report (CAFR).
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Financial Reporting Entity
The County has implemented Governmental Accounting Standards Board Statement No. 14,
The Financial Reporting Entity (GASB Statement No. 14), Statement No. 39, Determining
Whether Certain Organizations Are Component Units (GASB Statement No. 39) and
Statement No. 61, The Financial Reporting Entity: Omnibus, an amendment of GASB
Statements No. 14 and 34 (GASB Statement No. 61). All organizations, activities or functions
that meet the criteria in GASB Statement No. 14, No. 39 and No. 61 for inclusion in the
reporting entity are included in the County's basic financial statements.
Primary Government The County operates under the Mayor -Council form of government
under a charter that became effective on January 2, 1969, and was amended in 1979, 1982,
1990 and 2000. The County's operations are organized by the following functions: general
government; public safety; highways and streets; sanitation; health, education and welfare;
culture and recreation; pension and retirement contributions; health fund; miscellaneous;
capital outlay; and debt service. The State of Hawaii (the State) assumes full responsibility
for several major functions usually performed by local governments, including education,
welfare, health and judicial functions. There are no separate city, county or township
governments nor any school districts, special districts, authorities or public corporations with
overlapping authority.
GASB Statement No. 14, as amended by GASB Statement No. 61, defines component units as
legally separate organizations for which the elected officials of the primary government are
financially accountable or for which the primary government may determine, through exercise
of management's professional judgment, that the inclusion of an organization that does not
meet the financial accountability criteria is necessary in order to prevent the reporting entity's
financial statements from being misleading. "Financial accountability" is the level of
accountability that exists if a primary government appoints a voting majority of an
organization's governing board or if the organization is fiscally dependent on the primary
government and is either able to impose its will on that organization or there is a potential for
the organization to provide specific financial benefits to, or impose specific financial burdens
on, the primary government. A primary government has the ability to impose its will on an
organization if it can significantly influence the programs, projects, activities or level of
services performed or provided by the organization. An organization has a financial benefit
or burden relationship with the primary government if any one of three conditions exist: (1)
The primary government is legally entitled to or can otherwise access the organization's
-47-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
resources; (2) The primary government is legally obligated or has otherwise assumed the
obligation to finance the deficits of, or provide financial support to, the organization; or (3)
The primary government is obligated in some manner for the debt of the organization.
As required by GAAP as set forth in GASB Statement No. 14, No. 39 and No. 61, these basic
financial statements present the County of Hawaii (the primary government) and its
component unit, the Department of Water Supply (the Department). This component unit is
included in the County's reporting entity because of its financial relationship with the County.
Discretely Presented Component Unit The component unit column in the basic financial
statements includes the financial data of the Department, a legally independent agency of the
County that is accounted for as an enterprise fund. It is reported in a separate column to
emphasize that it is legally separate from the County. The members of the Water
Commission, the governing body of the Department, are appointed by the Mayor of the
County and confirmed by the County Council. The Department is granted corporate powers
by state statute and the County Charter. Although the County does not have the authority to
approve or modify the Department's operational and capital budgets, the County has issued
bonds on the Department's behalf that are general obligations of the County. Because the
County is obligated to repay these bonds in the event of default by the Department, the County
is financially accountable for the debts of the Department. See Note 14 for component unit
disclosures for the Department. Complete financial statements of the Department can be
obtained from the Department of Water Supply, 345 Kekuanaoa Street, Suite 20, Hilo,
Hawaii 96720.
Basic Financial Statements
The basic financial statements include both government -wide (based on the County as a
whole) and fund financial statements. Both the government -wide and fund financial
statements (within the basic financial statements) categorize primary activities as either
governmental or business -type. In the government -wide statement of net position, both the
governmental and business -type activities columns (a) are presented on a consolidated basis
by column, (b) and are reflected, on a full accrual, economic resource basis, which
incorporates long-term assets and receivables as well as long-term debt and obligations.
The government -wide statement of activities reflects both the gross and net costs per
functional category (general government, public safety, highways and streets, etc.) which are
otherwise being supported by general government revenues (property taxes, certain
intergovernmental revenues, etc.). The statement of activities reduces gross expenses
(including depreciation) by related program revenues, operating and capital grants. The
program revenues must be directly associated with the function (general government, public
safety, highways and streets, etc.) or a business -type activity. The operating grants include
operating -specific and discretionary (either operating or capital) grants while the capital
-48-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
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.
The fund financial statements' emphasis is on the major funds in either the governmental or
business -type categories. Nonmajor funds (by category) are summarized into a single column.
The governmental funds in the fund financial statements are presented on a current financial
resource and modified accrual basis of accounting. This is the manner in which these funds
are normally budgeted. This presentation is deemed most appropriate to (a) demonstrate legal
and covenant compliance, (b) demonstrate the source and use of liquid resources, and (c)
demonstrate how the County's actual experience conforms to the budget fiscal plan. Since the
governmental fund statements are presented on a different measurement focus and basis of
accounting than the government -wide statements' governmental activities column, a
reconciliation is presented on the page following each statement, which briefly explains the
adjustments necessary to transform the fund based financial statements into the governmental
activities column of the government -wide presentation.
The County's fiduciary funds are presented in the fund financial statements by type (private
purpose and agency). Since by definition these assets are being held for the benefit of a third
party (private parties, state government, etc.) and cannot be used to address activities or
obligations of the government, these funds are not incorporated into the government -wide
statements.
Government -wide and fund financial statements — The government -wide financial statements
(i.e., the statement of net position and the statement of changes in net position) report
information on all of the nonfiduciary activities of the primary government and its component
unit. The effect of interfund activity has been removed from these statements. Governmental
activities, which normally are supported by taxes and intergovernmental revenues, are
reported separately from business -type activities, which rely to a significant extent on fees and
charges for support. Likewise, the primary government is reported separately from certain
legally separate component units for which the primary government is financially accountable.
The statement of activities demonstrates the degree to which the direct expenses of a given
function or segment are offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or segment. Program revenues include (a) charges to
customers or applicants who purchase, use, or directly benefit from goods, services, or
privileges provided by a given function or segment and (b) grants and contributions that are
restricted to meeting the operational or capital requirements of a particular function or
-49-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
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
statements. Major individual governmental funds and major individual enterprise funds are
reported as separate columns in the fund financial statements.
Activities in funds — The financial transactions of the County are recorded in individual funds.
Each fund is accounted for by providing a separate set of self -balancing accounts that
comprises its assets, liabilities, reserves, fund equity, revenues and expenditures/expenses.
The various funds are reported by generic classification within the financial statements.
GASB Statement No. 34, Basic Financial Statements — and Management's Discussion and
Analysis —for State and Local Governments, sets forth minimum criteria (percentage of the
assets, liabilities, revenues or expenditures/expenses of either fund category or the
governmental and enterprise combined) for the determination of major funds. The nonmajor
funds are combined in a column in the fund financial statements and detailed in the combining
section.
The County reports the following major governmental funds:
General Fund — The general fund is the general operating fund of the County. It is used
to account for all activities of the general government, except those required to be
accounted for in other funds.
Capital Projects Fund — Used to account for the costs of constructing County capital
improvements financed with general obligation bond proceeds, federal and state grants,
and general and special revenue fund revenues. The capital projects fund is used to
account for financial resources to be used for the acquisition or construction of major
general government capital facilities and infrastructure (other than those financed by
proprietary funds and trust funds) when separate project centers are needed to control
costs.
The County reports the following major proprietary funds:
Kulaimano Elderly Housing Project — Used to account for the operation of a rental
housing project for low-income senior citizens located north of Hilo.
Ouli Ekahi Affordable Housing Project — Used to account for the operation of a 33 -unit
single-family affordable rental housing project located in Waimea.
-50-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
The County reports the following fiduciary funds:
Private -Purpose Trust Funds — Used to account for funds received from geothermal
developers to mitigate the effects of geothermal energy development. Also used to
account for investment income on funds received from import businesses at the port of
Hilo and the related expenditures. to promote health and safety on the Island of Hawaii.
Agency Funds — Used to account for assets held by the County for other governmental
units and individuals. The agency funds are custodial in nature and do not involve
measurement of results of operations. The County has the following agency funds:
• State Weight Tax Fund
• Improvement District No. 18 Fund
• Improvement District Revolving Fund
• Performance and Refundable Deposits Fund
• Payroll Clearance Fund
• Flexible Spending Account
• Lapsed Warrants Fund
• Non -Profit License Plates Fund
• Organ and Tissue Education Fund
• Business Improvement District 1-Kailua
Basis of Accounting
Basis of accounting refers to the period in which revenues and expenditures (or expenses) are
recognized in the accounts and reported in the basic financial statements. Basis of accounting
relates to the timing of the measurements made, regardless of the measurement focus applied.
The government -wide financial statements and the proprietary, fiduciary and component unit
fund financial statements are presented on an accrual basis of accounting. The governmental
funds in the fund financial statements are presented on a modified accrual basis.
Accrual Basis - Revenues are recognized when earned and expenses are recognized when the
related obligation is incurred.
Modified Accrual Basis - Revenues are recorded when susceptible to accrual (that is, both
measurable and available). "Measurable" means the amounts are determinable. "Available"
means the amounts are collectible within the current period or soon enough thereafter (one
year for intergovernmental revenues) to be used to pay liabilities of the current period.
-51-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
Licenses and permits, charges for current services, fines and forfeitures, penalties and
miscellaneous revenues are recorded as revenues when received in cash because they are
generally not measurable until actually received. Real property taxes and State Revolving
Fund loan proceeds are considered available when collected.
In applying the susceptible to accrual concept to intergovernmental revenues, the legal and
contractual requirements of the numerous individual programs are used as guidance. There
are essentially two types of these revenues. In one, monies must be expended on the specific
purpose or project before any amounts will be paid to the County; therefore, revenues are
recognized based upon the expenditures recorded. Most construction grants and many
operating grants fall into this category. In the other, monies are virtually unrestricted as to
purpose of expenditure and are usually revocable only for failure to comply with prescribed
compliance requirements. These resources are reflected as revenues at the time of receipt or
earlier if the susceptible to accrual criteria are met.
The County reports unearned revenue in its fund financial statements (see Note 7). Unearned
revenues arise when potential revenue does not meet both the "measurable" and "available"
criteria for recognition in the current period. In subsequent periods, when both revenue
recognition criteria are met, the liability for unearned revenue is removed from the combined
balance sheet and revenue is recognized.
Expenditures are recognized under the modified accrual basis of accounting in the accounting
period in which the fund liability is incurred. Exceptions to this general rule include:
(a) accumulated compensated absences and claims and judgments which are recognized as
expenditures when paid; (b) liabilities related to municipal solid waste landfill closure and
postclosure care costs; and (c) principal and interest on general long-term debt which are
recognized as expenditures when due.
The County applies all applicable GASB pronouncements, including the adoption of GASB
Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained
in Pre -November 30, 1989 FASB (Financial Accounting Standards Board) and AICPA
(American Institute of Certified Public Accountants) Pronouncements.
Encumbrances
The general, special revenue, and capital projects funds follow encumbrance accounting
under which purchase orders, contracts and other commitments are recorded as an obligation
of fund balance and provide authority for the carryover of appropriations to the subsequent
year in order to complete these transactions. Encumbrances outstanding at year-end are
included in the respective fund balance categories as appropriate and do not constitute
expenditures or liabilities because the commitments will be honored during the subsequent
year.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
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 certificates of deposit, repurchase agreements, and securities with
original maturities exceeding three months. These include participating investment contracts
(U.S. government sponsored agency issues and negotiable certificates of deposit) as well as
nonparticipating investment contracts (time certificates of deposit and repurchase
agreements). Both categories of investments are stated at fair value (see Note 3). Valuations
of investments in government sponsored enterprises such as Federal National Mortgage
Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) are
based on quoted market rates. Valuations of certificates of deposits are based on cost, which
approximate fair market value, as they almost invariably are held to maturity. Investments
also consist of equity securities in the fiduciary fund financial statements. These investments
are stated at fair value based on closing quoted prices.
Real Property Taxes
The County's real property taxes are levied on July 1 each year on assessed valuation as of
January 1. The taxes become a lien on the property assessed as of the levy date. Taxes are
due and payable in two equal annual installments on August 20 and February 20.
Accordingly, real property taxes receivable as of June 30 are delinquent. Each delinquent
installment bears interest at 1 % per month and penalties of up to 10% of the amount due.
Assessments are based on 100% of estimated fair market values prior to the application of
exemptions or preferential assessments.
Inventories
Inventories consist of materials and supplies and are reported as expenditures at the time of
purchase (purchase method). Police and fire department inventories are stated using the first
in, first out (FIFO) method. Other inventories are stated at average cost.
Liquor Control
Section 281 of the Hawaii Revised Statutes requires that liquor license revenues collected be
used only for costs and expenses directly relating to operational and administrative costs
actually incurred by the liquor commission collecting such fees. The unexpended fees at
June 30, 2013 of $671,088 are reflected as a restriction of general fund balance.
-53-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads,
bridges, curbs and gutters, streets and sidewalks, drainage systems, lighting systems, and
similar items), are reported in the applicable governmental or business -type activities columns
in the government -wide financial statements. Capital assets are defined by the County as
assets with an initial, individual cost of more than $1,000 and an estimated useful life in
excess of one year. Such assets are recorded at historical cost or estimated historical cost if
purchased or constructed. Donated capital assets are recorded at estimated fair market value
at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or
materially extend the life of the asset are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed.
Interest incurred during the construction phase of capital assets of business -type activities is
included as part of the capitalized value of the assets constructed.
Capital assets of the primary government and enterprise fund are depreciated using the
straight-line method over the following estimated useful lives of the assets:
Assets Years
Infrastructure 20 to 100 years
Buildings and improvements 50 to 100 years
Ground and site improvements 20 to 50 years
Equipment 5 to 40 years
Easements Dependent on terms of easement agreement
Long-term Obligations
The County reports long-term debt of governmental funds at face value on the government -
wide statement of net position. Certain other governmental fund obligations not expected to
be financed with current available resources are also reported on the government -wide
statement of net position. Long-term debt and other obligations financed by the proprietary
funds are reported as liabilities in those funds.
Compensated Absences
Employees earn vacation credit at the rate of one and three-quarter working days for each
month of service. Up to ninety days of vacation leave credits can be accumulated per
employee. In addition, employees who work overtime can elect to take compensatory time off
instead of overtime pay. The time off is earned at the rate of one -and -a -half hours for each
hour of overtime worked. There is no statutory limit to the amount of compensatory time off
-54-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
an employee can accumulate. Both compensatory time off and vacation credits are converted
to pay upon termination of employment.
A liability for these amounts is reported in the governmental funds only if they have matured,
for example, as a result of employee resignations and retirements. All vacation and
compensatory time off pay is accrued in the government -wide statement of net position along
with the estimated liability for social security and Medicare taxes and employers' retirement
contributions on those amounts.
Sick leave accumulates without limit. Sick leave can be taken only in the event of illness and
is not convertible to pay upon termination of employment; therefore there is no related
liability. However, a County employee who retires or leaves government service in good
standing with 60 days or more of unused sick leave is entitled to additional service credit in
the Employees' Retirement System of the State of Hawaii. Accumulated sick leave at
June 30, 2013 totaled $65,452,000 for the primary government.
Leases
Leases transferring substantially all of the risks and benefits of ownership are recorded as
capital leases; other leases are operating leases (see Note 8). Capital leases are recorded as
capital asset additions at their estimated fair value at the inception of the lease and the related
present value of the future minimum lease obligations is recorded as long-term debt.
Operating lease expenditures and expenses are recognized when the lease obligation is paid.
Retirement Plan Contributions
The County's contribution to the Employees' Retirement System of the State of Hawai` 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 nonoperating items for the
proprietary funds. Operating revenues generally result from providing services in connection
with the proprietary funds' principal ongoing operations. The principal operating revenues of
the proprietary funds are fees charged to residents for rent and rental subsidies received from
the federal government.
Operating expenses include the costs associated with providing housing for tenants, such as
utilities, lease rent, and maintenance and repairs; administrative expenses; and depreciation
on capital assets. All revenues and expenses not meeting these definitions are reported as
nonoperating revenues and expenses.
-55-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
Use of Estimates
The preparation of the basic financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of assets and
liabilities, as well as disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues, expenditures, and other financing sources
and uses during the reporting period. Actual results could differ from those estimates.
Fund Balances
When both restricted and unrestricted fund balances are available for use, it is the County's
policy to use restricted fund balance first, then unrestricted fund balance. Furthermore,
committed fund balances are reduced first, followed by assigned amounts, and then
unassigned amounts when expenditures are incurred for purposes for which amounts in any of
those unrestricted fund balance classifications can be used.
The County reports the following classifications:
Nonspendable Fund Balance — Nonspendable fund balances are amounts that cannot be
spent because they are either not in spendable form, or, for legal or contractual reasons,
must be kept intact. The County has inventory included in their nonspendable fund
balance.
Restricted Fund Balance — Constraints placed on the use of these resources are either
externally imposed by creditors (such as through debt covenants), grantors, contributors
or other governments or are imposed by law (under the Hawaii Revised Statutes or
County of Hawaii Charter).
Committed Fund Balance — Committed Fund Balances are amounts that can only be used
for specific purposes as a result of constraints imposed by the County Council via
ordinances and the County Code. 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 finance
determines that such use is necessary to prevent a reduction in the level of public
services.
Assigned Fund Balance — Assigned fund balances are amounts that are constrained by the
County's intent as determined by the Mayor but are neither restricted nor committed.
The County's only assigned fund balances are in the General Fund and Capital Projects
Fund and the majority consists of the portion of fund balance that is intended to balance
the subsequent year's budget.
-56-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
Unassigned Fund Balance — This is the residual classification of the General Fund and the
Capital Projects Fund.
Net Position
When both restricted and unrestricted net position are available for use, it is the County's
policy to use restricted net position first, and then unrestricted net position.
New Accounting Pronouncements
In November 2010, GASB issued Statement No. 60, Accounting and Financial Reporting for
Service Concession Arrangements. The objective of this Statement is to improve financial
reporting by addressing issues related to service concession arrangements. The requirements
of this Statement were effective for financial statements for periods beginning after December
15, 2011 and did not have an impact on the County's financials for the year ending June 30,
2013.
In December 2010, GASB issued Statement No. 61, The Financial Reporting Entity:
Omnibus, an amendment of GASB Statements No. 14 and 34 amending the requirements of
Statement No. 14, The Financial Reporting Entity, and Statement No. 34, Basic Financial
Statements - and Management's Discussion and Analysis —for 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 inclusion of component units in the financial reporting entity. The provisions of
this statement were effective for the County for periods beginning after June 15, 2012 and did
not have an impact on the County's financials for the year ending June 30, 2013.
In December 2010, GASB issued Statement No. 62, Codification of Accounting and Financial
Reporting Guidance Contained in Pre -November 30, 1989 FASB (Financial Accounting
Standards Board) and AICPA (American Institute of Certified Public Accountants)
Pronouncements. This Statement will make it easier for preparers of state and local
government financial statements to find relevant authoritative guidance from one single
source. The provisions for this Statement were effective for the County for periods beginning
after December 15, 2011 and did not have an impact on the County's financials for the year
ending June 30, 2013.
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, deferred inflows of resources,
and net position. The provisions for this Statement were effective for the County for periods
beginning after December 15, 2011. The County implemented this Statement in fiscal year
ended June 30, 2013.
-57-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
In March 2012, GASB issued Statement No. 65, Items Previously Reported as Assets and
Liabilities. The objective of this Statement is to clarify the appropriate reporting of deferred
outflows and deferred inflows of resources to ensure consistency in financial reporting. The
provisions for this Statement are effective for the County for periods beginning after
December 15, 2012. The County has not yet determined the effect this Statement will have
on its financial statements.
In March 2012, GASB issued Statement No. 66, Technical Corrections — 2012. The
objective of this Statement is to enhance usefulness of financial reports by resolving
conflicting accounting and financial reporting guidance that could diminish the consistency of
financial reporting. The provisions for this Statement are effective for the County for periods
beginning after December 15, 2012. The County has not yet determined the effect this
Statement will have on its financial statements.
In June 2012, GASB issued Statement No. 68, Accounting and Financial Reporting for
Pensions. The Statement revises and establishes new financial reporting requirements for
most governments that provide their employees with pension benefits. The requirements for
this Statement are effective for the County for periods beginning after June 15, 2014. The
County has not yet determined the effect this Statement will have on its financial statements.
In January 2013, GASB issued Statement No. 69, Government Combinations and Disposals
of Government Operations. The objective of this Statement is to improve financial reporting
by addressing accounting and financial reporting for government combinations and disposals
of government operations. The requirements for this Statement are effective for the County
for periods beginning after December 15, 2013. The County has not yet determined the effect
this Statement will have on its financial statements.
In April 2013, GASB issued Statement No. 70, Accounting and Financial Reporting for
Nonexchange Financial Guarantees. The requirements of this Statement will enhance
comparability of financial statements among governments by requiring consistent reporting by
those governments that extend nonexchange financial guarantees and by those governments
that receive nonexchange financial guarantees. The requirements for this Statement are
effective for the County for periods beginning after June 15, 2013. The County has not yet
determined the effect this Statement will have on its financial statements.
In November 2013, GASB issued Statement No. 71, Pension Transition for Contributions
Made Subsequent to the Measurement Date. The objective of this Statement is to improve
accounting and financial reporting by addressing an issue in Statement No. 68, Accounting
and Financial Reporting for Pensions, concerning transition provisions related to certain
pension contributions made to defined benefit pension plans prior to implementation of that
Statement by employers and nonemployer contributing entities. The requirements for this
Statement are effective for the County for periods beginning after June 15, 2014. The County
has not yet determined the effect this Statement will have on its financial statements.
-58-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
Annual Budget
The County follows these procedures in establishing its operating and capital budgets:
• On or before March 1, the Mayor submits to the County Council proposed operating and
capital projects budgets for the fiscal year commencing the following July 1. The
operating budget includes proposed expenditures for the general fund and special
revenue funds, and the means of financing them. A project -length budget is submitted to
the County Council for the capital projects fund.
• The Mayor submits to the County Council amendments to the proposed operating and
capital budgets within ten working days after the close of the state legislature, but not
later than May 5.
• The County Council conducts public hearings on the proposed operating and capital
budgets after March 1 but prior to the first reading on the budget bills, which must be
after May 5.
• On or before June 30, the County Council adopts the budgets. The legal level of
budgetary control is the department level because the Mayor can transfer funds from any
unencumbered appropriation to another within a department or agency without County
Council approval. During the year, the budget may be amended by action of the County
Council, except for appropriations required by law and appropriations for debt service,
which may not be decreased or deleted. Supplemental appropriations were made during
the 2012-2013 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 $6.7 million in the general fund and $2.4
million in the special revenue funds. Legally adopted budgets include the General Fund,
Highway Fund, Sewer Fund, Solid Waste Fund, Cemetery Fund, Parking Meter Fund,
Vehicle Disposal Fund, Bikeway Fund, Workforce Investment Act Fund, Golf Course
Fund, Geothermal Relocation and Community Benefits Fund, Beautification Fund,
Hawaii County Housing Agency Fund 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.
-59-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
Formal budgetary integration is employed as a management control device during the
year for the General Fund, special revenue funds, and Capital Projects Fund. Formal
budgetary integration is not employed for debt service funds because effective budgetary
control is alternatively achieved through general obligation bond indenture provisions.
The accompanying statement of revenues, expenditures and changes in fund balances —
budget and actual (budgetary basis) for the General Fund presents a comparison of the
legally adopted budget with actual data on a budgetary basis. Accounting principles
applied for purposes of developing data on a budgetary basis differ significantly from
those used to present financial statements in conformity with GAAP. On the budgetary
basis, intergovernmental revenues are recognized when awarded by the granting agency,
encumbrances and unexpended allotments are treated as expenditures, accounts payable
are not accrued, and all leases are treated as operating leases. In preparing the financial
statements on a GAAP basis, accounts payable are accrued and treated as a reduction of
encumbrances for balance sheet presentation.
Budget to GAAP Reconciliation
The following is a summary of the adjustments necessary to convert fund balances of the
County's General Fund from a GAAP basis to a budgetary basis at June 30, 2013:
Ending fund balance — GAAP basis $53,948,607
Encumbrance adjustments:
Beginning encumbrances and unexpended allotments 3,837,693
Ending encumbrances and unexpended allotments (3,182,390)
Other adjustments (1,797,376)
Ending fund balance — Non -GAAP budgetary basis 52.806.534
CASH AND INVESTMENTS
The Director of Finance is responsible for the safekeeping of all monies paid to the County.
The Director of Finance invests any monies of the County which in the Director's judgment
are in excess of the amounts necessary for meeting the day-to-day operating needs of the
County. Under Section 46-50 of the Hawaii Revised Statutes, legally authorized investments
include obligations of or guaranteed by the U.S. government, obligations of the State,
federally insured savings and checking accounts, time certificates of deposit, and repurchase
agreements with federally insured financial institutions.
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
Cash
The County maintains a number of checking and savings accounts for various funds and with
various financial institutions. Bank deposits are under the custody of the Director of Finance.
For financial statement reporting purposes, cash and short-term investments consist of cash
and money market accounts. Cash and short-term investments also include repurchase
agreements, certificates of deposit, and government sponsored securities with original
maturities of three months or less.
The carrying amount of the County's deposits (cash, time certificates of deposit, and money
market accounts) as of June 30, 2013 was $155,705,150 for the primary government and
$4,835,351 for the fiduciary funds.
Information relating to bank balance, insurance and collateral of cash deposits is determined
on a county -wide basis. Total bank balances of deposits for the primary government and
fiduciary funds amounted to $170,335,603 at June 30, 2013. Of that amount, $170,071,430
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 $264,173
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 banks pledge collateral based on the
available bank balances to limit its exposure to custodial credit risk. All securities pledged as
collateral are held by the County's fiscal agents in the name of the County. The County also
requires that no more than 60% of the County's total funds available for deposit may be
deposited in any one financial institution, in accordance with State statutes.
Investments
The County holds investments both for its own benefit and on behalf of some of the fiduciary
funds. The County's investments of funds not required for immediate payments are
predominately comprised of government sponsored securities (equivalent to the rating in U.S.
Treasuries), repurchase agreements and certificates of deposit, while the fiduciary funds also
hold equity securities.
-61-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
The County's investments and maturities at June 30, 2013 are as follows:
Investments — Primary Government:
Certificates of deposit
Government sponsored securities
Investments — Fiduciary Funds:
Government sponsored securities
Equity securities
Investments — Agency Funds:
Government sponsored securities
1.741.343 $ -- 1.741.343
1.289.418
$ 189.525 $ -- $189,525
Interest Rate Risk: The County minimizes its exposure to interest rate risk by limiting the
maturities of investments to five years or less in compliance with state statute. The County's
policy is to hold investments until maturity and does not engage in trading for capital gains.
Credit Risk: The County's investment portfolio consists of U.S. government or agency
obligations, time certificates of deposit and repurchase agreements. These investments are
either insured by the FDIC, secured by collateral or carry a credit rating equivalent to U.S.
Treasuries.
Custodial Risk: Custodial risk is the risk of loss from the failure of the counterparty, which is
defined as any entity that obtained an investment on behalf of the County. All of the
County's deposits including repurchase agreements are secured by collateral which is kept by
a third party custodian. Broker-dealers utilized by the County are members of the Securities
Investor Protection Corporation, and all investment securities are held in the County's name.
Concentration of Credit Risk: State law limits deposits to no more than 60% of the total in
any one depository. The County seeks to further diversify its portfolio by purchasing from
different issuers, by purchasing different types of investments and by purchasing investments
at different maturities. The County also purchases its investments from a number of banks
and broker-dealers both located locally and on the mainland. As of June 30, 2013,
investments were distributed as follows: Central Pacific Bank, 38.3%; FTN Financial, 15.8%;
Multi Bank Securities, 14.0%; Stifel Nicolaus, 9.7%; First Hawaiian Bank, 6.5%; Raymond
James, 4.8%; Bank of Hawaii, 3.9%; Hawaii National Bank, 3.5%; Territorial Savings Bank,
3.5%.
-62-
Maturity
(in years)
Fair Value
Less than 1
.1-5
$ 80,508,706
$ 57,613,713
$22,894,993
45,402,848
--
45,402,848
125.911,554
57.613.71368.297.841
1.741.343 $ -- 1.741.343
1.289.418
$ 189.525 $ -- $189,525
Interest Rate Risk: The County minimizes its exposure to interest rate risk by limiting the
maturities of investments to five years or less in compliance with state statute. The County's
policy is to hold investments until maturity and does not engage in trading for capital gains.
Credit Risk: The County's investment portfolio consists of U.S. government or agency
obligations, time certificates of deposit and repurchase agreements. These investments are
either insured by the FDIC, secured by collateral or carry a credit rating equivalent to U.S.
Treasuries.
Custodial Risk: Custodial risk is the risk of loss from the failure of the counterparty, which is
defined as any entity that obtained an investment on behalf of the County. All of the
County's deposits including repurchase agreements are secured by collateral which is kept by
a third party custodian. Broker-dealers utilized by the County are members of the Securities
Investor Protection Corporation, and all investment securities are held in the County's name.
Concentration of Credit Risk: State law limits deposits to no more than 60% of the total in
any one depository. The County seeks to further diversify its portfolio by purchasing from
different issuers, by purchasing different types of investments and by purchasing investments
at different maturities. The County also purchases its investments from a number of banks
and broker-dealers both located locally and on the mainland. As of June 30, 2013,
investments were distributed as follows: Central Pacific Bank, 38.3%; FTN Financial, 15.8%;
Multi Bank Securities, 14.0%; Stifel Nicolaus, 9.7%; First Hawaiian Bank, 6.5%; Raymond
James, 4.8%; Bank of Hawaii, 3.9%; Hawaii National Bank, 3.5%; Territorial Savings Bank,
3.5%.
-62-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
Restricted Cash and Cash Equivalents and Investments
Cash and cash equivalents and investments classified as restricted assets for the primary
government at June 30, 2013 amounted to $115,921,348.
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 $75,092,166 at June 30, 2013.
Cash and investments in the Bond Redemption Fund and the Interest Fund are restricted to
debt service related payments and amounted to $19,418,552.
Cash in the Highway Fund, Bikeway Fund and Beautification Fund are restricted to costs
incurred relating to highways and streets and the beautification of such items and amounted to
$16,717,909.
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 $671,088 and
$3,955,779, respectively.
Tenant security deposits received by the County for the Kulaimano Elderly Housing Project
and the Ouli Ekahi Affordable Housing Project are recorded as restricted assets. Such funds
amounted to $12,334 and $27,114, respectively, at June 30, 2013.
An operating reserve fund was established by the Ouli Ekahi Affordable Housing Project
pursuant to an agreement with the Hawaii Housing Finance and Development Corporation,
who are the holders of the project's note. This restricted reserve amounted to $26,406 at June
30, 2013.
-63-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
4. RECEIVABLES
Receivables as of June 30, 2013, 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:
Net total receivables S4A&9 493 $46,219,906
During fiscal year 2005, the County issued $3,887,493 in general obligation bonds on behalf
of Improvement District No. 18, an agency fund. On February 12, 2013 bonds were issued to
refund the outstanding principal balance of $1,345,945 for the Improvement District. At June
30, 2013, the outstanding balance of $1,345,945 is reflected in the government -wide
statement of net position as a receivable (see Note 10).
Business -type activities:
Enterprise
Capital
Other
Accounts receivable:
General
Projects
Governmental
169
Gross receivables
Fund
Fund
Funds
Total
Real property taxes
$25,213,665
$ --
$ --
$25,213,665
Accounts receivable:
Sewer
--
--
2,218,373
2,218,373
Solid waste
--
--
2,280,764
2,280,764
Capital projects
--
911,667
--
911,667
Intergovernmental
10,768,812
5,688,423
1,715,371
18,172,606
Gross receivables
35,982,477
6,600,090
6,214,508
48,797,075
Less: allowance for
uncollectibles
(852,154)
-
(1,725,015)
(2,577,169)
Net total receivables S4A&9 493 $46,219,906
During fiscal year 2005, the County issued $3,887,493 in general obligation bonds on behalf
of Improvement District No. 18, an agency fund. On February 12, 2013 bonds were issued to
refund the outstanding principal balance of $1,345,945 for the Improvement District. At June
30, 2013, the outstanding balance of $1,345,945 is reflected in the government -wide
statement of net position as a receivable (see Note 10).
Business -type activities:
.M
Enterprise
Funds
Accounts receivable:
Rent
$4,810
Other
169
Gross receivables
4,979
Less: allowance for
uncollectibles
Net total receivables
4 979
.M
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
5. INTERFUND RECEIVABLES AND PAYABLES
Interfund receivables and payables consist of the following at June 30, 2013:
Receivable Fund
General fund
Capital projects fund
Other governmental funds
Total
Other governmental funds
Enterprise funds
Payable Fund
Amount
Capital projects fund
$ 870,680
Other governmental funds
223,077
1,093,757
General fund
456,714
Other governmental funds
269,018
725,732
General fund
92,033
Capital projects fund
131,300
Other governmental funds
17,956
241.289
20 0778
Enterprise funds 1 350
General Fund 31 3 4
The above interfund balances result from the time lag between the dates that interfund goods
and services are provided or reimbursable expenditures occur, transactions are recorded, and
payment between funds are made.
Transfers for the fiscal year ended June 30, 2013 consisted of the following:
Transfers out:
Other
General Governmental
Fund Funds Total
Transfers in:
Capital Projects Fund $ -- $3,460,483 $ 3,460,483
Other governmental funds 47,895,968 -- 47,895,968
47.895.968
SIALO 483 51.356.451
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.
-65-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
6. CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2013 for the County was as follows:
Balance Balance
July 1, Retirements/ June 30,
2012 Additions Transfers 2013
Governmental activities:
Capital assets not being depreciated:
Land and
improvements
$ 129,569,750
Easements
3,012,778
Construction work in
3,427,578
progress
31,937,409
Total capital assets not
73,114,432
being depreciated
164,519,937
Capital assets being depreciated:
Buildings and
556,961,770
improvements
527,813,137
Equipment
120,305,392
Easements
439,300
Infrastructure
430,483,939
Total capital assets
being depreciated
1,079,041,768
Less accumulated depreciation for:
Buildings and
$ 33,995,418
$ --
$ 163,565,168
414,800
--
3,427,578
38.704,214
(28,164,291)
42,477,332
73,114,432
(28,164,291)
209,470,078
30,391,984
(1,243,351)
556,961,770
6,301,956
(1,522,455)
125,084,893
--
--
439,300
46,512.098
--
476.996,037
83,206,038 (2,765,806) 1,159,482,000
improvements
(72,331,213)
(7,939,154)
68,034
(80,202,333)
Equipment
(70,215,601)
(7,632,077)
1,348,094
(76,499,584)
Easements
(219,650)
(146,434)
--
(366,084)
Infrastructure
(183,545,897)
(18,480,825)
(202,026,722)
Total accumulated
depreciation
(326,312,361)
(34,198,490)
1,416,128
(359,094,723)
Total capital assets
being depreciated,
net
752,729,407
49,007,548
(1,349,678)
800,387,277
Governmental
activities capital
assets, net$917.249.344
122.121.980
($29.513.969)1.009.857,355
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
Balance
Retirements/ June 30,
Additions Transfers 2013
$ 753,877
457,179
Balance
1,593,187
July 1,
--
2012
Business -type activities:
(5,352)
Capital assets not being depreciated:
Land
753,877
Capital assets being depreciated:
(32,234)
Buildings and
(838,512)
improvements
1,13 6,008
Ground and site
(8.020)
improvements
261,000
Equipment
103,024
Total capital assets
444,734
being depreciated
1,500,032
Buildings and
improvements
(806,278)
Ground and site
improvements
(193,420)
Equipment
(87,057)
Total accumulated
depreciation
(1,086,75 5)
Total capital assets
being depreciated,
net
413,277
Balance
Retirements/ June 30,
Additions Transfers 2013
$ 753,877
457,179
--
1,593,187
11,850
--
272,850
20,109
(5,352)
117,781
489,138
(5,352)
1,983,818
(32,234)
--
(838,512)
(4,150)
--
(197,570)
(8.020)
5,352
(89,725)
(44,404)
5,352
(1,125,807)
444,734
--
858,011
Business -Type
activities capital
assets, net1 167 154 444 34 $ --11&11-8 88
The County received $12.5 million as a partial settlement from a developer that did not
complete the required infrastructure for their development. The funds are to be used by the
County to construct the roadway that was initially required of the developer. As of June 30,
2013, approximately $160,000 was expended and capitalized.
-67-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
Depreciation expense was charged to functions/programs of the primary government as
follows:
Governmental activities:
Capital
General government
$ 2,974,208
Public safety
2,950,175
Highways and streets
19,888,722
Sanitation
4,851,858
Health, education and welfare
1,817,852
Culture and recreation
1,715,675
Total depreciation expense — governmental activities
34.198,490
Business -type activities:
--
Kulaimano Elderly Housing Project
$34,422
Ouli Ekahi Affordable Housing Project
9,982
Total depreciation expense — business -type activities
44.404
7. DEFERRED REVENUE:
Deferred revenue consists of the following at June 30, 2013:
Governmental activities:
Real property taxes
Liquor control revenue
Sewer revenue
Housing revenue
Solid waste revenue
Intergovernmental
Total presented in
fund financial
statements
Less adjustments for
accrual of revenues
Total government -
wide financial
statements
2.575.025 52 8 $ 11.9983.440.011
-68-
Capital
Other
Total
General
Projects
Governmental
Governmental
Fund
Fund
Funds
Funds
$ 24,881,442
$ --
$ --
$ 24,881,442
198,310
--
--
198,310
--
--
1,351,064
1,351,064
--
--
93,174
93,174
--
--
1,435,056
1,435,056
1,856,784
852,988
--
2,709,772
26,936,536
852,988
2,879,294
30,668,818
(24,361,511)
--
(2,867,296)
(27,228,807
2.575.025 52 8 $ 11.9983.440.011
-68-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
Business -type activities:
Enterprise
Funds
Unearned rental income 1 605
8. LEASES
The County leases machinery and equipment under noncancellable leases expiring at various
dates through February 2018. 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 $6,697,301 and $1,609,301, respectively,
and the related present value of the remaining obligations under the capital leases amounting
to $3,632,420 at June 30, 2013 are included in capital assets and long-term debt, respectively.
The County also leases land, office facilities and other equipment under noncancellable
operating leases expiring through July 2029. Expenditures for such operating leases were
$1,847,541 for the fiscal year ended June 30, 2013.
The future minimum payments under capital and operating leases at June 30, 2013 are as
follows:
Year Ending June 30:
2014
2015
2016
2017
2018
2019-2023
2024-2028
2029-2030
Total minimum lease payments
Less amount representing
interest
Obligations under capital leases
Capital
Operating
Leases
Leases
$1,409,426
$1,473,506
1,105,824
1,305,269
719,390
1,251,840
405,355
966,758
135,432
899,477
-- 1,342,570
-- 135,883
-- 16.422
3,775,427 7 391 725
(143,007)
3 632 420
9. SOLID WASTE LANDFILL CLOSURE AND POSTCLOSURE CARE COSTS
Hilo Landfill The County owns and operates a landfill located in the city of Hilo. State and
federal laws require the County to place covers on certain landfill sites and to monitor and
maintain the sites for thirty years after the facility is closed. Although the closure and
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
postclosure care costs will be paid near and after the date that the landfill stops accepting
waste, the County recognizes a portion of the closure and postclosure care costs in each
operating period. The liability for these costs is included in the government -wide statement of
net position. The amount recognized each year is based on the landfill capacity used as of the
statement of net position date. At June 30, 2013, the County recognized a liability of
$13,711,000, based on the use of 93% of the estimated capacity of the landfill. During the
fiscal year ended June 30, 2013, there were no expenditures incurred for the closure of the
landfill. The remaining $1,019,000 in estimated cost of closure and postclosure care will be
recognized as the remaining estimated capacity is used. The estimated remaining useful life
of the landfill is approximately two years. These amounts are based on what it would cost to
perform the required closure and postclosure care in 2013. 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
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 permitted capacity is reached. In accordance
with state statute, the County is allowed to continue operations provided that the County acts
consistently with the permit previously granted and the extension application, plans,
specifications and all other information contained therein.
Kealakehe In October 1993, the County closed its Kealakehe landfill in Kona. Under state
and federal requirements, the County would have to monitor and maintain this site for ten
years from the closure date. However, the County anticipates monitoring and maintaining the
site for thirty years because there is presently a subterranean fire which requires active
management. The estimated cost of closure and postclosure is $16,300,000, based on what it
would cost to perform the required closure and postclosure care in 2013. Actual costs may be
higher due to inflation, changes in technology, or changes in regulations. Through
June 30, 2013, $8,026,000 was spent on closure and postclosure care of the landfill. The
remaining estimated liability of $8,274,000 is included in the government -wide statement of
net position. During the year ended June 30, 2013, $328,000 was spent on closure of the
landfill. The County is providing financial assurance for postclosure care and remediation
through self insurance as explained below.
Pu'uanahulu In May 1993, the County contracted with a private company to construct and
operate a new landfill on County land at Pu'uanahulu in West Hawaii. The present contract
calls for County employees to perform the daily operations of the landfill, and for the private
company to retain the overall management as well as perform all construction work on the
landfill cells. Under the terms of the contract, the County has no responsibility for
-70-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
remediation, closure or postclosure care. Accordingly, no liability for this landfill is included
in the County's financial statements.
Financial Assurance For fiscal year 2013, the County has provided for financial resources
that will be available to provide for closure, postclosure care and remediation or containment
of environmental hazards at the above landfills, except Pu`uanahulu. The Environmental
Protection Agency's financial assurance rules include a local government financial test
consisting of a financial component, a public notice component, and a recordkeeping
component. Local governments are required to satisfy each of the three components to pass
the annual test. Management believes that the County has satisfied each of the components of
the local government financial assurance requirements.
10. LONG-TERM DEBT
General Obligation Bonds
The County issues general obligation bonds to provide funds for the acquisition and
construction of major capital facilities. These bonds have been issued by the County for the
primary government, component unit activities (see Note 14) and an improvement district.
The following is a summary of general obligation bond transactions reported in the
governmental activities section of the government -wide statement of net position for the
County for the fiscal year ended June 30, 2013:
Bonds
Issue
Bond Balance
Bond Balance
Due Within
Authorized
Amount
July 1, 2012
Issues
Retirements
June 30, 2013
One Year
1993 Ref & PI
$86,770,000
$ 5,945,000
$
($ 5,945,000)
$
$
2003 Series A
36,310,000
27,070,000
(25,275,000)
1,795,000
1,795,000
2004 Series A
30,000,000
23,990,000
(21,100,000)
2,890,000
1,410,000
2004 Ref Series B
19,545,000
8,870,000
(2,055,000)
6,815,000
2,160,000
2004 Ref Series C
5,050,140
1,678,768
(539,604)
1,139,164
558,052
2004 PI Series A
2,776,400
1,952,523
(1,952,523)
2004 PI Series B
920,000
838,003
(838,003)
2006 Series A
25,000,000
20,797,500
(972,500)
19,825,000
1,022,500
2007 Series A
85,000,000
73,570,000
(3,200,000)
70,370,000
3,360,000
2007 Series B
20,820,000
15,470,000
(1,925,000)
13,545,000
2,000,000
2007 Series C
10,787,388
9,991,704
(828,294)
9,163,410
860,904
2008 Series A
50,000,000
46,600,000
(1,810,000)
44,790,000
1,885,000
2010 Series A
26,493,750
26,493,750
26,493,750
2010 Series B
18,506,250
18,506,250
18,506,250
2013 Series A
58,509,892
58,509,892
58,509,892
1,660,929
2013 Series B
21,010,000
21,010,000
21,010,000
2013 Series C
18,470,000
18,470,000
18,470,000
515,968,820
281,773,498
97,989,892
(66,440,924)
313,322,466
16,712,385
Add unamortized
premium
25,152,930
5,579,965
17,569,800
(2,207,148)
20,942,617
1,453,119
Less deferred amount
on refunding
(3,510,905)
(1,184,914)
(682,146)
277,496
(1,589,564)
(306,272)
537.610.845
286.168.549
114.877.546
($68.370.5761
$332 675,519
17.859.232
-71-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
The 2010 Series B bonds were issued as bonds designated as "Recovery Zone Economic
Development Bonds" under the American Recovery and Reinvestment Act of 2009. The
County will receive a cash subsidy payment from the United States Treasury equal to 45% of
the interest payable on the Series B bonds.
General obligation bonds payable reported in the governmental activities section on the
government -wide statement of net position at June 30, 2013 are comprised of the following
individual issues:
Public improvement (PI) and/or refunding bonds:
2003 Series A at 2.5% to 5.125%, due through 2013
$ 1,795,000
2004 Series A at 3.25% to 5.25%, due through 2014
2,890,000
2004 Refunding Series B at 3.5% to 5.0%, due through 2015
6,815,000
2004 Refunding Series C at 3.25% to 3.7%, due through 2014
1,139,164
2006 Series A at 4.0% to 5.0%, due through 2026
19,825,000
2007 Series A at 4.0% to 5.0%, due through 2027
70,370,000
2007 Series B at 3.75% to 5.0%, due through 2018
13,545,000
2007 Series C at 4.0% to 5.0%, due through 2021
9,163,410
2008 Series A at 4.0% to 6.0%, due through 2028
44,790,000
2010 Series A at 1.7% to 5.0%, due through 2030
26,493,750
2010 Series B at 3.335% to 6.1%, due through 2030
18,506,250
2013 Series A at 2.0% to 5.0%, due through 2033
58,509,892
2013 Series B at 3.0% to 5.0%, due through 2024
21,010,000
2013 Series C at 4.0% to 5.0%, due through 2025
18,470,000
Total general obligation bonds payable
$313,322,466
Annual debt service requirements to maturity for the above general obligation bonds are as
follows:
Fiscal year ending June 30
2014
2015
2016
2017
2018
2019-2023
2024 —2028
2029 —2033
Governmental Activities
Principal
Interest
$ 16,712,385
$ 14,551,304
19,396,450
13,558,978
19,640, 854
12, 676,441
18,052,456
11,811,628
18,937,148
10,918,429
96,093,588
41,713,484
91,965,835
19,591,208
32,523,750
3,443,954
Total 313.322.466 $128,265,426
-72-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
Refunded Bonds
2013 Series In fiscal year 2013, the County issued a mixture of refunding bonds,
$8,029,843 and new bonds, $50,480,049 as the 2013 Series A general obligation bond issue.
The refunding bonds have a true interest cost of 1.567% and were issued to current refund the
$8,029,843 of loans from the State Water Pollution Control Revolving Fund (SRF) and
general obligation bonds previously issued on behalf of Improvement District No. 18.
The County's total debt service requirements over the next seventeen years will decrease by
$1,704,150 as a result of the refunding, and the net economic gain (difference between the
present values on the old and new debt) after taking into account all allocable costs of
issuance of the bonds was $1,516,044.
2013 Series B Also, in fiscal year 2013, the County issued $21,010,000 in refunding bonds as
the 2013 Series B general obligation bond issue. The refunding bonds have a true interest cost
of 1.639% and were issued to advance refund $23,550,000 of the total callable bonds
outstanding of the 2003 Series A general obligation bond issue.
The bonds refunded bore interest at rates ranging from 3.000% to 5.000%. The par amount of
$21,010,000 plus a premium of $3,216,926, minus $107,916 in underwriting fees, insurance
and other issuance costs resulted in net proceeds of $24,119,010. The net proceeds were used
to purchase U.S. government securities, which were deposited in an irrevocable trust
administered by an escrow agent and provided full payment on the outstanding 2003 Series A
refunded bonds on July 15, 2013. The bonds were considered defeased and are not included
in the government -wide statement of net position.
The County's total debt service requirements over the next eleven years will decrease by
$4,483,238 as a result of the refunding, and the net economic gain (difference between the
present values on the old and new debt) after taking into account all allocable costs of
issuance of the bonds was $4,063,240.
2013 Series C Also, in fiscal year 2013, the County issued $18,470,000 in refunding bonds
as the 2013 Series C general obligation bond issue. The refunding bonds have a true interest
cost of 1.827% and were issued to advance refund the $19,760,000 of callable bonds
outstanding of the 2004 Series A general obligation bond issue.
The bonds refunded bore interest at rates ranging from 4.000% to 5.000%. The par amount of
$18,470,000 plus a premium of $2,863,307, minus $100,798 in underwriting fees, insurance
and other issuance costs resulted in net proceeds of $21,232,509. The net proceeds were used
to purchase U.S. government securities, which were deposited in an irrevocable trust
administered by an escrow agent and will provide full payment on the outstanding 2004
Series A refunded bonds on July 15, 2014. The bonds were considered defeased and are not
included in the government -wide statement of net position.
-73-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
The County's total debt service requirements over the next twelve years will decrease by
$3,321,784 as a result of the refunding, and the net present value savings was $2,998,797.
As of June 30, 2013, bonds and loans outstanding considered defeased amounted to
$43,310,000.
Bond Premiums
At June 30, 2013, total unamortized bond premiums were $20,942,617, which are being
amortized over the remaining life of the respective bond issues.
Bonds Authorized and Unissued
The County Council has authorized the issuance of $296.1 million in general obligation bonds
to finance specified capital improvement projects. At June 30, 2013, $151.1 million was not
yet issued.
Subsequent Events On July 24, 2013, the County Council authorized the issuance of
$1,169,000 in general obligation bonds for the County to finance specified capital
improvement projects. On September 19, 2013 these bonds were issued for Improvement
District No. 19. 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.
General Obligation Bond Anticipation Notes
The following is a summary of general obligation bond anticipation note transactions for the
County for the fiscal year ended June 30, 2013:
Issue Balance
Authorized Amount July 1, 2012
2012 Series B R-4 $ 10,000,000 $ 10,000,000
2012 Series B R-5 15,000,000 15,000,000
2012 Series B R-6 8.000.000 8.000.000
$33.000.000
State Revolving Fund Loans
Issues Retirements
$ 10,000,000
15,000,000
8.000.000
$33.000.000 $ -- 33.000.000
Balance
June 30, 2013
The County has obtained loans to assist in financing mandated wastewater projects from the
State Water Pollution Control Revolving Fund (SRF). The purpose of this revolving fund is
to provide low-interest, long-term loans and other financial assistance to the four counties in
the state to finance construction of wastewater projects. The County has eight projects
approved for funding with these loans.
-74-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
The schedule below shows the County's SRF transactions for the fiscal year ended June 30,
2013:
Interest
2014
$ 995,017
$ 113,581
2015
Loans
Approved
Loan Balance
Retirements
Loan Balance
Due Within
Authorized
Amount
July 1, 2012 Additions
/ Forgiveness
June 30, 2013
One Year
Hilo WWTP
$12,724,311
$ 805,882 $
($ 805,882)
$ --
$ --
Waiakea Mill
1,300,000
162,007
(80,004)
82,003
82,003
Waiakea
Houselots
459,321
29,209
(29,209)
--
--
Waiakea
Houselots II
5,024,266
2,158,941
(2,158,941)
Ainako A&B
2,239,174
337,417
(337,417)
Kalanianaole
1,499,944
340,851
(340,851)
KalanianaoleRH
1,615,980
1,119,567
(1,119,567)
Alii Drive A&B
3,210,243
418,345
(418,345)
Alii Drive C&D
3,780,000
793,877
(793,877)
Alii DriveE&F
2,112,654
563,171
(563,171)
Waiaha Bay
3,697,893
819,045
(819,045)
--
--
Kealakehe
1,300,071
161,712
(79,858)
81,854
81,854
Holualoa Bay
3,080,000
888,566
(888,566)
--
--
Paukaa CCS
2,143,448
898,384
(898,384)
--
--
Cesspool
Conversion
8,363,773
6,390,266
(426,092)
5,964,174
428,156
Pahoehoe
2,817,760
1,484,497
(1,484,497)
--
--
HonokaaLCC
4,811,709
2,776,904 670,009
(203,385)
3,243,528
86,151
Queen
Liliuokalani
10,186,277
8,901,985 --
(712,603)
8,189,382
238,239
Kalanianaole
8,621,409
-- 4.321,342
(1,000,000)
3,321,342
78,614
$78.988 233
$291SQ626 4.991351
(P13.159.6941
R20_R82.283
$Q1Z
The loans bear interest at 0.50% to 2.50%, exclusive of a 0.25% to 1.0% loan fee, and require
payments through fiscal year 2032.
Debt service to maturity for disbursements to date on these projects are as follows:
Governmental Activities
Fiscal year ending June 30:
Principal
Interest
2014
$ 995,017
$ 113,581
2015
1,244,959
146,819
2016
1,251,145
137,516
2017
1,257,495
128,034
2018
1,263,750
118,631
2019-2023
6,414,280
449,860
2024 -2028
5,888,281
209,172
2029 -2032
2,567,356
37,831
Total
$20,882,283
$1,341,444
-75-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
Other General Long -Term Obligations
The following is a summary of other general long-term obligations transactions for the fiscal
year ended June 30, 2013:
Governmental activities:
Compensated absences
Claims and judgments
(see Note 12)
Capital leases
(see Note 8)
Landfill costs payable
(see Note 9)
Other post employment
benefit obligation
(see Note 13)
Total
Balance
Balance
Due Within
July 1, 2012
Additions*
Payments
June 30, 2013
One Year
$32,580,579
$10,062,763
($10,478,232)
$32,165,110
$7,540,581
10,447,107
4,450,044
(2,492,689)
12,404,462
2,608,535
3,803,618
1,306,791
(1,477,989)
3,632,420
1,335,930
21,424,000
888,949
(327,949)
21,985,000
193,821
22,340,332 29,712,000 (13,891,830) 38.160,502 --
90.595.636 46.420.547 ($28.668.6891 108.347.494 $11,678,867
* Net of new claims liability and existing claims resolved at less than previous estimate.
Historically, the County's general fund has been used to liquidate the majority of other long-
term liabilities, including the other post employment benefit obligation and the compensated
absences since most employees are paid by the general fund.
Fund Balances - Debt Service Funds
The fund balance in the debt service funds at June 30, 2013 includes $16,732,747, which is
reserved for principal payments on general obligation bonds and $2,393,875, which is
reserved for the payment of interest on the bonds.
Enterprise Fund Notes, Bond and Loan Payable
On February 12, 2013, the County issued general obligation bonds on behalf of Kulaimano
Elderly Housing Project (Project) to pay off its two notes payable to the U.S. Department of
Agriculture, Farmers Home Administration with principal and interest balances aggregating
$835,108. The Project is responsible for the debt service payment related to their portion of
the bonds, which is also secured with the County's general obligation pledge. Because the
Project is responsible for only a portion of the total bonds issued, it was decided that the
Project would continue to make bond payments equivalent to its previous monthly installment
payments of $7,826 on the old notes at 5.547% interest. Under this payment schedule, the
Project will make contributions through 2025 of the bonds 2032 maturity date.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
The following is a summary of the Project's bond payable transactions for the fiscal year
ended June 30, 2013:
Balance at July 1, 2012
$851,306
Deductions
(20,182)
Balance converted to
42,317
bond payable
831,124
Add interest payable
36,278
to bond
3,984
Balance at June 30, 2013
835,108
Less current portion
(24,071)
Note payable, net of
current portion
kALI 037
The following is a summary of the annual maturities for the enterprise fund bond payable:
Fiscal year ending June 30
2014
2015
2016
2017
2018
2019-2023
2024 —2026
Total
Business-tvne Activities
Principal
Interest
$ 24,071
$ 45,095
50,187
42,317
53,043
39,381
56,061
36,278
59,251
32,999
350,832
108,885
241,663
13,475
835 108 318 430
On October 29, 2012, the County assumed the loan of its lessee Ouli Ekahi Partnership with
the Hawaii Housing Finance and Development Corporation in the amount of $478,430. The
loan is non-interest bearing and matures on February 27, 2041. In exchange, the County
assumed ownership of the Ouli Ekahi project which consists of a 33 single family affordable
rental housing project.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
The following is a summary of enterprise fund loan payable transactions for the fiscal year
ended June 30, 2013:
Loan assumption
$478,430
Deductions
(16,905)
Balance at June 30, 2013
461,525
Less current portion
(16,500)
Loan payable, net of
current portion
445 025
The following is a summary of the annual maturities for the enterprise fund loan payable:
Fiscal year ending June 30
2014
2015
2016
2017
2018
2019-2023
2024 —2028
2029 —2033
2034 —2038
2039 —2041
Total
Special Assessment Bonds
Business-tvne Activities
Principal
$ 16,500
16,500
16,500
16,500
16,500
82,500
82,500
82,500
82,500
49,025
461 525
The County has issued general obligation bonds on behalf of Improvement District No. 18 for
water improvements (see Note 4). These bonds were then refunded by a portion of the 2013
Series A Bonds that were issued. The Improvement District is responsible for the payment of
the debt service on these bonds, but the County remains liable because they are general
obligations of the County. The improvement district's share of the refunded bonds matures
annually through 2027 and bear interest at the previous rates of 4.375% to 4.75%. Total
general obligation bonds payable included in the government -wide statement of net position
were $1,345,945 at June 30, 2013.
The bonds are secured by a first lien on the land benefited by the improvements, and are to be
repaid from the annual assessments levied against the owners of the land. The County acts as
an agent for the property owners within the improvement districts to collect assessments
receivable, forward payments to bond -paying agents at appropriate dates and, if required,
administer foreclosure proceedings.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
The following is a summary of bond transactions for Improvement District No. 18,
Coastview/Wonderview Water Improvements, for the fiscal year ended June 30, 2013:
Balance at July 1, 2012 $2,790,526
Deductions (1.444.581)
Balance at June 30, 2013 JL345-945
945
The following is a summary of the annual maturities for the improvement district general
obligation bonds:
Fiscal year ending June 30
2014
2015
2016
2017
2018
2019-2023
2024 –2028
Total
Principal
Interest
$ 64,014
$ 69,406
66,993
58,118
70,111
54,929
73,373
51,590
76,788
48,096
440,999
182,091
553.667
66.798
1 345 945 31 028
11. COMMITMENTS AND CONTINGENCIES
Contractual commitments – Contractual commitments for capital projects, expenses, and
supplies at June 30, 2013, 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 $ 3,182,390
Capital projects fund 29,304,525
Nonmajor funds 9,520,305
42.007.220
Contractual commitments for the enterprise funds were immaterial.
Intergovernmental revenues – The County has received federal and state grants for specific
purposes that are subject to review and audit by grantor agencies. Such audits could lead to
requests for reimbursement to the grantor agency for expenditures disallowed under terms of
the grants. In the opinion of management of the County, disallowed costs, if any, would not
be material.
Claims – Numerous claims and lawsuits have been filed against the County in the normal
course of its operations. A liability for probable losses is included on the government -wide
statement of net position (see Note 12). Although the outcome of the various claims and
lawsuits is not presently determinable, in the opinion of the County's Corporation Counsel,
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
the resolution of such matters will not have a material adverse affect on the financial
condition of the County.
ADA compliance — The County entered into two stipulated agreements (or Consent Decrees)
approved by the federal district court judges to implement provisions of the Americans with
Disabilities Act ("ADA"). With respect to the first stipulated agreement, filed on October 2,
1997, relating to curb cuts, the County, with the help of a consultant, surveyed 669
intersections, then ranked them in order of priority. A transition plan, along with a funding
commitment, was approved by the County Council. The total cost of all curb cuts was
estimated to be $6.2 million. The cost of the first phase of the plan was $3 million, to be used
in high priority areas such as government facilities, schools, and hospitals. The remaining
cost was intended to cover curb cuts at parks and in low-density single family residential
areas. All corrective action was to be completed by July 2005, with an estimated 682 ramps
to be completed. Funding allocated for this effort is $10.6 million. Since the proposed
timetable proved to be too ambitious, the parties amended the agreement to require
contracting by July 2005, rather than completion by that date. Pursuant to the April 2005
Stipulation of the Parties and Order of the Court, all curb ramps for 2005 and most curb
ramps for 2004 were deferred. In the first phase, construction of curb ramps commenced in
2000 and ended in 2004, whereby 229 curb ramps were completed. In the second phase, 153
proposed curb ramps were deferred and 161 curb ramps were to be constructed. As of May
21, 2008, there were approximately 204 curb ramps (which included at least 151 of the 161
curb ramps that were required by the amended transition plan) installed in Hilo, Waikoloa
and Kona at a total cost of close to $4.8 million. In addition, the Department of Public Works
has developed and advertised Procedures for Requesting New Curb Ramps or Modifications
to Existing Curb Ramps ("Curb Ramp Request") within the County Streets, and the Curb
Ramp Request is available on the Department of Public Works web page. On September 20,
2012, the close-out order of the consent decree was filed, thus dismissing the curb ramp case
with prejudice, and a copy of "County of Hawaii's Accessibility Design Guidelines and
General Policies and Procedures, Curb Ramps within Public Rights -of -Way" (June 2012) was
attached as an exhibit to that order.
The second stipulated agreement, filed on June 4, 1998, relates to the Department of Parks
and Recreation (Parks). The agreement required Parks to establish practices, policies and
procedures regarding its programs, and prepare a transition plan by the middle of the year
2000. The self-evaluation and transition plan for programs, practices and procedures has
been completed and approved by the County Council. The cost impact of implementation is
not material because the necessary modifications are primarily procedural. 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 was 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
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
repairs was $17.5 million, with another $4 million of federal funding anticipated through
community development block grants over the next 2 years. Since 2000, Parks has requested
$2 to $3 million a year for the different park facilities' ADA projects. The Department of
Public Works has requested an additional $2 million a year for the other County ADA
facilities' project. Because of the substantial hardships predominantly incurred in the funding
and cost aspects of the implementation of the Original Transition Plan, the learning curve
process, and the timing and scheduling of the different stages of work for each project, the
parties worked on a plan to implement the Transition Plan with the assistance of a federal
district court Monitor and an ADA Specialist, to obtain extensions on the initial deadlines for
completion that were set in the Original Transition Plan and to establish a Revised Transition
Plan to satisfy the requirements of the ADA. The County had spent $42.0 million for the
construction and design fees to complete 50 park facilities (some having multiple ADA work
being completed). There are four park facilities where construction has progressed; 29 park
facilities that must be completed; and Parks estimated costs for completion is $15.1 million as
of June 30, 2013. On March 23, 2012, the close-out of the consent decree was filed, whereby
the Court and parties established a reasonable four year timeline to complete the remaining
ADA work by December 31, 2016. In addition, the County's ADA coordinator (Equal
Opportunity Officer) has access to an identifiable account of at least $50,000 to handle
requests for reasonable accommodations for County departments; and the procedures for
these requests have been finalized and are available on the Human Resources Department's
Equal Opportunity and the ADA web page.
12. RISK MANAGEMENT
The County is exposed to various risks of losses related to torts; theft of, damage to, and
destruction of assets; errors and omissions; injuries to employees; and natural disasters. The
County maintains fire and commercial multiple peril insurance on County facilities, flood
insurance on selected structures, medical malpractice insurance for emergency medical
technicians, aviation liability for helicopter operations, liability coverage on transit buses and
privately owned police vehicles, and property damage coverage on County Police fleet
vehicles. The County maintains Fire and property coverage on several County Housing
projects (Kulaimano, Ouli Ekahi, and four model homes at Kamakoa Nui). There was no
reduction in insurance coverage during the year from coverage in the prior year. During the
past three fiscal years, the amount of settlements in cases covered by insurance has not
exceeded the insurance coverage. The County is substantially self-insured for the majority of
its vehicles as well as for all other perils including workers' compensation and general
liability. The liability for claims and judgments is reported on the government -wide statement
of net position and the majority will be liquidated from the County's general fund.
Liabilities are reported when it is probable that a loss has occurred and the amount of that loss
can be reasonably estimated. These losses include an estimate of claims that have been
incurred but not reported (IBNR). Claim liabilities, including IBNR, are based on the
estimated ultimate cost of settling the claims, and include incremental costs for the hiring of
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
special counsel and expert witnesses. Claims liabilities are estimated by a case-by-case
review of all claims and the application of historical experience to outstanding claims.
Estimates of IBNR are based on historical experience. The liability for claims and judgments
is reported on the government -wide statement of net position. At June 30, 2013, the amount
of this liability was $12,404,462. This is the County's best estimate based on available
information. Changes in the reported liability since July 1, 2011 are given below.
Workers'
General
Compensation
Liability
Balance at July 1, 2011
$ 1,668,899
Incurred claims (including IBNR)*
598,474
Claim payments
(1,302,957)
Balance at June 30, 2012
$ 964,416
Incurred claims (including IBNR)*
1,625,532
Claim payments
(176,129)
Balance at June 30, 2013
2.413.819
Workers'
Total
Compensation
Liabili
$ 9,228,238
$ 10,897,137
2,551,526
3,150,000
(2,297,073)
(3,600,030)
$ 9,482,691
$ 10,447,107
2,824,512
4,450,044
(2,316,560)
(2,492,689)
9.990.643
12.404.462
*Net of new claims liability and existing claims resolved at less than previous estimate.
13. EMPLOYEE BENEFIT PLANS
Pension Plan
Plan description All eligible employees of the County are required by Chapter 88 of the
Hawaii Revised Statutes (HRS) to become members of the Employees' Retirement System
of the State of Hawaii (the ERS), a cost-sharing multiple -employer defined benefit pension
plan. The ERS provides retirement, survivor, and disability benefits with multiple benefit
structures known as the contributory, hybrid, and noncontributory plans. All contributions,
benefits, and eligibility requirements are established by Chapter 88, HRS, and can be
amended by legislative action.
The ERS regards the County, including its component unit, as one employer. Therefore,
separate information for the primary government and its component unit is not available. All
information given below on the pension plan is for the reporting entity as a whole, including
both the primary government and its component unit.
Employees covered by Social Security on June 30, 1984 were given the option of joining the
noncontributory plan or remaining in the contributory plan. All new employees hired after
June 30, 1984 and before July 1, 2006, who are covered by Social Security, were generally
required to join the noncontributory plan. Qualified employees in the contributory and
noncontributory plan were given the option of joining the hybrid plan effective July 1, 2006,
or remaining in their existing plan. Starting July 1, 2006, all new employees covered by
Social Security are required to join the hybrid plan.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
The three plans provide a monthly retirement allowance equal to the benefit multiplier
percentage (1.25% or 2.00%) multiplied by the average final compensation (AFC) multiplied
by years of credited service. The AFC is the average salary earned during the five highest
paid years of service, including the payment of salary in lieu of vacation, or three highest paid
years of service, excluding the payment of salary in lieu of vacation, if the employee became
a member prior to January 1, 1971. The AFC for members hired on or after this date is based
on the three highest paid years of service, excluding the payment of salary in lieu of vacation.
For postretirement 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 make contributions for these members. Under the
contributory plan, employees may retire with full benefits at age 55 and 5 years of
credited service, or may retire early at any age with at least 25 years of credited service
and reduced benefits. The benefit multiplier is 2.0% for employees covered by Social
Security.
Police officers, fire fighters and certain other members that are not covered by Social
Security contribute 12.2% of their salary and receive a retirement benefit using the
benefit multiplier of 2.5% for qualified service, up to a maximum of 80% of AFC. These
members may retire at age 55 with 10 years of credited service or at any age with 25
years of credited service, provided the last 5 years of credited service is in any of the
qualified occupations.
Hybrid Plan General employees in the hybrid plan are required to contribute 6.0% of
their salary and are fully vested for benefits upon receiving 5 years of credited service.
The County may also make contributions for these members. Employees may retire with
full benefits at age 62 and 5 years of credited service or at age 55 and 30 years of
credited service, or may retire at age 55 and 20 years of credited service with reduced
benefits. The benefit multiplier used to calculate retirement benefits is 2.0%.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
Noncontributory Plan General employees in the noncontributory plan are fully vested
upon receiving 10 years of credited service. The County is required to make all
contributions for these members. Employees may retire with full benefits at age 62 and
10 years of credited service or age 55 and 30 years of credited service or age 55 and 20
years of credited service with reduced benefits. The benefit multiplier used to calculate
retirement benefits is 1.25%.
The ERS funding policy provides for periodic employer contributions at actuarially
determined rates, expressed as a percentage of annual covered payroll, such that the employer
contributions, along with employee contributions and an actuarially determined rate of
investment return, are adequate to accumulate sufficient assets to pay benefits when due. The
funding method used to calculate the total employer contribution required is the entry age
normal actuarial cost method. Effective July 1, 2005, employer contribution rates are a fixed
percentage of compensation, including the normal cost plus amounts required to pay for the
unfunded actuarial accrued liability. Employers contributed 22.00% for police officers and
fire fighters, and 15.50% for all other employees. Employer rates are set by statute based on
the recommendation of the ERS actuary resulting from an experience study conducted every
five years.
The required pension contributions by the County for the years ended June 30, 2013, 2012,
and 2011 were $23,559,710, $21,832,179, and $21,435,798, 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 CAFR that includes financial statements and required supplementary
information, which may be obtained by writing to the Employees' Retirement System of the
State of Hawaii, 201 Merchant Street, Suite 1400, Honolulu, Hawaii 96813.
Post -Retirement Benefits
In addition to providing pension benefits, the County is required by state statute (HRS
Chapter 87A) to contribute to the Hawaii Employer -Union Health Benefits Trust Fund (the
EUTF). The EUTF is an agent, multiple -employer defined benefit plan providing certain
healthcare and life insurance benefits to all qualified retirees, active employees, their
dependents and their beneficiaries. The EUTF was established on July 1, 2003 to design,
provide, and administer medical, prescription drug, dental, vision, chiropractic, dual -coverage
medical and prescription drug, and group life benefits.
For employees hired prior to July 1, 1996, the County pays the entire monthly healthcare
premium for employees retiring with 10 or more years of credited service, and 50% of the
monthly premium for employees retiring with fewer than 10 years of credited service. The
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
current (pay-as-you-go) premium costs are paid by the respective funds but the net other
postemployment benefit obligation is paid by the General Fund.
For employees hired after June 30, 1996, and who retire with fewer than 10 years of service,
the County makes no contributions. For those retiring with at least 10 years but fewer than 15
years of service, the County pays 50% of the retired employees' monthly Medicare or non -
Medicare premium. For employees hired after June 30, 1996, and who retire with at least 15
years but fewer than 25 years of service, the County pays 75% of the retired employees'
monthly Medicare or non -Medicare premium. For those retiring with over 25 years of
service, the County pays the entire healthcare premium.
For employees hired after June 30, 2001, and who retire with fewer than 10 years of service,
the County makes no contributions. For those retiring with at least 10 years but fewer than 15
years of service, the County pays 50% of the retired employees' monthly Medicare or non -
Medicare premium based on the self -plan. For employees hired after June 30, 2001, and who
retire with at least 15 years but fewer than 25 years of service, the County pays 75% of the
retired employees' monthly Medicare or non -Medicare premium; for those retiring with over
25 years of service, the County pays the entire healthcare premium.
For active employees, the employee's contributions are based upon negotiated collective
bargaining agreements. Employer contributions for employees not covered by collective
bargaining agreements and for retirees are prescribed by the HRS.
The County's annual other postemployment benefit (OPEB) cost is calculated based on the
annual required contribution (ARC) of the employer, which is an amount actuarially
determined in accordance with the parameters of Governmental Accounting Standards Board
Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment
Benefits Other than Pensions (GASB Statement No. 45). GASB Statement No. 45 addresses
the failure of previous financial reporting practices to measure and recognize the cost of
OPEB during the periods when employees render the services or to provide relevant
information about OPEB obligations and the extent to which progress is being made in
funding those obligations. The ARC represents a level of funding that, if paid on an ongoing
basis, is projected to cover normal cost each year and amortize any unfunded actuarial
liabilities (or funding excess) over a period not to exceed thirty (30) years. The current ARC
rate is 21.7% of annual covered payroll.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
The following section shows the County's Annual OPEB cost for the year ended June 30,
2013, the amount actually contributed to the plan, and changes in the net OPEB liability:
Annual required contribution
$29,494,000
Interest on net OPEB obligation
1,564,000
Adjustment to annual required contribution
(1,346,000)
Annual OPEB Cost
29,712,000
Contributions made
13,891,830
Increase in net OPEB liability
15,820,170
Net OPEB liability -beginning of year
22,340,332
Net OPEB liability -end of year
$38,160,502
The above net OPEB liability at the end of the year is included in the Statement of Net
Position in the noncurrent other liability amount of $38,160,502.
The annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the
net OPEB (asset) liability for the year ended June 30, 2013 and the preceding two years were
as follows:
61,907,000
Unfunded actuarial accrued liability (UAAL)
$332,726,000
Percentage of Annual
Net OPEB
Fiscal Year
OPEB Cost
Obligation/
Ended
Annual OPEB Cost Contributed
(Asset)
June 30, 2011
$34,913,000 89.1%
($120,768)
June 30, 2012
$36,191,000 37.9%
$22,340,332
June 30, 2013
$29,712,000 46.8%
$38,160,502
The schedule of funding progress based on the actuarial valuation date of July 1, 2011, is as
follows:
Actuarial accrued liability
$394,633,000
Actuarial value of plan assets
61,907,000
Unfunded actuarial accrued liability (UAAL)
$332,726,000
Funded ratio
16%
Covered payroll (active plan members)
$130,170,000
UAAL as a percentage of covered payroll
256%
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.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
The schedule of funding progress, presented as required supplementary information following
the notes to the financial statements, presents multiyear trend information that shows whether
the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial
accrued liabilities for benefits.
Projections of benefits for financial reporting purposes are based on the substantive plan (the
plan as understood by the employer and plan members) and include the types of benefits
provided at the time of each valuation and the historical pattern of sharing of benefit costs
between the employer and plan members to that point. The actuarial methods and
assumptions used include techniques that are designed to reduce short-term volatility in
actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term
perspective of the calculations.
In the July 1, 2011 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 8.0% 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 UAAL is being amortized
as a level percentage of projected payroll on an open basis. The remaining amortization
period at July 1, 2011 for the UAAL balance varies depending on the date each portion was
established but is set to not exceed 30 years.
The EUTF issues a publicly available financial report that includes financial statements and
required supplementary information, which is available on-line at their web -site
www.eutf.hawaii.gov or by contacting them at P.O. Box 2121, Honolulu, HI 96805-2121.
Deferred Compensation Plan
County employees are permitted to participate in a deferred compensation plan of the State of
Hawaii, adopted pursuant to Internal Revenue Code (IRC) section 457. The plan permits
eligible employees to defer a portion of their salary until future years by contributing to a
fund managed by a plan administrator. The deferred compensation amounts are not available
to employees until termination, retirement, death, or unforeseeable emergency.
All plan assets are held in a trust fund to protect them from claims of general creditors and
from diversion to any uses other than paying benefits to participants and beneficiaries. The
County has no responsibility for loss due to the investment or failure of investment of funds
and assets in the plans, but does have the duty of due care that would be required of an
ordinary prudent investor. Therefore, the deferred compensation plan assets are not reported
in the accompanying basic financial statements.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
14. COMPONENT UNIT DISCLOSURES
Deposits and Investments
At June 30, 2013, cash, time certificates of deposit and money market funds of $32,004,491,
with bank balances of $32,438,987 were held by the County on behalf of the Department.
These balances were fully insured or collateralized with securities held by the County's agent
in the County's name.
The deposits and investments include cash received by the Department that is restricted as to
use and is recorded as a restricted asset. Such funds amounted to $2,574,396 at June 30,
2013. At June 30, 2013, the Department had no investments.
Capital Assets
The Department began operations as of January 1, 1950. At that date, the utility plant in
service was transferred to the Department from the County at the cost of the utility plant
assets acquired by the County for its water system from January 1, 1924 to
December 31, 1949, less accumulated depreciation. Acquisitions prior to 1924 and
acquisitions by gift or grant prior to 1950 are not included in utility plant. Additions to utility
plant since January 1, 1950 are stated at original cost and include contributions by
governmental agencies, private subdividers and customers at their cost or estimated cost.
Construction costs include amounts for contract work, engineering supervision and other
direct and indirect costs. Construction period interest is capitalized on utility plan constructed
with tax-exempt debt.
Depreciation on the Department's utility plant assets in service is computed using the
straight-line method over the estimated useful lives of the assets as follows:
Structures and improvements 40 to 50 years
Machinery and equipment 5 to 20 years
Water systems 10 to 40 years
The capital assets of the Department at June 30, 2013 were as follows:
Utility plant in service $442,248,055
Less: accumulated depreciation (187,096,040)
255,152,015
Land and rights 4,528,502
Construction work in progress 11,708,146
Net capital assets $271,388,663
-88-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
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 $40,768,718 at
June 30, 2013.
General obligation bonds payable issued on behalf of the Department and other long-term
debt at June 30, 2013 are comprised of the following:
Public improvement bonds:
2004 Series D at 4.5%, due through 2039
2006 Series A at 4.0% to 5.0%, due through 2026
2008 Series A at 4.125%, due through 2043
2010 Series A at 3.33% to 6.1%, due through 2030
2010 Series B at 3.33% to 6.1%, due through 2030
Total public improvement bonds
Public improvement refunding bonds:
2004 Series at 2.0% to 5.25%, due through 2015
2007 Series at 4.0% to 5.0%, due through 2021
Total public improvement refunding bonds
Revolving fund loans:
State revolving fund loans, interest up to 1.37%,
due through 2030
Total long-term debt
Add: Unamortized premium
Total
-89-
$ 232,191
19,825,000
140,217
8,831,250
6,168,750
35,197,408
95,836
4,886.590
4,982,426
12,911.310
53,091,144
588,884
53.680.028
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2013
At June 30, 2013, future principal payments for long-term debt are scheduled as follows:
Fiscal year ending June 30:
2014
$ 2,556,000
2015
3,287,000
2016
3,348,000
2017
3,456,000
2018
3,576,000
2019-2023
18,474,000
2024
—2028
14,872,000
2029
—2033
3,367,000
2034
—2038
90,000
2039
—2043
65.144
Total 53.091.144
Contributions in Aid of Construction
The Department recognized $15,226,253 of contributions in aid of construction for the fiscal
year ended June 30, 2013.
Commitments and Contingent Liabilities
Claims and judgments — The Department maintains property, auto liability, and general
liability insurance policies. The Department remains self-insured for workers' compensation
and other perils. The liability at June 30, 2013 for workers' compensation claims of
$229,000 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 $15,708,000 at
June 30, 2013.
Post -Retirement Benefits
Effective July 1, 2007, the Department adopted the provisions of GASB Statement No. 45.
This statement addresses how state and local governments should account for and report their
costs and obligations related to postemployment benefits, healthcare, and other nonpension
benefits. The Department's annual required contribution for its postemployment benefit
obligation for the year ended June 30, 2013 was $1,834,000. The Department made
contributions of $1,834,000 during the year ended June 30, 2013 and recorded a
postemployment benefit asset of $3,000 at June 30, 2013.
COUNTY OF HAWAII
Required Supplementary Information
June 30, 2013
Schedule of Funding Progress for the EUTF
(In thousands)
Actuarial
1, 2007
- $275,828
Accrued
July
UAAL as a
Actuarial Liability
Unfunded
Percentage
Actuarial Value of (AAL) —
AAL Funded
Covered of Covered
Valuation Assets Entry Age
(UAAL) Ratio
Payroll Payroll
Date (a) (b)
(b -a) (alb)
(C) ((b-a)/c)
July
1, 2007
- $275,828
$275,828 -
July
1, 2009
$28,814 $439,225
$410,411 6.6%
July
1, 2011
$61,907 $394,633
$332,726 15.7%
-91-
$127,420 216.5%
$133,555 307.3%
$130,170 255.6%
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NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
HIGHWAY FUND - Used to account for the costs of maintaining the County's highways and streets.
Financing is provided primarily by fuel, motor vehicle weight and public utility franchise taxes.
SEWER FUND - Used to account for costs of operating the County's various sewer systems. Financing is
provided by charges to users for sewer services.
SOLID WASTE FUND — Used to accumulate moneys for the operation, maintenance, and administration of
the County's solid waste management, collection and disposal systems. Financing is provided by tipping
fees at the landfills and by disposal permit fees.
CEMETERYFUND - Used to accumulate moneys to guarantee the future maintenance of County cemetery
sites. Financing is provided from the sale of burial lots in County cemeteries.
PARKING METER FUND - Used to account for the costs of maintaining County on -street and off-street
parking areas. Financing is provided by the proceeds from parking meters.
VEHICLE DISPOSAL FUND - Used to accumulate moneys for the towing, removal, disposal and
recycling of abandoned or discarded automobiles and automobile parts. Financing is provided by annual
fees collected with motor vehicle registrations.
BIKEWAYFUND - Used to accumulate moneys for the construction of bikeways within the County.
Financing is provided by bicycle license fees.
WORKFORCE INVESTMENT ACT FUND - Used to account for employment and training services
provided to economically disadvantaged adults, dislocated workers and youth. Financing is provided by
federal grants.
GOLF COURSE FUND - Used to account for the cost of operating the Hilo Municipal Golf Course.
Funding is provided from green fees and payments from restaurant and pro shop concessionaires.
GEOTHERMAL RELOCATION AND COMMUNITY BENEFITS FUND - Used to account for the County's
share of geothermal resource royalties received from the operator of a geothermal power plant located in
the County. The funds are earmarked for a geothermal relocation program and to benefit the lower Puna
area.
BEA UTIFICATION FUND - Used to accumulate moneys for the beautification of highways and disposal
of abandoned vehicles within the County. Financing is provided by assessments on vehicle registrations.
HAWAII COUNTYHOUSING AGENCY- Used to account for Federal and County moneys used to provide
public housing assistance within the County.
PARK DEDICATION FUND - Used to account for moneys deposited with the County by subdividers to
provide land for parks and playgrounds in subdivisions.
DEBT SERVICE FUND
INTEREST FUND - Used to accumulate moneys for payment of interest on general obligation bonds.
Moneys required to service interest maturities are transferred annually from the General Fund.
BOND REDEMPTION FUND - Used to accumulate moneys for the payment of general obligation bonds.
Moneys required to retire the bonds are transferred from the General Fund one year in advance of maturity.
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COUNTY OF HAWAII
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2013
Assets
Cash and cash equivalents
Investments
Imprest fund
Receivables:
Due from other governments
Due from other governmental funds
Due from other nongovernmental funds
Trade, net of allowance for doubtful accounts
Other
Total assets
Liabilities and Fund Balances
Liabilities:
Accounts payable
Accrued payroll
Due to other governmental funds
Deferred revenue
Other
Total liabilities
Fund balances:
Restricted for:
Debt service
Highways, streets and abandoned vehicles
Rental assistance and subsidy
Committed to:
Sanitation
Highways, streets and abandoned vehicles
Rental assistance and subsidy
Cemetery
Golf course
Lower Puna area
Parks and recreational projects
Total fund balances
Total liabilities and fund balances
Special Revenue Funds
Solid Parking
Highway Sewer Waste Cemetery Meter
Fund Fund Fund Fund Fund
$ 14,771,554 $ 3,961,888 $ 8,228,955 $ 97,909 $ 203,787
400 250 - -
119,153 - 1,457,205 - -
44,762 10,764 131,299 - -
- 1,350 - - -
1,351,064 1,423,058 - -
- - 235,626 - -
163,915 1,363,178 3,247,188 - -
$ 14,935,469 $ 5,325,466 $ 11,476,393 $ 97,909 $ 203,787
$ 1,296,911 $ 247,592 $ 1,219,441 $ - $ -
415,794 148,796 294,618 - -
301,084 4,984 23,485 - -
- 1,351,064 1,435,056 - -
1,903 51,812 3,279 - -
2,015,692 1,804,248 2,975,879 - -
12,919,777 - - - -
3,521,218 8,500,514 - -
- - - 203,787
97,909 -
12,919,777 3,521,218 8,500,514 97,909 203,787
$ 14,935,469 $ 5,325,466 $ 11,476,393 $ 97,909 $ 203,787
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Special Revenue Funds
Vehicle Workforce Golf Geothermal Reloc. Beauti- Hawaii County Park
Disposal Bikeway Investment Course & Community fication Housing Dedication
Fund Fund Act Fund Fund Benefits Fund Fund Agency Fund
$2,525,642 $ 704,983 $ - $ 339,336 $ 3,955,138 $ 1,241,372 $ 1,741,439 $ 16,376
- - - - - 3,400,000 68,433
2,000 - - 200 -
- - 139,013 - - - - -
1,887 - - - - - 52,577 -
- - 38,993 3,094 221,533 - 98,197 -
1,887 - 178,006 3,094 221,533 - 150,774 -
$2,527,529 $ 704,983 $ 178,006 $ 344,430 $ 4,176,671 $ 1,241,372 $ 5,292,413 $ 84,809
$ 25,876 $ 13,903 $ - $ 1,971 $ - $ 13,788 $ 104,564 $ -
8,663 - - 35,785 - - 112,232 -
- - 178,006 2,492 - - - -
- - - - 93,174 -
- 96,209 -
34,539 13,903 178,006 40,248 - 13,788 406,179 -
691,080 - - - 1,227,584 - -
- - - - - 2,848,612 -
2,492,990 - - - - - - -
- - - - - - 2,037,622 -
304,182 - - - -
- 4,176,671 - - -
- - - - 84,809
2,492,990 691,080 - 304,182 4,176,671 1,227,584 4,886,234 84,809
$2,527,529 $ 704,983 $ 178,006 $ 344,430 $ 4,176,671 $ 1,241,372 $ 5,292,413 $ 84,809
(Continued)
-95-
COUNTY OF HAWAII
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2013
(Concluded)
See accompanying independent auditors' report.
-96-
Debt Service Fund
Total
Bond
Nonmajor
Interest
Redemption
Governmental
Fund
Fund
Funds
Assets
Cash and cash equivalents
$ 158,894
$ -
$
37,947,273
Investments
2,306,911
16,952,747
22,728,091
Imprest fund
-
-
2,850
Receivables:
Due from other governments
-
-
1,715,371
Due from other governmental funds
-
-
241,289
Due from other nongovernmental funds
-
-
1,350
Trade, net of allowance for doubtful accounts
-
-
2,774,122
Other
-
-
597,443
-
-
5,329,575
Total assets
$ 2,465,805
$ 16,952,747
$
66,007,789
Liabilities and Fund Balances
Liabilities:
Accounts payable
$ -
$ -
$
2,924,046
Accrued payroll
-
-
1,015,888
Due to other governmental funds
-
-
510,051
Deferred revenue
-
-
2,879,294
Other
71,930
220,000
445,133
Total liabilities
71,930
220,000
7,774,412
Fund balances:
Restricted for:
Debt service
2,393,875
16,732,747
19,126,622
Highways, streets and abandoned vehicles
-
-
14,838,441
Rental assistance and subsidy
-
-
2,848,612
Committed to:
Sanitation
-
-
12,021,732
Highways, streets and abandoned vehicles
-
-
2,696,777
Rental assistance and subsidy
-
-
2,037,622
Cemetery
-
-
97,909
Golf course
-
-
304,182
Lower Puna area
-
-
4,176,671
Parks and recreational projects
-
-
84,809
Total fund balances
2,393,875
16,732,747
58,233,377
Total liabilities and fund balances
$ 2,465,805
$ 16,952,747
$
66,007,789
See accompanying independent auditors' report.
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COUNTY OF HAWAII
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Fiscal Year Ended June 30, 2013
Revenues
Fuel taxes
Public utility franchise taxes
Licenses and permits
Intergovernmental
Charges for services
Investment earnings (loss)
Other
Total revenues
Expenditures
Current:
General Government
Public safety
Highways and streets
Health, education and welfare
Culture and recreation
Sanitation
Pension and retirement contributions
Employees' health insurance
Other
Debt service:
Principal
Interest
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Other Financing Sources (Uses)
Premium on bonds
Refunding bonds
Refunding bonds issuance costs
Retirement of refunded debt
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances
Fund balances at beginning of year
Fund balances at end of year
Special Revenue Funds
Solid Parking
Highway Sewer Waste Cemetery Meter
Fund Fund Fund Fund Fund
$ 6,352,944 $ - $ - $ -
11,087,369 - - -
7,247,674 - - -
574,037 - 1,067,520 -
- 6,904,712 6,520,495 -
393,843 39,189 24,788 6,250
25,655,867 6,943,901 7,612,803 6,250
16,991
16,991
5,922,594
-
- - -
15,042,939
-
- - -
-
6,501,040
21,202,184 - -
1,713,563
604,971
1,132,511 - -
946,581
255,873
614,350 - -
407,397
132,802
276,216 - -
-
-
1,055,883 - -
-
-
51,558 - -
24,033,074
7,494,686
24,332,702 - -
1,622,793 (550,785) (16,719,899) 6,250 16,991
15,736,944 -
(3,460,483) - - -
(3,460,483) - 15,736,944 -
(1,837,690) (550,785) (982,955) 6,250
14,757,467 4,072,003 9,483,469 91,659
$ 12,919,777 $ 3,521,218 $ 8,500,514 $ 97,909
-98-
16,991
186,796
$ 203,787
24,890 - - -
36,403 - - - 87,749 - -
- 1,611,249 - - - 15,293,647 -
- - - 798,251 8,246 56,300 - -
2,098,169 - - - - - - -
21,104 - - 139,591 - - 467,730 -
15,199 - - 79,418 - - 190,443 -
- - - 3,072 - - - -
8,390 -
- - - - - - 1,501 -
2,134,472 36,403 1,611,249 1,020,332 33,136 144,049 15,961,711 -
(42,500) 47,877 - (189,254) 728,388 30,282 (1,195,093) (1,976)
- - - 299,000 - - 838,384 -
- - 299,000 - - 838,384 -
(42,500) 47,877 - 109,746 728,388 30,282 (356,709) (1,976)
2,535,490 643,203 - 194,436 3,448,283 1,197,302 5,242,943 86,785
$ 2,492,990 $ 691,080 $ - $ 304,182 $ 4,176,671 $ 1,227,584 $ 4,886,234 $ 84,809
(Continued)
-99-
Special Revenue Funds
Vehicle
Workforce
Golf
Geothermal Reloe.
Beauti-
Hawaii County
Park
Disposal
Bikeway
Investment
Course
& Community
fication
Housing
Dedication
Fund
Fund
Act Fund
Fund
Benefits Fund
Fund
Agency
Fund
2,091,972
84,280
-
-
-
174,331
-
-
-
-
1,611,249
-
-
-
14,638,166
-
-
-
-
831,038
-
-
-
-
-
-
-
-
-
-
4,329
(1,976)
-
-
-
40
761,524
-
124,123
-
2,091,972
84,280
1,611,249
831,078
761,524
174,331
14,766,618
(1,976)
24,890 - - -
36,403 - - - 87,749 - -
- 1,611,249 - - - 15,293,647 -
- - - 798,251 8,246 56,300 - -
2,098,169 - - - - - - -
21,104 - - 139,591 - - 467,730 -
15,199 - - 79,418 - - 190,443 -
- - - 3,072 - - - -
8,390 -
- - - - - - 1,501 -
2,134,472 36,403 1,611,249 1,020,332 33,136 144,049 15,961,711 -
(42,500) 47,877 - (189,254) 728,388 30,282 (1,195,093) (1,976)
- - - 299,000 - - 838,384 -
- - 299,000 - - 838,384 -
(42,500) 47,877 - 109,746 728,388 30,282 (356,709) (1,976)
2,535,490 643,203 - 194,436 3,448,283 1,197,302 5,242,943 86,785
$ 2,492,990 $ 691,080 $ - $ 304,182 $ 4,176,671 $ 1,227,584 $ 4,886,234 $ 84,809
(Continued)
-99-
COUNTY OF HAWAII
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Fiscal Year Ended June 30, 2013
(Concluded)
Debt Service Fund
Total
Bond
Nonmajor
Interest
Redemption
Governmental
Fund
Fund
Funds
Revenues
Fuel taxes
$ -
$ -
$ 6,352,944
Public utility franchise taxes
-
-
11,087,369
Licenses and permits
-
-
9,598,257
Intergovernmental
442,719
-
18,333,691
Charges for services
-
-
14,273,236
Investment earnings (loss)
-
-
2,353
Other
-
-
1,349,757
Total revenues
442,719
-
60,997,607
Expenditures
Current:
General Government
-
-
24,890
Public safety
-
-
5,922,594
Highways and streets
-
-
15,167,091
Health, education and welfare
-
-
16,904,896
Culture and recreation
-
-
862,797
Sanitation
-
-
29,801,393
Pension and retirement contributions
-
-
4,079,470
Employees' health insurance
-
-
2,101,864
Other
-
-
819,487
Debt service:
Principal
-
24,239,719
25,303,992
Interest
14,250,927
-
14,303,986
Total expenditures
14,250,927
24,239,719
115,292,460
Excess (deficiency) of revenues
over (under) expenditures
(13,808,208)
(24,239,719)
(54,294,853)
Other Financing Sources (Uses)
Premium on bonds
-
1,650,192
1,650,192
Refunding bonds
-
8,029,843
8,029,843
Refunding bonds issuance costs
-
(44,731)
(44,731)
Retirement of refunded debt
-
(9,635,304)
(9,635,304)
Transfers in
14,063,323
16,958,317
47,895,968
Transfers out
-
-
(3,460,483)
Total other financing sources (uses)
14,063,323
16,958,317
44,435,485
Net change in fund balances
255,115
(7,281,402)
(9,859,368)
Fund balances at beginning of year
2,138,760
24,014,149
68,092,745
Fund balances at end of year
$ 2,393,875
$ 16,732,747
$ 58,233,377
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 30, 2013
Revenues:
Taxes:
Fuel taxes
Public utility franchise taxes
Total taxes
Licenses and permits - motor vehicle weight taxes
Intergovernmental
Charges for services
Other
Total revenues
Expenditures:
Public safety - traffic engineering
Highways and streets
Highways and streets - mass transit
Pension and retirement contributions
Employees' health insurance
Other
Total expenditures
Excess (deficiency) of revenues over (under)
expenditures
Other financing uses:
Transfers out - Capital Projects Fund
Deficiency of revenues under
expenditures and other uses
Fund balance at beginning of year
Fund balance at end of year
See accompanying independent auditors' report.
Original Final
Budget Budget
Actual
Variance
(Budgetary
Positive
Basis)
(Negative)
$ 7,660,000
$ 7,660,000
$ 6,352,944
$ (1,307,056)
10,560,000
10,560,000
11,087,369
527,369
18,220,000
18,220,000
17,440,313
(779,687)
7,090,000
7,090,000
7,247,674
157,674
528,564
578,564
619,884
41,320
500,000
500,000
301,371
(198,629)
71,732
71,732
92,472
20,740
26,410,296
26,460,296
25,701,714
(758,582)
6,624,102
6,659,102
6,240,096
419,006
13,697,698
13,712,698
11,101,066
2,611,632
4,845,250
4,845,250
4,845,250
-
2,016,000
2,016,000
1,712,503
303,497
980,000
980,000
949,483
30,517
1,000,000
1,000,000
(121,137)
1,121,137
29,163,050
29,213,050
24,727,261
4,485,789
(2,752,754) (2,752,754) 974,453
(3,610,000) (3,610,000) (3,460,483)
3,727,207
1 19 517
(6,362,754) (6,362,754) (2,486,030) 3,876,724
14,757,467 14,757,467 14,757,467 -
$ 8,394,713 $ 8,394,713 $ 12,271,437 $ 3,876,724
- 101 -
COUNTY OF HAWAII
Sewer Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2013
See accompanying independent auditors' report.
-102-
Actual
Variance
Original
Final
(Budgetary
Positive
Budget
Budget
Basis)
(Negative)
Revenues:
Charges for services - sewer fees
$ 6,966,219
$ 6,966,219
$ 6,904,712
$ (61,507)
Other
-
-
39,189
39,189
Total revenues
6,966,219
6,966,219
6,943,901
(22,318)
Expenditures:
Sanitation
7,107,239
7,107,239
6,618,533
488,706
Pension and retirement contributions
671,471
671,471
603,946
67,525
Employees' health insurance
340,610
340,610
256,735
83,875
Other
1,201,829
1,201,829
34,841
1,166,988
Total expenditures
9,321,149
9,321,149
7,514,055
1,807,094
Deficiency of revenues under expenditures
(2,354,930)
(2,354,930)
(570,154)
1,784,776
Fund balance at beginning of year
4,072,003
4,072,003
4,072,003
-
Fund balance at end of year
$ 1,717,073
$ 1,717,073
$ 3,501,849
$ 1,784,776
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 30, 2013
Revenues:
Intergovernmental
Charges for services - tipping fees
Other
Total revenues
Expenditures:
Sanitation
Pension and retirement contributions
Employees' health insurance
Other
Total expenditures
Deficiency of revenues under expenditures
Other financing sources:
Transfers in - General Fund
Deficiency of revenues and other
sources under expenditures
Fund balance at beginning of year
Fund balance at end of year
See accompanying independent auditors' report
15,736,944 15,736,944 15,736,944 -
(2,222,117) (2,222,117) (516,851) 1,705,266
9,483,469 9,483,469 9,483,469 -
$ 7,261,352 $ 7,261,352 $ 8,966,618 $ 1,705,266
-103-
Actual
Variance
Original
Final
(Budgetary
Positive
Budget
Budget
Basis)
(Negative)
$ 1,049,200
$ 1,049,200
$ 1,014,219
$ (34,981)
6,392,400
6,392,400
6,520,495
128,095
-
-
24,788
24,788
7,441,600
7,441,600
7,559,502
117,902
23,130,400
23,092,402
21,797,773
1,294,629
1,090,261
1,140,261
1,130,548
9,713
625,000
625,000
614,768
10,232
555,000
542,998
270,208
272,790
25,400,661
25,400, 661
23,813,297
1,587,3 64
(17,959,061)
(17,959,061)
(16,253,795)
1,705,266
15,736,944 15,736,944 15,736,944 -
(2,222,117) (2,222,117) (516,851) 1,705,266
9,483,469 9,483,469 9,483,469 -
$ 7,261,352 $ 7,261,352 $ 8,966,618 $ 1,705,266
-103-
COUNTY OF HAWAII
Cemetery Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2013
Revenues - other - sale of cemetery plots
Expenditures - health, education and welfare
Excess of revenues over expenditures
Fund balance at beginning of year
Fund balance at end of year
See accompanying independent auditors' report.
-104-
Actual
Variance
Original
Final
(Budgetary
Positive
Budget
Budget
Basis)
(Negative)
$ 10,000
$ 10,000
$ 6,250
$ (3,750)
10,000
10,000
-
10,000
-
-
6,250
6,250
91,659
91,659
91,659
-
$ 91,659
$ 91,659
$ 97,909
$ 6,250
-104-
COUNTY OF HAWAII
Parking Meter Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2013
Revenues - Charges for services - highways and streets
Excess of revenues over expenditures
Fund balance at beginning of year
Fund balance at end of year
See accompanying independent auditors' report.
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
$ - $ - $ 16,991 $ 16,991
16,991 16,991
186,796 186,796 186,796 -
$ 186,796 $ 186,796 $ 203,787 $ 16,991
-105-
COUNTY OF HAWAII
Vehicle Disposal Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2013
See accompanying independent auditors' report.
-106-
Actual
Variance
Original
Final
(Budgetary
Positive
Budget
Budget
Basis)
(Negative)
Revenues:
Licenses and permits - vehicle disposal fee
$ 2,030,364
$ 2,030,364
$ 2,091,972
$ 61,608
Expenditures:
Sanitation
2,551,567
2,548,567
1,034,301
1,514,266
Pension and retirement contributions
21,805
21,805
20,722
1,083
Employees' health insurance
12,000
15,000
14,954
46
Other
2,000
2,000
-
2,000
Total expenditures
2,587,372
2,587,372
1,069,977
1,517,395
Excess (deficiency) of revenues
over (under) expenditures
(557,008)
(557,008)
1,021,995
1,579,003
Fund balance at beginning of year
2,535,490
2,535,490
2,535,490
-
Fund balance at end of year
$ 1,978,482
$ 1,978,482
$ 3,557,485
$ 1,579,003
See accompanying independent auditors' report.
-106-
COUNTY OF HAWAII
Bikeway Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2013
Revenues - licenses and permits - bicycle tax
Expenditures - highways and streets
Excess (deficiency) of revenues over (under)
expenditures
Fund balance at beginning of year
Fund balance at end of year
See accompanying independent auditors' report.
Original
Actual
Variance
and Final
(Budgetary
Positive
Budget
Basis)
(Negative)
$ 20,000
$ 84,280
$ 64,280
171,000
25,000
146,000
(151,000)
59,280
210,280
643,203
643,203
-
$492,203
$702,483
$210,280
-107-
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, 2013
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues - intergovernmental - federal grants $ - $ 1,521,232 $ 1,521,232 $ -
Expenditures - health, education and welfare - 1,521,232 1,521,232 -
Excess of revenues over expenditures - - - -
Fund balance at beginning of year - - - -
Fund balance at end of year $ - $ - $ - $ -
See accompanying independent auditors' report.
-108-
COUNTY OF HAWAII
Golf Course Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2013
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
Charges for services $ 840,672 $ 840,672 $ 831,038 $ (9,634)
Other - - 40 40
Total revenues 840,672 840,672 831,078 (9,594)
Expenditures:
Culture and recreation
865,653
865,653
789,497
76,156
Pension and retirement contributions
160,709
160,709
139,296
21,413
Employees' health insurance
99,709
99,709
79,517
20,192
Other
13,601
13,601
3,243
10,358
Total expenditures
1,139,672
1,139,672
1,011,553
128,119
Deficiency of revenues under expenditures
(299,000)
(299,000)
(180,475)
118,525
Other financing sources:
Transfers in - General Fund
299,000
299,000
299,000
-
Excess of revenues and other sources
over expenditures
-
-
118,525
118,525
Fund balance at beginning of year
194,436
194,436
194,436
-
Fund balance at end of year
$ 194,436
$ 194,436
$ 312,961
$ 118,525
See accompanying independent auditors' report.
-109-
COUNTY OF HAWAII
Geothermal Relocation and Community Benefits Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2013
See accompanying independent auditors' report.
-110-
Actual
Variance
Original
Final
(Budgetary
Positive
Budget
Budget
Basis)
(Negative)
Revenues - other - geothermal royalties
$ 600,000
$ 600,000
$ 761,524
$ 161,524
Expenditures:
General government:
Legislative
24,890
24,890
24,890
-
Planning and zoning
351,230
1,051,230
-
1,051,230
Public safety - traffic
80,000
80,000
-
80,000
Highways and streets - mass transit
17,000
17,000
-
17,000
Culture and recreation - parks and recreation
126,880
126,880
13,773
113,107
Total expenditures
600,000
1,300,000
38,663
1,261,337
Excess (deficiency) of revenues
over (under) expenditures
-
(700,000)
722,861
1,422,861
Fund balance at beginning of year
3,448,283
3,448,283
3,448,283
-
Fund balance at end of year
$ 3,448,283
$ 2,748,283
$ 4,171,144
$ 1,422,861
See accompanying independent auditors' report.
-110-
COUNTY OF HAWAII
Beautification Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2013
See accompanying independent auditors' report
-111-
Actual
Variance
Original
Final
(Budgetary
Positive
Budget
Budget
Basis)
(Negative)
Revenues - licenses and permits - highway
beautification
$ 157,920
$ 157,920
$ 174,331
$ 16,411
Expenditures:
Highways and streets
96,620
168,620
129,909
38,711
Culture and recreation
61,300
86,300
63,587
22,713
Total expenditures
157,920
254,920
193,496
61,424
Deficiency of revenues under expenditures
-
(97,000)
(19,165)
77,835
Fund balance at beginning of year
1,197,302
1,197,302
1,197,302
-
Fund balance at end of year
$ 1,197,302
$ 1,100,302
$ 1,178,137
$ 77,835
See accompanying independent auditors' report
-111-
COUNTY OF HAWAII
Hawaii County Housing Agency
Schedule of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2013
Revenues:
Intergovernmental -
Federal - HUD - Voucher program
Other
Investment earnings
Resale of property
Other
Total revenues
Expenditures:
Health, education and welfare
Pension and retirement contributions
Employees' health insurance
Total expenditures
Deficiency of revenues under expenditures
Other financing sources:
Transfers in - General Fund
Deficiency of revenues and other
sources under expenditures
Fund balance at beginning of year
Fund balance at end of year
See accompanying independent auditors' report.
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
$ 15,659,252 $
15,659,252
$ 14,613,640
$ (1,045,612)
29,122
29,122
24,526
(4,596)
6,000
6,000
4,329
(1,671)
-
-
124,027
124,027
-
-
96
96
15,694,374
15,694,374
14,766,618
(927,756)
16,209,060
16,209,060
15,310,585
898,475
530,834
530,834
469,133
61,701
225,182
225,182
191,646
33,536
16,965,076
16,965,076
15,971,364
993,712
(1,270,702)
(1,270,702)
(1,204,746)
65,956
838,384
838,384
838,384
-
(432,318)
(432,318)
(366,362)
65,956
5,242,943
5,242,943
5,242,943
-
$ 4,810,625 $
4,810,625
$ 4,876,581
$ 65,956
-112-
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, 2013
Revenues - investment earnings
Excess of revenues over expenditures
Fund balance at beginning of year
Fund balance at end of year
See accompanying independent auditors' report.
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
$ - $ - $ 18 $ 18
18 18
86,785 86,785 86,785 -
$ 86,785 $ 86,785 $ 86,803 $ 18
-113-
Assets
Cash and cash equivalents
Investments
Due from other agency funds
Other receivables
Total assets
Liabilities
Due to other agency funds
Accrued liabilities
Advances payable
Assets held for the benefit of
COUNTY OF HAWAII
Agency Funds
Combining Statement of Agency Funds Net Position
June 30, 2013
State
Improvement
Improvement
Weight
District
District
Tax
No. 18
Revolving
Fund
Fund
Fund
Performance
and
Refundable Payroll Flexible
Deposits Clearance Spending
Fund Fund Account
$1,682,830 $ 183,262 $ 37,894 $ 229,483 $ 341,667 $ 381,933
- 189,525 - - -
8,269 - - 33,425 -
$1,682,830 $ 191,531 $ 227,419 $ 229,483 $ 375,092 $ 381,933
$ - $ - $ - $ 1,670 $ 872 $ -
1,682,830 10,687 - - 374,220 381,933
- 11,911 - 227,813 - -
improvement districts - 168,933 227,419 - - -
Total liabilities $1,682,830 $ 191,531 $ 227,419 $ 229,483 $ 375,092 $ 381,933
See accompanying independent auditors' report.
-114-
Non -Profit
Organ and
Business
Lapsed License
Tissue
Improvement
Warrants Plates
Education
District
Fund Fund
Fund
1 - Kailua Total
$ 234,640 $ 1,250 $ 954 $ 184 $ 3,094,097
- - - - 189,525
2,542 - - - 2,542
10,065 - - 20,741 72,500
$ 247,247 $ 1,250 $ 954 $ 20,925 $ 3,358,664
$ - $ - $ - $ - $ 2,542
247,247 1,250 954 183 21699,304
- - - - 239,724
- - - 20,742 417,094
$ 247,247 $ 1,250 $ 954 $ 20,925 $ 3,358,664
- 115-
COUNTY OF HAWAII
Agency Funds
Combining Statement of Changes in Assets and Liabilities
For the Fiscal Year Ended June 30, 2013
State Weight Tax Fund
Assets
Cash and cash equivalents
Liabilities
Vouchers payable
Accrued liabilities
Accrued liabilities - due to State of Hawaii
Total liabilities
Improvement District No. 18 Fund
Assets
Cash and cash equivalents
Investments
Other receivables
Total assets
Liabilities
Vouchers Payable
Accrued liabilities
Advances payable
Assets held for the benefit
of improvement districts
Total liabilities
Improvement District Revolving Fund
Assets
Cash and cash equivalents
Investments
Total assets
Liabilities
Vouchers payable
Assets held for the benefit
of improvement districts
Total liabilities
Balance Balance
July 1, June 30,
2012 Additions Deductions 2013
$ 1,755,546 $ 23,412,342 $ 23,485,058 $ 1,682,830
$ - $ 23,475,406 $ 23,475,406 $ -
1 - 1 -
1,755,545 21,504,223 21,576,938 1,682,830
$ 1,755,546 $ 44,979,629 $ 45,052,345 $ 1,682,830
$ 17,532 $ 315,224 $ 149,494 $ 183,262
1,458,449 - 1,458,449 -
8,146 343,770 343,647 8,269
$ 1,484,127 $ 658,994 $ 1,951,590 $ 191,531
$ - $ 1,392,773 $ 1,392,773 $ -
10,907 296,251 296,471 10,687
14,183 11,911 14,183 11,911
1,459,037 279,470 1,569,574 168,933
$ 1,484,127 $ 1,980,405 $ 3,273,001 $ 191,531
$ 286,569 $ 57 $ 248,732 $ 37,894
- 189,525 - 189,525
$ 286,569 $ 189,582 $ 248,732 $ 227,419
$ - $ 53,684 $ 53,684 $ -
286,569 157,466 216,616 227,419
$ 286,569 $ 211,150 $ 270,300 $ 227,419
- 116 -
COUNTY OF HAWAII
Agency Funds
Combining Statement of Changes in Assets and Liabilities
For the Fiscal Year Ended June 30, 2013
Liabilities
Vouchers payable $ - $ 104,907,344 $ 104,907,344 $ -
Due to other agency funds 326 872 326 872
Accrued liabilities 323,018 382,454,965 382,403,763 374,220
Total liabilities $ 323,344 $ 487,363,181 $ 487,311,433 $ 375,092
Flexible Spending Account
Assets
Cash and cash equivalents $ 365,481 $ 324,846 $ 308,394 $ 381,933
Liabilities
Accrued liabilities $ 365,481 $ 324,846 $ 308,394 $ 381,933
-117-
Balance
Balance
July 1,
June 30,
2012
Additions
Deductions
2013
Performance and Refundable
Deposits Fund
Assets
Cash and cash equivalents
$
522,542
$ 326,855
$ 619,914
$
229,483
Liabilities
Vouchers payable
$
-
$ 615,145
$ 615,145
$
-
Due to other agency funds
1,920
1,670
1,920
1,670
Advances payable
520,622
325,185
617,994
227,813
Total liabilities
$
522,542
$ 942,000
$ 1,235,059
$
229,483
Payroll Clearance Fund
Assets
Cash and cash equivalents
$
323,344
$ 212,058,388
$ 212,040,065
$
341,667
Due from other non -agency funds
-
208,885,478
208,885,478
-
Other receivables
-
41,479
8,054
33,425
Total assets
$
323,344
$ 420,985,345
$ 420,933,597
$
375,092
Liabilities
Vouchers payable $ - $ 104,907,344 $ 104,907,344 $ -
Due to other agency funds 326 872 326 872
Accrued liabilities 323,018 382,454,965 382,403,763 374,220
Total liabilities $ 323,344 $ 487,363,181 $ 487,311,433 $ 375,092
Flexible Spending Account
Assets
Cash and cash equivalents $ 365,481 $ 324,846 $ 308,394 $ 381,933
Liabilities
Accrued liabilities $ 365,481 $ 324,846 $ 308,394 $ 381,933
-117-
COUNTY OF HAWAII
Agency Funds
Combining Statement of Changes in Assets and Liabilities
For the Fiscal Year Ended June 30, 2013
Lapsed Warrants Fund
Assets
Cash and cash equivalents
Due from other agency funds
Other receivables
Total assets
Liabilities
Vouchers payable
Accrued liabilities
Total liabilities
Non -Profit License Plates Fund
Assets
Cash and cash equivalents
Liabilities
Vouchers payable
Accrued liabilities:
Due to non-profit agency
Total liabilities
Organ and Tissue Education Fund
Assets
Cash and cash equivalents
Liabilities
Vouchers payable
Accrued liabilities - due to State of Hawaii
Total liabilities
Balance Balance
July 1, June 30,
2012 Additions Deductions 2013
$ 221,496 $
13,396 $
252
$ 234,640
2,246
2,542
2,246
2,542
11,150
10,065
11,150
10,065
$ 234,892 $
26,003 $
13,648
$ 247,247
$ - $ 252 $ 252 $ -
234,892 27,175 14,820 247,247
$ 234,892 $ 27,427 $ 15,072 $ 247,247
$ 1,175 $ 4,750 $ 4,675 $ 1,250
$ - $ 4,650 $ 4,650 $ -
1,175 4,750 4,675 1,250
$ 1,175 $ 9,400 $ 9,325 $ 1,250
$ 923 $ 3,547 $ 3,516 $ 954
$ - $ 3,516 $ 3,516 $ -
923 3,547 3,516 954
$ 923 $ 7,063 $ 7,032 $ 954
- 118 -
COUNTY OF HAWAII
Agency Funds
Combining Statement of Changes in Assets and Liabilities
For the Fiscal Year Ended June 30, 2013
Business Improvement District 1-Kailua
Assets
Cash and cash equivalents
Other receivables -BID 1-Kailua Assessment
Other receivables
Total assets
Liabilities
Vouchers payable
Accrued liabilities - due to KVBID
Accrued liabilities
Assets held for the benefit
of improvement districts
Total liabilities
Total - All Agency Funds
Assets
Cash and cash equivalents
Investments
Due from other agency funds
Due from other non -agency funds
Other receivables -BID 1-Kailua Assessment
Other receivables
Total assets
Liabilities
Vouchers payable
Due to other agency funds
Accrued liabilities
Accrued liabilities - due to non-profit agency
Accrued liabilities - due to State of Hawaii
Accrued liabilities - due to KVBID
Advances payable
Assets held for the benefit
of improvement districts
Total liabilities
See accompanying independent auditors' report.
Balance Balance
July 1, June 30,
2012 Additions Deductions 2013
$ 2,183 $ 754,248 $ 756,247 $ 184
14,997 760,006 754,262 20,741
- 470 470 -
$ 17,180 $ 1,514,724 $ 1,510,979 $ 20,925
$ - $ 755,241 $ 755,241 $ -
2,183 121 2,183 121
- 62 - 62
14,997 897,965 892,220 20,742
$ 17,180 $ 1,653,389 $ 1,649,644 $ 20,925
$ 3,496,791 $ 237,213,653 $ 237,616,347 $ 3,094,097
1,45 8,449
189,525
1,458,449
189,525
2,246
2,542
2,246
2,542
-
208,885,478
208,885,478
-
14,997
760,006
754,262
20,741
19,296
395,784
363,321
51,759
$ 4,991,779
$ 447,446,988
$ 449,080,103
$ 3,358,664
$ -
$ 131,208,011
$ 131,208,011
$ -
2,246
2,542
2,246
2,542
934,299
383,103,299
383,023,449
1,014,149
1,175
4,750
4,675
1,250
1,756,468
21,507,770
21,580,454
1,683,784
2,183
121
2,183
121
534,805
337,096
632,177
239,724
1,760,603 1,334,901 2,678,410 417,094
$ 4,991,779 $ 537,498,490 $ 539,131,605 $ 3,358,664
- 119-
COUNTY OF HAWAII
Private Purpose Trusts
Combining Statement of Private Purpose Trust Net Position
Assets
Cash and cash equivalents
Investments
Other Receivable
Total assets
Net Position
Held in trust for other parties
Total net position
See accompanying independent auditors' report.
June 30, 2013
Total
Private
Purpose
,r-+*
$ 1,741,254
3,030,761
463
$ 4,772,478
$ 2,158,043 $ 2,614,435 $ 4,772,478
$ 2,158,043 $ 2,614,435 $ 4,772,478
-120-
Shippers'
Geothermal
Wharf
Asset
Trust
Fund
Fund
$ 416,700
$ 1,324,554
1,741,343
1,289,418
-
463
$ 2,158,043
$ 2,614,435
Total
Private
Purpose
,r-+*
$ 1,741,254
3,030,761
463
$ 4,772,478
$ 2,158,043 $ 2,614,435 $ 4,772,478
$ 2,158,043 $ 2,614,435 $ 4,772,478
-120-
COUNTY OF HAWAII
Private Purpose Trusts
Combining Statement of Changes in Private Purpose Trust Net Position
For the Fiscal Year Ended June 30, 2013
Additions
Contributions:
Puna Geothermal Venture
Investment earnings:
Net increase (decrease) in fair value of
investments
Dividends
Interest
Total additions
Deductions
Grant payments
Total deductions
Change in net position
Net position, beginning of year
Net position, end of year
See accompanying independent auditors' report.
$ 2,158,043 $ 2,614,435 $ 4,772,478
- 121 -
Shippers'
Total
Geothermal
Wharf
Private
Asset
Trust
Purpose
Fund
Fund
Trusts
$ 50,000
$ -
$ 50,000
(50,748)
80,715
29,967
-
55,825
55,825
459
1,641
2,100
(289)
138,181
137,892
-
290,734
290,734
-
290,734
290,734
(289)
(152,553)
(152,842)
2,158,332
2,766,988
4,925,320
$ 2,158,043 $ 2,614,435 $ 4,772,478
- 121 -
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-122-
STATISTICAL SECTION
(UNAUDITED)
Contents
Page
Financial Trends — These schedules contain trend information to help help the reader understand
how the County's financial performance and well-being have changed over time.
123
Revenue Capacity — These schedules contain information to help the reader assess the County's
most significant local revenue source, the property tax.
128
Debt Capacity — These schedules present information to help the reader assess the affordability
of the County's current levels of outstanding debt and the County's ability to issue additional
debt in the future.
134
Demographic and Economic Information — These schedules offer demographic and economic
indicators to help the reader understand the environment within which the County's financial
acitivities take place.
137
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.
139
Governmental activities
Net investment in capital assets
Restricted
Unrestricted
Total governmental activities net position
Business -type activities
Net investment in capital assets
Restricted
Unrestricted
Total business -type activities net position
Primary government
Net investment in capital assets
Restricted
Unrestricted
Total primary government net position
Table 1
COUNTY OF HAWAII
Net Position by Component
Last Ten Fiscal Years
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
$336,435,768 $364,662,377 $386,861,296 $394,789,635 $419,174,559 $419,615,479 $469,235,881 $514,309,238 $594,384,524 $699,326,156
37,333,730 41,950,262 44,737,588 54,857,023 66,977,935 63,408,379 43,958,660 51,840,697 48,360,223 64,437,707
(10,384,644) (11,741,743) 8,885,911 21,350,091 27,329,104 42,457,132 37,623,937 40,287,046 39,340,897 1,895,863
$363,384,854 $394,870,896 $440,484,795 $470,996,749 $513,481,598 $525,480,990 $550,818,478 $606,436,981 $682,085,644 $765,659,726
$ 324,942
$ 325,800
$ 317,534
$ 310,409
$ 307,424
$ 305,127
$ 303,244 $
308,966 $
315,848 $ 315,255
180,782
182,167
182,797
183,832
184,352
184,643
184,914
185,087
185,148 -
873,704
850,962
813,431
636,756
608,195
609,798
497,466
449,581
455,918 1,045,190
$ 1,379,428
$ 1,358,929
$ 1,313,762
$ 1,130,997
$ 1,099,971
$ 1,099,568
$ 985,624 $
943,634 $
956,914 $ 1,360,445
$336,760,710 $364,988,177 $387,178,830 $395,100,044 $419,481,983 $419,920,606 $469,539,125 $514,618,204 $594,700,372 $699,641,411
37,514,512 42,132,429 44,920,385 55,040,855 67,162,287 63,593,022 44,143,574 52,025,784 48,545,371 64,437,707
(9,510,940) (10,890,781) 9,699,342 21,986,847 27,937,299 43,066,930 38,121,403 40,736,627 39,796,815 2,941,053
$364,764,282 $396,229,825 $441,798,557 $472,127,746 $514,581,569 $526,580,558 $551,804,102 $607,380,615 $683,042,558 $767,020,171
Unaudited - see accompanying independent auditors' report.
Table 2
COUNTY OF HAWAII
Changes in Net Position
Last Ten Fiscal Years
Expenses
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Program Revenues
Governmental activities:
$ 40,085,357
$ 51,262,329
$ 38,264,132
$ 46,349,904
$ 68,794,961
$ 69,968,534
$ 65,552,278
$ 53,439,428
$ 56,115,599
$ 55,616,102
Charges for services:
90,434,696
94,422,057
106,067,466
118,010,316
137,500,608
144,755,837
148,115,428
154,008,027
152,288,979
151,975,049
General government
$ 1,947,554
$ 3,227,420
$ 4,032,542
$ 4,460,016
$ 6,017,819
$ 5,442,950
$ 4,315,849
$ 1,856,795
$ 2,306,855
$ 1,695,152
Public safety
5,061,174
6,262,259
6,975,962
5,798,126
5,843,733
4,846,834
4,449,519
4,447,120
5,136,278
5,117,102
Highways and streets
6,052,544
7,629,139
9,079,084
9,354,639
9,701,815
9,636,799
9,351,219
9,800,983
10,544,711
10,159,443
Health, education and welfare
884,075
1,272,091
980,147
799,075
754,758
532,832
713,774
424,107
454,913
570,312
Culture and recreation
1,588,945
1,521,127
1,439,784
1,634,008
1,595,409
1,557,597
1,609,041
1,626,178
1,601,195
1,794,553
Sanitation
13,653,722
15,465,478
16,469,745
18,486,502
18,643,952
16,415,985
14,934,570
15,889,364
14,831,846
15,593,933
Operating grants and contributions
33,327,191
36,370,993
38,252,889
38,068,138
46,117,399
42,273,795
49,571,173
50,820,951
45,767,655
44,410,353
Capital grants and contributions
9,668,981
26,221,627
14,801,828
7,805,986
9,327,408
15,728,186
13,532,669
38,810,806
86,754,033
107,584,670
Total governmental activites program revenues
72,184,186
97,970,134
92,031,981
86,406,490
98,002,293
96,434,978
98,477,814
123,676,304
167,397,486
186,925,518
Business -type activities:
$ 217,210,241
$ 240,043,116
$ 246,743,147
$ 296,382,505
$ 330,238,777
$ 372,239,675
$ 339,250,643
$ 346,095,735
$ 352,493,496
$ 352,819,516
Charges for services:
Health, education and welfare
303,047
314,971
338,141
345,802
365,655
371,511
337,982
372,599
393,464
432,057
Operating grants and contributions
143,769
135,829
141,019
134,211
125,795
135,674
136,802
133,215
131,227
123,800
Total business -type activities program revenues
446,816
450,800
479,160
480,013
491,450
507,185
474,784
505,814
524,691
555,857
Total primary grovemmentprogram revenues
$ 72,631,002
$ 98,420,934
$ 92,511,141
$ 86,886,503
$ 98,493,743
$ 96,942,163
$ 98,952,598
$ 124,182,118
$ 167,922,177
$ 187,481,375
Expenses
Governmental activities:
General govemment
$ 40,085,357
$ 51,262,329
$ 38,264,132
$ 46,349,904
$ 68,794,961
$ 69,968,534
$ 65,552,278
$ 53,439,428
$ 56,115,599
$ 55,616,102
Public safety
90,434,696
94,422,057
106,067,466
118,010,316
137,500,608
144,755,837
148,115,428
154,008,027
152,288,979
151,975,049
Highways and streets
17,563,608
20,857,341
24,783,476
28,185,968
33,577,707
36,466,541
38,075,835
34,812,165
42,462,299
42,219,903
Health, education and welfare
23,041,963
21,503,635
20,181,685
23,203,874
14,986,972
33,783,223
30,528,977
30,336,420
28,127,691
28,001,020
Culture and recreation
15,979,854
16,124,457
19,464,962
26,948,501
20,450,172
32,633,418
14,739,755
22,167,818
23,412,948
22,121,336
Sanitation
20,084,654
26,669,660
27,265,515
42,682,281
41,254,728
40,191,704
27,527,841
35,604,394
35,049,546
38,505,086
Interest on long-term debt
9,553,966
8,718,758
10,168,710
10,303,332
13,117,325
13,914,969
14,120,398
15,176,682
14,519,382
13,885,003
Total governmental activities expenses
216,744,098
239,558,237
246,195,946
295,684,176
329,682,473
371,714,226
338,660,512
345,544,934
351,976,444
352,323,499
Business -type activities:
Health, education and welfare
466,143
484,879
547,201
698,329
556,304
525,449
590,131
550,801
517,052
496,017
Total business -type activities expenses
466,143
484,879
547,201
698,329
556,304
525,449
590,131
550,801
517,052
496,017
Total primary govemment expenses
$ 217,210,241
$ 240,043,116
$ 246,743,147
$ 296,382,505
$ 330,238,777
$ 372,239,675
$ 339,250,643
$ 346,095,735
$ 352,493,496
$ 352,819,516
Net Expense
Governmental activities
$ (144,559,912)
$ (141,588,103)
$ (154,163,965)
$ (209,277,686)
$ (231,680,180)
$ (275,279,248)
$ (240,182,698)
$ (221,868,630)
$ (184,578,958)
$ (165,397,981)
Business -type activities
(19,327)
(34,079)
(68,041)
(218,316)
(64,854)
(18,264)
(115,347)
(44,987)
7,639
59,840
Total primary government net expense
$ (144,579,239)
$ (141,622,182)
$ (154,232,006)
$ (209,496,002)
$ (231,745,034)
$ (275,297,512)
$ (240,298,045)
$ (221,913,617)
$ (184,571,319)
$ (165,338,141)
Continued next page
General Revenues and Other Changes in
Net Position
16,734,850
18,510,262
18,999,596
19,395,089
17,888,019
17,500,038
19,533,165
19,074,105
Table 2
Governmental activities:
1,729,531
2,957,188
4,976,178
9,727,911
11,454,850
8,369,221
2,187,266
609,617
230,804
(81,020)
General revenues:
4,825,259
3,657,794
2,110,854
3,063,413
7,801,194
2,749,335
1,779,223
5,973,275
1,773,258
2,320,838
Property taxes
$ 119,864,237
$ 129,775,410
$ 152,182,806
$ 183,611,050
$ 210,217,690
$ 229,262,980
$ 218,037,567
$ 225,055,099
$ 209,894,427
$ 200,775,779
Public service company taxes
5,332,478
6,351,273
6,811,483
7,396,084
8,381,367
10,228,607
9,647,055
9,296,852
9,896,715
10,766,021
Public utility franchise taxes
5,373,144
6,016,890
7,328,887
8,520,133
9,026,841
11,118,365
8,963,041
9,415,624
11,065,112
11,087,369
Fuel taxes
7,552,317
7,580,740
7,857,394
8,471,453
7,887,998
7,662,113
7,405,996
7,603,501
8,293,200
6,352,944
Grants and contributions not restricted to
-
-
-
-
-
-
-
-
342,275
specific programs
15,251,443
16,734,850
18,510,262
18,999,596
19,395,089
17,888,019
17,500,038
19,533,165
19,074,105
17,750,132
Investment earnings (loss)
1,729,531
2,957,188
4,976,178
9,727,911
11,454,850
8,369,221
2,187,266
609,617
230,804
(81,020)
Other
4,825,259
3,657,794
2,110,854
3,063,413
7,801,194
2,749,335
1,779,223
5,973,275
1,773,258
2,320,838
Total governmental activities
159,928,409
173,074,145
199,777,864
239,789,640
274,165,029
287,278,640
265,520,186
277,487,133
260,227,621
248,972,063
Business -type activities:
General revenues:
Investment earnings
8,006
13,580
22,874
35,551
33,828
17,861
1,403
2,997
5,641
1,416
Other
-
-
-
-
-
-
-
-
342,275
Total business -type activities
8,006
13,580
22,874
35,551
33,828
17,861
1,403
2,997
5,641
343,691
Total primary government
$ 159,936,415
$ 173,087,725
$ 199,800,738
$ 239,825,191
$ 274,198,857
$ 287,296,501
$ 265,521,589
$ 277,490,130
$ 260,233,262
$ 249,315,754
Changes In Net Position
Governmental activities
$ 15,368,497
$ 31,486,042
$ 45,613,899
$ 30,511,954
$ 42,484,849
$ 11,999,392
$ 25,337,488
$ 55,618,503
$ 75,648,663
$ 83,574,082
Business -type activities
(11,321)
(20,499)
(45,167)
(182,765)
(31,026)
(403)
(113,944)
(41,990)
13,280
403,531
Total primary government changes in net position
$ 15,357,176
$ 31,465,543
$ 45,568,732
$ 30,329,189
$ 42,453,823
$ 11,998,989
$ 25,223,544
$ 55,576,513
$ 75,661,943
$ 83,977,613
Unaudited - see accompanying independent auditors' report
Table 3
COUNTY OF HAWAII
All other Government Funds:
Fund Balances, Governmental Funds
Reserved
(Modified accrual basis of accounting)
66,720,836
103,359,563
122,060,550
141,972,067
177,995,184
106,555,618
-
Last Ten Fiscal Years
Unreserved, reported in:
2004
2005
2006 2007 2008
2009
2010
2011
2012
2013
General Fund:
24,874,744
24,553,386
26,088,685
29,436,463
Capital projects fund
Reserved
$ 7,452,338
$ 8,313,800
$ 11,519,135 $ 15,659,683 $ 17,468,606
$ 14,974,272
$ 8,088,347
$
$
$
Unreserved
12,270,870
15,664,272
23,446,072 28,950,668 31,401,745
44,603,975
31,430,570
-
-
Nonspendable
-
-
- - -
-
-
2,835,361
3,304,551
3,492,464
Restricted
40,148,878
36,866,120
29,502,567
Unassigned
4,296,363
3,693,958
4,863,905
Committed
-
(3,609,332)
(10,258,317)
8,756,426
11,710,875
12,065,528
Assigned
172,047,513
242,619,509
205,641,818
183,982,500
132,701,268
17,960,596
21,840,843
24,832,390
Unassigned
10,809,404
8,176,727
8,694,320
Total general fund
19,723,208
23,978,072
34,965,207 44,610,351 48,870,351
59,578,247
39,518,917
44,658,150
48,726,954
53,948,607
All other Government Funds:
Reserved
66,991,733
66,720,836
103,359,563
122,060,550
141,972,067
177,995,184
106,555,618
-
Unreserved, reported in:
Special revenue fund
15,151,534
18,525,727
20,342,112
24,874,744
24,553,386
26,088,685
29,436,463
Capital projects fund
32,293,518
64,915,483
48,345,838
95,684,215
39,116,365
(20,101,369)
(3,290,813)
-
-
-
Restricted
-
-
-
-
-
77,739,628
71,033,712
104,886,880
Committed
40,148,878
36,866,120
29,502,567
Unassigned
-
-
-
-
-
(3,609,332)
(10,258,317)
6,914,320
Total of other governmental funds
114,436,785
150,162,046
172,047,513
242,619,509
205,641,818
183,982,500
132,701,268
114,279,174
97,641,515
141,303,767
Total Fund Balances $134,159,993 $174,140,118 $207,012,720 $287,229,860 $254,512,169 $243,560,747 $172,220,185 $158,937,324 $146,368,469 $195,252,374
Unaudited - see accompanying independent auditors' report.
NOTE—GASB 54 was implemented in 2011. Except for the unassigned category, conversion of prior year data to new categories is not possible at this time.
Table 4
COUNTY OF HAWAII
Changes in Fund Balances, Governmental Funds
(Modified accrual basis of accounting)
Last Ten Fiscal Years
(Amounts in thousands)
Total Revenues
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Revenues:
Property tax
$121,868
$131,087
$153,207
$181,446
$ 208,313
$ 225,858
$ 215,548
$ 216,511
$ 208,231
$ 201,201
Public service company tax
5,332
6,351
6,812
7,396
8,381
10,229
9,647
9,297
9,897
10,766
Fuel tax
7,552
7,581
7,857
8,471
7,888
7,662
7,406
7,603
8,293
6,353
Public utility franchise tax
5,373
6,017
7,329
8,520
9,027
11,118
8,963
9,416
11,065
11,087
Licenses and permits
11,840
14,442
16,544
16,269
15,918
14,972
14,725
15,097
15,790
15,991
Intergovernmental
58,559
73,372
69,637
63,599
72,601
70,869
77,614
93,748
100,867
79,912
Charges for services
14,467
18,149
19,852
21,685
22,154
21,404
18,909
16,416
16,885
17,055
Investment earnings (loss)
1,806
3,104
5,223
10,291
12,144
8,914
2,253
510
406
(618)
Settlement contributions
-
-
-
-
-
-
-
-
-
12,500
Other
4,718
4,450
4,380
5,073
7,151
5,690
3,241
7,874
4,201
4,399
Total Revenues
231,515
264,553
290,841
322,750
363,577
376,716
358,306
376,472
375,635
358,646
Expenditures:
Current:
General government
23,070
26,183
31,153
37,652
42,991
45,882
40,586
34,251
35,088
33,360
Public safety
69,117
76,404
83,591
93,241
103,617
107,540
108,798
104,917
104,523
106,885
Highways and streets
9,542
9,787
12,608
14,033
19,529
17,159
20,222
17,114
17,338
17,923
Sanitation
17,602
21,883
26,565
31,817
33,405
35,025
35,675
28,424
29,511
30,672
Health, education and welfare
19,047
19,870
19,050
21,470
24,609
24,596
25,519
26,847
23,749
24,199
Culture and recreation
13,169
13,982
14,731
17,118
18,179
18,853
17,266
16,001
16,763
16,337
Pension and retirement contributions
11,081
14,204
19,937
21,796
24,296
28,870
28,509
27,284
27,773
29,816
Employees'healthinsurance
14,256
16,168
16,133
16,941
18,089
19,119
23,573
25,212
25,902
26,011
Other postemploymentbenefits
-
-
-
-
13,629
14,950
15,700
17,307
-
-
Other
7,128
6,133
6,780
5,108
5,344
6,257
4,773
4,758
4,183
2,991
Debt service:
Principal
12,826
13,150
14,060
16,076
16,548
19,749
20,720
42,233
24,834
25,718
Interest
9,283
9,534
9,914
9,894
13,116
12,790
14,584
14,841
15,032
14,345
Capital outlay
23,474
32,816
30,588
52,285
70,156
89,368
100,653
87,782
71,220
48,565
Total Expenditures
229,595
260,114
285,110
337,431
403,508
440,158
456,578
446,971
395,916
376,822
Revenues over (under) Expenditures
1,920
4,439
5,731
(14,681)
(39,931)
(63,442)
(98,272)
(70,499)
(20,281)
(18,176)
Other Financing Sources (Uses):
Sale of assets
1,593
1,486
82
5
3,470
58
10
6
153
1
Capital leases
1,474
1,369
404
2,403
2,187
1,026
1,948
47
2,521
1,307
State Revolving Fund loans
-
1,504
25
6,255
1,916
280
6,811
9,257
4,569
4,991
Sale ofbonds
1,725
30,000
25,000
85,000
-
50,000
-
45,000
-
50,480
Issuance of bond anticipation notes (BANS)
-
-
-
-
-
-
19,000
-
-
-
Refinding bonds
24,595
-
31,607
-
-
-
47,510
Premium on bonds
3,025
972
3,099
185
-
2,078
17,570
Refunding bonds/BANs issuance costs
-
(129)
-
(218)
-
-
(19)
-
-
-
Payment torefinded bond escrow agent
(25,885)
(32,699)
-
(45,352)
Retirement of refunded debt
-
-
-
-
-
(9,635)
Transfers in
39,440
42,119
45,691
59,139
64,929
56,697
61,495
56,099
59,971
51,356
Transfers out
(39,440)
(42,119)
(45,691)
(59,139)
(64,929)
(56,697)
(61,495)
(56,099)
(59,971)
(51,356)
Total other financing sources
4,792
35,965
26,483
95,452
7,573
51,549
27,750
56,388
7,243
66,872
Net change in fund balances
$ 6,712
$ 40,404
$ 32,214
$ 80,771
$ (32,358)
$ (11,893)
$ (70,522)
$ (14,111)
$ (13,038)
$ 48,696
Debt service as a percentage of
noncapital expenditures
10.8%
10.3%
9.7%
9.0%
9.3%
9.0%
10.4%
15.9%
12.3%
13.9%
Unaudited - see accompanying independent auditors' report.
-127-
N
00
Table 5
COUNTY OF HAWAII
Real Property Assessed Values by Classification and Tax Rates
Last Ten Fiscal Years
(Values in Thousands)
Value of
Building
Value of
Land
Value of
Fiscal Class of Net Taxable
Tax Rates
Net Taxable
Tax Rates
Net Taxable
Year Property Building
Per $1000
Land
Per $1000
Real Property
2004 Improved Residential
$826,773
$ 9.10
$1,035,139
$ 9.10
$1,861,912
Unimproved Residential
28,212
9.85
308,963
9.85
337,175
Apartment
1,506,172
9.85
777,079
9.85
2,283,251
Hotel and Resort
780,725
9.85
856,550
9.85
1,637,275
Commercial
473,665
9.85
416,505
9.85
890,170
Industrial
207,676
9.85
227,817
9.85
435,493
Agricultural
842,650
9.85
1,522,580
9.85
2,365,230
Conservation
17,250
9.85
325,262
9.85
342,512
Homeowners
1,453,595
5.55
1,284,728
5.55
2,738,323
$6,136,718
$6,754,623
$12,891,341
Fiscal year 2004 total direct rate $9.09
2005 Improved Residential
$969,500
$ 9.10
$1,264,100
$ 9.10
$2,233,600
Unimproved Residential
30,408
9.85
366,885
9.85
397,293
Apartment
1,772,930
9.85
745,530
9.85
2,518,460
Hotel and Resort
845,026
9.85
897,268
9.85
1,742,294
Commercial
516,945
9.85
455,664
9.85
972,609
Industrial
226,265
9.85
239,022
9.85
465,287
Agricultural
917,253
9.85
1,697,117
9.85
2,614,370
Conservation
24,485
9.85
346,186
9.85
370,671
Homeowners
1,714,555
5.55
1,504,821
5.55
3,219,376
$7,017,367
$7,516,593
$14,533,960
Continued next page.
Fiscal year 2005 total direct rate $8.92
Table 5
Value of Building Value of Land Value of
Fiscal Class of Net Taxable Tax Rates Net Taxable Tax Rates Net Taxable
Year Property Building Per $1000 Land Per $1000 Real Property
2006 Improved Residential
$1,082,244
$ 9.10
$1,935,085
$ 9.10
$3,017,329
Unimproved Residential
29,762
9.85
470,738
9.85
500,500
Apartment
2,340,515
9.85
907,150
9.85
3,247,665
Hotel and Resort
981,538
9.85
942,988
9.85
1,924,526
Commercial
538,389
9.85
502,433
9.85
1,040,822
Industrial
255,292
9.85
280,950
9.85
536,242
Agricultural
970,198
9.85
2,082,838
9.85
3,053,036
Conservation
21,488
9.85
340,573
9.85
362,061
Homeowners
1,191,435
5.55
1,604,418
5.55
2,795,853
$7,410,861
$9,067,173
$16,478,034
Fiscal year 2006 total direct rate $8.98
2007 Improved Residential
$1,281,050
$ 8.10
$2,938,402
$ 8.10
$4,219,452
Unimproved Residential
43,372
8.10
762,664
8.10
806,036
Apartment
3,154,981
8.10
1,347,158
8.10
4,502,139
Hotel and Resort
1,209,050
9.00
1,050,628
9.00
2,259,678
Commercial
620,567
9.00
662,801
9.00
1,283,368
Industrial
317,852
9.00
397,211
9.00
715,063
Agricultural
1,195,256
8.35
3,985,647
8.35
5,180,903
Conservation
28,472
8.55
356,316
8.55
384,788
Homeowners
1,408,215
5.55
1,947,983
5.55
3,356,198
$9,258,815
$13,448,810
$22,707,625
Fiscal year 2007 total direct rate $7.96
2008 Improved Residential
$1,520,234
$ 8.10
$3,843,169
$ 8.10
$5,363,403
Unimproved Residential
40,056
8.10
430,757
8.10
470,813
Apartment
3,690,371
8.10
1,517,500
8.10
5,207,871
Hotel and Resort
1,377,492
9.00
1,194,879
9.00
2,572,371
Commercial
695,318
9.00
805,168
9.00
1,500,486
Industrial
370,118
9.00
474,100
9.00
844,218
Agricultural
1,353,403
8.35
4,529,187
8.35
5,882,590
Conservation
31,771
8.55
347,798
8.55
379,569
Homeowners
1,687,649
5.55
2,360,873
5.55
4,048,522
$10,766,412
$15,503,431
$26,269,843
Fiscal year 2008 total direct rate $7.94
Continued next page.
w
0
2009 Residential
Table 5
Value of Building Value of
Land Value of
Fiscal Class of Net Taxable Tax Rates Net Taxable
Tax Rates Net Taxable
Year Property Building Per $1000 Land
Per $1000 Real Property
2009 Residential
$2,385,714
$ 7.10
$4,287,515
$ 8.10
$6,673,229
Apartment
4,079,199
8.10
1,561,009
8.10
5,640,208
Hotel and Resort
1,542,712
9.00
1,271,240
9.00
2,813,952
Commercial
742,561
9.00
905,079
9.00
1,647,640
Industrial
418,607
9.00
561,220
9.00
979,827
Agricultural & Native Forest
2,245,161
6.35
4,325,743
8.35
6,570,904
Conservation
44,670
8.55
340,254
8.55
384,924
Homeowners
2,091,891
5.55
2,623,241
5.55
4,715,132
Affordable Rental Housing
41,793
5.55
38,026
5.55
79,819
$13,592,308
$15,913,327
$29,505,635
Fiscal year 2009 total direct rate $7.68
2010 Residential
$2,447,576
$ 7.10
$3,804,696
$ 8.10
$6,252,272
Apartment
3,602,514
8.10
1,546,866
8.10
5,149,380
Hotel and Resort
1,390,884
9.00
1,177,796
9.00
2,568,680
Commercial
733,260
9.00
928,999
9.00
1,662,259
Industrial
453,406
9.00
593,224
9.00
1,046,630
Agricultural & Native Forest
2,272,248
6.35
3,625,585
8.35
5,897,833
Conservation
46,321
8.55
337,860
8.55
384,181
Homeowners
2,388,048
5.55
2,686,692
5.55
5,074,740
Affordable Rental Housing
67,746
5.55
47,703
5.55
115,449
$13,402,003
$14,749,421
$28,151,424
Fiscal year 2010
total direct rate $7.75
2011 Residential
$3,040,977
$ 9.10
$3,787,185
$ 9.10
$6,828,162
Apartment
2,660,600
9.85
1,144,873
9.85
3,805,473
Hotel and Resort
820,418
9.85
690,834
9.85
1,511,252
Commercial
713,161
9.10
908,741
9.10
1,621,902
Industrial
454,868
9.10
594,589
9.10
1,049,457
Agricultural & Native Forest
2,232,765
8.35
2,860,494
8.35
5,093,259
Conservation
48,766
9.85
341,496
9.85
390,262
Homeowners
2,479,437
5.55
2,573,527
5.55
5,052,964
Affordable Rental Housing
108,290
5.55
57,821
5.55
166,111
$12,559,282
$12,959,560
$25,518,842
Continued next page.
Fiscal year 2011 total direct rate $8.39
Table 5
Value of
Building
Value of
Land
Value of
Fiscal Class of Net Taxable
Tax Rates
Net Taxable
Tax Rates
Net Taxable
Year Property Building
Per $1000
Land
Per $1000
Real Property
2012 Residential
Apartment
Hotel and Resort
Commercial
Industrial
Agricultural & Native Forest
Conservation
Homeowners
Affordable Rental Housing
2013 Residential
Apartment
Hotel and Resort
Commercial
Industrial
Agricultural & Native Forest
Conservation
Homeowners
Affordable Rental Housing
$2,849,965
$ 9.10
$3,549,133
$ 9.10
$6,399,098
2,772,190
9.85
1,147,288
9.85
3,919,478
771,971
9.85
601,800
9.85
1,373,771
676,465
9.10
837,094
9.10
1,513,559
446,247
9.10
563,710
9.10
1,009,957
2,023,285
8.35
2,571,826
8.35
4,595,111
44,874
9.85
323,210
9.85
368,084
2,480,038
5.55
2,524,611
5.55
5,004,649
142,899
5.55
79,498
5.55
222,397
$12,207,934
$12,198,170
$24,406,104
Fiscal year 2012
total direct rate $8.52
$2,872,890
$ 10.05
$3,534,961
$ 10.05
$6,407,851
2,403,216
10.85
1,069,999
10.85
3,473,215
711,884
I0.85
506,998
10.85
1,218,882
661,323
10.05
806,131
10.05
1,467,454
472,242
10.05
463,832
10.05
936,074
2,067,097
9.25
2,425,798
9.25
4,492,895
41,505
10.85
287,375
10.85
328,880
2,525,018
6.15
2,502,822
6.15
5,027,840
110,208
6.15
64,270
6.15
174,478
$11,865,383
$11,662,186
$23,527,569
Fiscal year 2013
total direct rate $8.46
Source: County of Hawaii, Department of Finance, Real Property Tax Division
NOTES: Assessed value is at 100% of market value
Property is reassessed annually.
The County Council sets the tax rates annually.
There are no overlapping property tax rates in the County of Hawaii.
The improved residential and unimproved residential classes were combined into a single class beginning with the fiscal
years ending June 30, 2009.
Unaudited - see accompanying independent auditors' report.
Taxpayer Business
Mauna Kea/Hapuna Beach Corps. Developer/Hotel
Hilton Land Investment 1 LLC Hotel
Hualalai Investors LLC
Developer/Hotel
Orchid 09 LLC
Hotel
WB KD Acquisition LLC
Developer
Mauna Lani Resort Inc.
Developer/Hotel
Hilton Resorts Corp.
Timeshare
Target Coporation
Retailer
Kohanaiki Shores LLC
Developer
Ho Retail Properties
Devoloper
BP Bishop Estate
Developer
Mauna Kea Development Corp
Hotels/Dev.
WB Kukio Resorts LLC
Developer
Global Resort Partners
Hotel
Liliuokalani Trust Estate
Land Trust
FHR (ML) Hotel Holdings LLC
Hotel
1250 Oceanside Partners
Developer
Kaupulehu Makai Venture
Developer
RWH Inc.
Hotel
Table 6
COUNTY OF HAWAII
Principal Taxpayers
June 30, 2013 and 2004
Fiscal Year 2013
Fiscal Year 2004
Percentage
Percentage
2012
of Total
2003
of Total
Assessed
Assessed
Assessed
Assessed
Valuation
Rank
Valuation
Valuation
Rank
Valuation
$ 187,032,300
3
0.8%
$ -
-
203,948,300
1
0.9%
-
-
197,921,000
2
0.8%
-
-
115,055,200
5
0.5%
-
-
73,331,000
7
0.3%
-
-
95,267,000
6
0.4%
102,923,900
7
0.7%
132,459,000
4
0.6%
-
-
65,499,500
8
0.3%
-
-
65,342,600
9
0.3%
-
-
58,833,600
10
0.3%
-
-
-
-
428,030,800
1
2.7%
-
-
238,141,700
2
1.5%
-
-
190,704,200
3
1.2%
-
-
156,732,600
4
1.0%
-
-
143,313,700
5
0.9%
-
-
128,678,600
6
0.8%
-
-
78,528,600
8
0.5%
-
-
74,396,800
9
0.5%
-
-
54,723,400
10
0.4%
$1,194,689,500
5.2%
$ 1,596,174,300
10.2%
Note: Gross valuation at January 1, 2012: $23,527,568,906
Gross valuation at January 1, 2003: $15,605,696,000
Source: County of Hawaii, Department of Finance, Real Property Tax Division
Unaudited - see accompanying independent auditors' report.
-132-
COUNTY OF HAWAII
Property Tax Levies and Collections
Last Ten Fiscal Years
Table 7
*Outstanding
* Amounts reflect subsequent adjustments
Source: County of Hawaii, Department of Finance, Real Property Tax Division
Unaudited - see accompanying independent auditors' report.
*Total
Delinquent
*Current
*Current
*Percent
*Delinquent
*Total
Collections as
*Outstanding
Taxes as
Fiscal
Tax
Tax
of Levy
Tax
Tax
Percent of
Delinquent
Percent of
Year
Levy
Collections
Collected
Collections
Collections
Current Levy
Taxes
Current Levy
2004
$116,510,063
$113,501,954
97%
$ 2,906,331
$ 116,408,285
100%
$ 101,778
0%
2005
128,843,220
126,574,921
98%
2,148,316
128,723,237
100%
119,983
0%
2006
150,292,805
147,712,630
98%
2,425,897
150,138,527
100%
154,278
0%
w 2007
181,541,559
177,326,418
98%
3,897,400
181,223,818
100%
317,741
0%
w
' 2008
207,892,224
202,702,858
98%
4,732,262
207,435,120
100%
457,104
0%
2009
226,638,993
219,437,531
97%
6,184,984
225,622,515
100%
1,016,478
0%
2010
215,262,172
207,501,307
96%
6,026,138
213,527,445
99%
1,734,727
1%
2011
215,729,273
208,106,918
96%
4,705,925
212,812,843
99%
2,916,430
1%
2012
204,868,717
198,274,186
97%
2,801,030
201,075,216
98%
3,793,501
2%
2013
197,043,064
191,154,491
97%
-
191,154,491
97%
5,888,573
3%
* Amounts reflect subsequent adjustments
Source: County of Hawaii, Department of Finance, Real Property Tax Division
Unaudited - see accompanying independent auditors' report.
Table 8
K1111MI &STIl /:1i�1I
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
(Amounts in thousands, except per capita)
NOTES:
(a) Includes governmental activities and business -type activities.
(b) See Table 11 for personal income and 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.
Business -Type
Component
Total Primary Government
Governmental Activities
Activities
Unit
Total Primary Government
and Component Unit
General
State
Total
General
State
Percentage
Percentage
Fiscal
Obligation
Revolving
Capital
Bonds/Notes
Primary
Obligation
Revolving
of Personal
Per
of Personal
Per
Year
Bonds (c)
Fund Loans
Leases
Payable
Government (a)
Bonds
Fund Loans
Income (b)
Capita (b)
Income (b)
Capita (b)
2004
$ 157,908,300
$ 29,497,373
$ 3,547,085
$ 1,065,417
$ 192,018,175
$15,737,700
$ 3,054,549
4.68%
$ 1,187
5.14%
$ 1,303
2005
182,158,285
28,760,504
3,642,928
1,041,285
215,603,002
14,657,708
2,905,354
4.87%
1,295
5.27%
1,401
2006
196,652,008
26,413,342
2,864,5I5
1,019,386
226,949,251
38,374,312
3,175,607
4.78%
1,326
5.65%
1,568
2007
269,281,339
30,246,751
4,085,735
995,854
304,609,679
36,708,368
5,599,767
5.94%
1,765
6.77%
2,011
2008
257,099,399
29,376,186
4,606,527
970,892
292,053,004
35,823,543
5,423,551
5.18%
1,661
5.91%
1,896
2009
291,363,218
26,697,288
4,179,805
944,124
323,184,435
33,954,671
8,154,507
5.68%
1,817
6.41%
2,054
2010
294,164,535
30,469,767
4,552,290
916,117
330,102,709
31,730,311
11,984,221
5.77%
1,843
6.54%
2,087
2011
301,549,005
36,555,264
3,057,082
884,232
342,045,583
44,673,293
18,012,314
5.59%
1,827
6.62%
2,162
2012
281,773,498
29,050,626
3,803,618
851,306
315,479,048
42,481,176
17,872,813
4.99%
1,668
5.95%
1,987
2013
313,322,466
20,882,283
3,632,420
1,296,633
339,133,802
40,179,834
12,911,310
N/A
N/A
N/A
N/A
NOTES:
(a) Includes governmental activities and business -type activities.
(b) See Table 11 for personal income and 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.
Table 9
COUNTY OF HAWAII
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
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.
-135-
Debt
Percent of
Applicable to
Net Taxable
Fiscal
Legal Debt
Property
Per
Year
Margin (a)
Value (b)
Capita (c)
2004
$ 176,693,195
1.4%
$ 1,082
2005
195,198,142
1.3%
1,167
2006
205,219,940
1.2%
1,199
2007
281,836,503
1.2%
1,633
2008
265,431,280
1.0%
1,510
2009
296,535,925
1.0%
1,667
2010
277,481,633
1.0%
1,549
2011
305,615,691
1.2%
1,636
2012
317,699,844
1.3%
1,679
2013
315,676,941
1.3%
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.
-135-
w
rn
Debt limit (a)
Debt applicable to limit
Legal debt margin (b)
Debt applicable to the limit
as a percentage of debt limit
Table 10
COUNTY OF HAWAII
Legal Debt Margin Information
Last Ten Fiscal Years
(Amounts in thousands)
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
$ 1,933,701
$ 2,180,094
$ 2,471,705
$ 3,406,144
$ 3,940,476
$ 4,425,845
$ 4,222,714
$ 3,827,826
$ 3,660,916
$ 3,529,135
176,396
195,198
205,220
281,837
265,431
296,536
277,482
315,616
317,700
315,677
$ 1,757,305
$ 1,984,896
$ 2,266,485
$ 3,124,307
$ 3,675,045
$ 4,129,309
$ 3,945,232
$ 3,512,210
$ 3,343,216
$ 3,213,458
9.12% 8.95% 8.30% 8.27% 6.74% 6.70% 6.57% 8.25% 8.68% 8.94%
NOTES:
(a) State finance statutes limit the County's outstanding general debt to no more than 15 percent of the net assessed value of property. See Table 5 for net assessed value of property.
(b) The legal debt margin is the County's available borrowing authority under state finance statutes and is calculated by subtracting the net debt applicable to the legal debt
limit from the legal debt limit.
Unaudited - see accompanying independent auditors' report.
Legal Debt Margin Calculation for Fiscal Year 2013
Net assessed value $ 23,527,569
Debt limit (15% of net assessed value) $ 3,529,135
Debt applicable to limit 315,677
Legal debt margin $ 3,213,458
Table 11
COUNTY OF HAWAII
Demographic and Economic Statistics
Last Ten Fiscal Years
Fiscal
*Personal
*Per
Year
*Resident
Income
Capita
Ended
Population
(thousands
Personal
School
Unemployment
June 30,
as of July 1
of dollars)
Income
Enrollment
Rate
2003
158,442
$
3,869,362
$
24,421
29,635
4.6%
2004
162,852
$
4,223,829
$
25,937
29,827
3.9%
2005
168,237
$
4,638,838
$
27,573
30,262
3.3%
2006
173,536
$
5,064,624
$
29,185
30,539
3.0%
2007
177,733
$
5,509,169
$
30,997
30,618
3.4%
2008
181,506
$
5,899,236
$
32,502
30,408
5.7%
2009
183,629
$
5,517,497
$
30,047
30,138
9.9%
2010
185,381
$
5,717,885
$
30,844
29,741
10.0%
2011
187,229
$
6,114,237
$
32,656
30,103
9.7%
2012
189,191
$
6,318,657
$
33,398
30,314
8.3%
* Amounts reflect subsequent adjustments
Source: County of Hawaii, Department of Research and Development
Unaudited - see accompanying independent auditors' report.
- 137-
Table 12
COUNTY OF HAWAI'I
Principal Employers, County of Hawaii
June 30, 2013 and 2004
NOTES:
(a) Data for Fiscal Year 2012 and Fiscal Year 2013 are unavailable.
Source: County of Hawaii, Department of Research and Development
Unaudited - see accompanying independent auditors' report.
-138-
2011 (a)
2004
Percentage
Percentage
of Total County
of Total County
Employer
Employees
Rank
Employment
Employees
Rank
Employment
State of Hawaii
7,962
1
10.1%
7,608
1
10.0%
County of Hawaii
2,630
2
3.3%
2,291
2
3.0%
United States Government
1,429
3
1.8%
1,221
3
1.6%
Hilton Waikoloa Village
935
4
1.2%
1,100
4
1.4%
KTA Super Stores
750
5
0.9%
785
5
1.0%
Walmart
741
6
0.9%
-
-
Four Seasons Resort Hualalai
650
7
0.8%
557
8
0.7%
The Fairmont Orchid, Hawaii
616
8
0.8%
600
6
0.8%
Mauna Kea Beach Hotel
513
9
0.6%
556
9
0.7%
Mauna Lani Resort (Operations) Inc.
450
10
0.6%
-
-
Mauna Lani Bay Hotel
-
-
580
7
0.8%
Hapuna Beach Prince Hotel
-
-
542
10
0.7%
Total
16,676
21.0%
15,840
20.7%
Total employee count
78,950
76,200
NOTES:
(a) Data for Fiscal Year 2012 and Fiscal Year 2013 are unavailable.
Source: County of Hawaii, Department of Research and Development
Unaudited - see accompanying independent auditors' report.
-138-
Table 13
COUNTY OF HAWAII
Full -Time Equivalent County Government Employees by Function
Last Ten Fiscal Years
Total 2,053.21 2,085.87 2,198.60 2,240.33 2,412.46 2,411.56 2,379.89 2,390.45 2,319.18 2,357.51
Source: County of Hawaii, Department of Finance
Unaudited - see accompanying independent auditors' report.
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Function
General government:
County Council
9.00
9.00
9.00
9.00
9.00
9.00
9.00
9.00
9.00
9.00
County Clerk
42.50
38.00
54.50
54.00
68.00
55.48
56.08
53.00
54.00
52.50
Legislative Auditor
-
-
-
-
-
5.00
5.00
5.00
4.75
3.75
Mayor
19.90
21.58
21.70
20.68
25.17
22.49
19.00
21.99
18.50
16.00
Corporation Counsel
38.00
41.00
39.00
39.98
33.00
30.00
32.00
29.00
29.00
27.00
Finance
90.00
88.00
91.00
94.49
102.89
128.44
123.89
121.89
123.35
131.37
Human Resources
24.00
26.00
24.50
27.46
28.98
28.96
27.98
25.49
25.48
24.00
Planning
31.00
31.50
35.00
36.00
47.00
48.00
49.00
49.49
48.00
50.00
Research & Development
12.00
13.00
13.20
14.48
15.00
15.00
14.00
14.00
12.00
12.00
Information Technology
15.00
14.00
17.00
17.00
17.00
16.00
15.48
16.00
16.00
16.00
Public Works Admin & Building
121.00
121.00
123.40
141.97
166.37
170.44
162.99
158.84
155.48
155.50
Public Safety:
Police
526.50
520.80
536.20
535.23
572.51
553.37
558.32
565.99
541.25
548.98
Fire
316.98
346.23
340.20
363.71
424.07
412.05
411.53
414.08
391.28
418.57
Liquor Control
11.00
11.00
13.00
12.00
14.48
14.00
14.00
14.00
15.00
14.00
Civil Defense
5.00
7.00
6.00
5.00
5.00
7.00
7.00
7.00
7.00
7.00
Prosecuting Attorney
86.00
83.00
86.50
93.00
96.49
103.00
98.24
99.00
91.49
99.49
Highways and Streets:
Mass Transit
5.00
7.00
6.00
5.00
7.00
6.00
7.00
7.00
7.00
8.00
Traffic and Highways
153.00
151.00
168.00
169.98
183.48
182.48
174.48
176.48
178.48
176.48
Sanitation:
Administration
5.00
18.00
19.50
19.49
19.98
19.49
16.98
18.49
17.00
17.00
Sewer
42.05
40.00
38.00
32.97
37.49
41.47
44.98
47.49
47.49
46.00
Vehicle Disposal
1.00
1.00
1.00
3.00
3.00
2.00
2.00
2.00
2.00
4.00
Solid Waste
56.75
57.80
69.00
86.49
87.49
93.49
93.00
95.00
99.00
98.00
Health, Education and Welfare:
Housing
42.48
43.48
39.50
43.97
46.95
44.95
47.44
47.48
43.48
41.00
Aging
10.00
10.00
12.50
13.00
12.00
12.00
11.00
12.00
13.00
11.00
Culture and Recreation
390.05
386.48
434.90
402.43
390.11
391.45
379.50
380.74
370.15
370.87
Total 2,053.21 2,085.87 2,198.60 2,240.33 2,412.46 2,411.56 2,379.89 2,390.45 2,319.18 2,357.51
Source: County of Hawaii, Department of Finance
Unaudited - see accompanying independent auditors' report.
Function
Public Safety:
Police:
DUI arrests
Traffic citations issued
Fire:
Fire responses
Emergency medical/rescue responses
Inspections - Occupancy/Fire Protective Equipment
Sanitation:
Refuse disposed (tons per year)
Highways and Streets:
In-house street resurfacing (miles)
Parks and Recreation:
Pavilion permits issued
Camping permits issued
Rounds of golf
Zoo attendance
Transit:
Bus passengers
Public Works:
Building permits issued
Electrical permits issued
Plumbing permits issued
Sign permits issued
Source: County of Hawaii, Individual Departments
Unaudited - see accompanying independent auditors' report.
Table 14
COUNTY OF HAWAII
Operating Indicators by Function
Last Ten Fiscal Years
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
900
964
1,163
1,354
1,397
1,395
1,452
1,468
1,403
1,176
58,432
51,818
54,435
54,606
62,736
66,461
63,883
61,947
60,967
49,292
1,207
888
897
1,095
892
751
889
731
684
654
14,693
13,671
14,945
15,502
16,098
15,099
15,308
15,726
16,361
16,454
4,210
1,843
2,131
1,958
1,858
1,479
1,579
3,021
2,050
1,463
201,011
225,051
222,945
223,144
210,199
172,431
154,914
166,455
152,949
153,581
12
42
15
33
26
27
23
18
20
20
1,739
1,908
1,888
1,744
2,055
2,310
2,340
4,667
2,805
2,775
4,627
4,765
5,146
5,200
3,870
3,998
4,290
4,019
4,450
5,175
80,015
79,101
74,677
82,182
76,648
80,229
80,407
83,358
72,162
71,352
156,184
163,176
171,958
172,315
163,601
182,286
172,737
172,677
213,537
245,715
N/A
N/A
711,608
727,677
821,359
908,651
1,060,057
1,149,042
1,315,222
1,269,550
4,418
5,350
5,883
5,165
4,507
3,929
3,234
3,039
3,258
4,754
3,896
4,750
5,097
5,072
4,569
3,869
3,602
3,821
4,080
5,137
1,907
3,888
4,557
4,368
3,622
2,983
2,638
2,071
1,749
2,001
46
63
50
51
75
62
62
58
55
52
Table 15
COUNTY OF HAWAII
Capital Asset Statistics by Functions
Last Ten Fiscal Years
2006 2007 2008 2009 2010 2011 2012 2013
8
2004
2005
Function
8
8
Public Safety:
8
13
Police:
10
10
Stations
8
8
Substations
3
13
Fire stations
20
20
Highways and Streets:
20
20
County streets (miles)
903
903
Streetlights
8,949
9,017
Parks and Recreation:
945
9,027
Parks
119
121
Gyms and recreation centers
38
38
Sanitation:
122
123
Sanitary sewers (miles)
53
53
*GIs database utilized beginning FY 2008
144
145
Source: County of Hawaii, Department of Research and Development
Unaudited - see accompanying independent auditors' report.
38
Table 15
COUNTY OF HAWAII
Capital Asset Statistics by Functions
Last Ten Fiscal Years
2006 2007 2008 2009 2010 2011 2012 2013
8
8
8
8
8
8
8
8
13
13
10
10
10
10
10
8
20
20
20
20
20
20
20
20
907
927
942
943
944
946
954
945
9,027
9,246
9,308
9,404
9,592
9,864
9,883
9,939
122
123
123
143
143
143
144
145
38
38
38
61
61
61
62
62
53
58
100*
100*
111*
111*
112*
112*