HomeMy WebLinkAbout2018-COH - Comprehensive Annual Financial ReportCOMPREHENSIVE
ANNUAL FINANCIAL REPORT
Fiscal Year Ended June 30, 2018
COUNTY OF HAWAII
Hilo, Hawaii
Harry Kim
Mayor
Wilfred Okabe
Managing Director
Prepared by
The Department of Finance
Deanna Sako
Director of Finance
COUNTY OF HAWAII
Comprehensive Annual Financial Report
For the Fiscal Year Ended June 30, 2018
Table of Contents
Page
INTRODUCTORY SECTION
Letter of Transmittal 1
GFOA Certificate of Achievement g
Organization Chart 9
List of Elected Officials 10
List of Principal Officials 11
FINANCIAL SECTION
Report of Independent Auditors 13
Management's Discussion and Analysis 16
Basic Financial Statements:
Government -wide Financial Statements:
Statement of Net Position 28
Statement of Activities 30
Fund Financial Statements:
Balance Sheet - Governmental Funds
32
Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Position
33
Statement of Revenues, Expenditures, and Changes in Fund Balances -
Governmental Funds
34
Reconciliation of the Change in Fund Balances of Governmental
Funds to the Statement of Activities
36
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual (Budgetary Basis) - General Fund
38
Statement of Net Position - Proprietary Funds
42
Statement of Revenues, Expenses, and Changes in Fund Net Position -
Proprietary Funds
43
Statement of Cash Flows - Proprietary Funds
44
Statement of Fiduciary Net Position - Fiduciary Funds
45
Statement of Changes in Fiduciary Net Position - Fiduciary Funds
46
Notes to the Basic Financial Statements
47
Required Supplementary Information
106
FINANCIAL SECTION (Continued)
143
Table 2 - Changes in Net Position
P�
Combining and Individual Nonmaj or Fund Statements and Schedules:
146
Combining Balance Sheet - Nonm aj or Governmental Funds
114
Combining Statement of Revenues, Expenditures, and Changes in Fund
148
Balances - Nonmajor Governmental Funds
118
Schedules of Revenues, Expenditures, and Changes in Fund Balances
153
Budget and Actual (Budgetary Basis) :
154
Highway Fund
121
Sewer Fund
122
Solid Waste Fund
123
Cemetery Fund
124
Parking Meter Fund
125
Vehicle Disposal Fund
126
Bikeway Fund
127
Workforce Investment Act Fund
128
Golf Course Fund
129
Geothermal Relocation and Community Benefits Fund
130
Beautification Fund
131
Hawaii County Housing Agency
132
Park Dedication Fund
133
Combining Statement of Agency Funds Net Position - Agency Funds
134
Combining Statement of Changes in Assets and Liabilities - Agency Funds
136
Combining Statement of Private Purpose Trust Net Position - Private Purpose Trusts
140
Combining Statement of Changes in Net Position - Private Purpose Trusts
141
STATISTICAL SECTION
Table 1 - Net Position by Component
143
Table 2 - Changes in Net Position
144
Table 3 - Fund Balances, Governmental Funds
146
Table 4 - Changes in Fund Balance, Governmental Funds
147
Table 5 - Real Property Assessed Values by Classification and Tax Rates
148
Table 6 - Principal Taxpayers
152
Table 7 - Property Tax Levies and Collections
153
Table 8 - Ratios of Outstanding Debt by Type
154
Table 9 - Ratios of General Bonded Debt Outstanding
155
Table 10 - Legal Debt Margin Information
156
Table 11 - Demographic and Economic Statistics
157
Table 12 - Principal Employers, County of Hawaii
158
Table 13 - Full -Time Equivalent County Government Employees by Function
159
Table 14 - Operating Indicators by Function
160
Table 15 - Capital Asset Statistics by Functions
161
IN'TRODUC'TORY SECTION
' OF ■
Harry Kim°�' '�= ■ '#•
i' F����, Deanna S. 5aka
Mayor i Director
i r
■
* P■
Countyof Hawaii
Finance Department
25 Aupuni Street, Suite 2103 • Hilo, Hawaii 96720
(808) 961-8234 ■ Fax (808) 961-8569
December ZS, 2018
The Honorable Mayor and Members of the Council
County of Hawaii
25 Aupuni Street
Hilo, H awai' i 96720
We transmit herewith the Comprehensive Annual Financial Report for the County of Hawaii,
State of Hawaii (the County), for the fiscal year July 1, 2017 to June 30, 2018.
This report was prepared by the County's Department of Finance. The accuracy of the financial
statements and the completeness and fairness of their presentation are the responsibility of the
County government. We believe the enclosed data are complete and accurate in all material
respects and are reported in a manner designed to present fairly the financial position and results
of operations of the various funds of the County. All disclosures necessary to convey the
maximum understanding of the County's financial activities have been included. Management's
discussion and analysis is also included to aid users of the financial statements.
This report presents the financial position of the County of Hawaii at June 301, 2018 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 HawaiTs organization chart and lists of
elected and principal officials.
The Financial Section contains management's discussion and analysis, the basic financial
statements, related notes, the combining and individual fund budgetary financial statements,
and the independent auditors' report.
The Statistical Section includes selected financial and demographic information, generally
presented on a multi-year basis.
This report includes all funds of the County of Hawaii, including its component unit, the
Department of Nater Supply, established by the County Charter as a semi -autonomous body of
the County government. This component unit is included in the County's reporting entity
because of its financial relationship with the County.
Hawaii County is an equal opportunity provider and employer.
- 1-
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, 41,025 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-Iona and South Kohala, major tourist destination areas on
the west side of the Big Island, are served by flights from the United States mainland, Canada
and now Japan through the Iona 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.
The unemployment rate for the County for the current fiscal year is at approximately 3%, which
has not changed from last year's rate for the same period.
Tourism has always been one of the major industries 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. In 20181, the County suffered from two natural disasters, Hurricane
Lane and a volcanic eruption, which took a toll on the island's visitor industry. Even with the
halting of volcanic activity in recent months, the outlook for the remainder of fiscal year 2019
remains optimistic.
In October 20181, the Hawaii Supreme Court by majority decision affirmed the Board of Land
and Natural Resources' decision to issue a Conservation District Use Permit (CDUP) for
construction of the Thirty Meter Telescope (TM'I) on Mauna Kea. Estimated at approximately
$1.4 billion, the project has been stagnant for the past several years as opponents challenged
whether or not the project had satisfied all procedural requirements when it obtained its original
CDUP.
2
Major Initiatives
For the Year
Public Safety —With the volcanic eruption in the lower Puna region endangering both lives and
property, the Hawai i County Civil Defense Agency (Agency), along with many of the
departments throughout the County, faced many challenges but worked tirelessly to keep the
community safe.
The Police Department won wide spread praise for its initial handling of the volcanic eruption in
populated areas in lower Puma in the tail end of fiscal year 2018. officers in the Puma and South
Hilo Districts were put on 12 hour shifts to maintain normal law enforcement operations while
also manning roadblocks and security details within the evacuated and other affected areas.
During the fiscal year, the Department fully transitioned to a new service weapon for all sworn
personnel replacing the issued Smith & Wesson 9mm handguns that were discontinued by the
manufacturer.
The Fire Department hosted the world renowned Resuscitation Academy here on the Big Island,
for the first time in the State, featuring the ongoing efforts in the County through the Fire
Department to improve cardiac arrest survival rates in the county. The Department also
implemented an in-house Confined Space Rescue training program that includes all of the
personnel who work as part of the hazmat or rescue teams. The Department also completed the
final phase of the Emergency Dispatch Center upgrades which included installation of ergonomic
and adjustable dispatch consoles.
Public Works — Over the past fiscal year the Department of Public Works (DPW) completed
major projects in our community including:
Work on the Hakalau Stream Bridge foundation completed just after fiscal year end with a
contract amount of $1.6 million that was 80% funded by the Federal Highway
Administration (FHWA). The bridge was ordered closed in January 2016 by the FHWA due
to severe scour damage to its foundation by prolonged exposure to strong erosive stream flow
during its 88 years of active use.
The Mass Transit Baseyard and Maintenance Facility has been substantially completed and
occupied since February 2018. The new facility consists of a five acre parcel and has
sufficient space to house the fleet of transit buses and staff.
Culture and Recreation — Parks and Recreation opened several new and improved facilities
during fiscal year 2018 for use by the community. one such project included the bunkhouses
that was a part of the approximately $10.5 million Mauna Idea Recreation Area Improvement
project that the Department opened up for rentals. In addition to the bunkhouses, this multi-
million dollar project included construction of new potable and nonpotable water tanks, new site
utilities, new fencing, gates and other park amenities.
Another large construction prof cct that was completed during the past fiscal year, included the
Pana' cwa Drag Strip at a cost of approximately $5.0 million, which involved renovation of
restrooms to be ADA compliant, new launch pad and guardrail systems and new concession
buildings. There was also the Kukuihacic Park Improvements proj cct at a cost of approximately
$5.4 million, which involved the construction of a new basketball court, new baseball ficld with
chain link fencing, dugout buildings and bleachers.
For the Future
Public Safety — A high priority for the Police Department is to seek funding to implement a body
worn camera system to assist officers in the field. The funding needed would be for acquiring
necessary equipment as well as additional personnel to manage the program. Additionally, in
conjunction with the Fire Department, the Department hopes that a long -envisioned combined
Fire and Police Dispatch Ccntcr will be realized.
Planning — The County Council adopted the Ka' a Community Development Plan in October
2017 and the nine year process demonstrated the passion and resilience of the community to
provide an inspired vision for Ka' 5. The Windward Planning Commission completed its review
of the Hamakua Community Development Plan in May 2018 and forwarded it on to the County
Council for final adoption. The multi-year comprehensive review of the Hawaii County
General Plan is more than half way complete and is expected to be adopted in fiscal year 2020.
Public Ll orks - DPW is currently working on the following County and Statewide
Transportation Improvement Program (STIP) projects:
• The Kalaniana' ole Avenue Reconstruction proj cct (Kamchamcha/Railroad Avenue to
Ka' uhanc Avcnuc) is valued at $17 million and started in fiscal year 2018. The proj cct
includes the widening of Kalaniana' ole Avenue to add a new sidewalk, bicycle and left turn
lanes, construction of a new waterline and appurtenances; drainage improvements;
reconstructing and rc-paving the roadway and installation of pavement markings and signs.
The proj cctcd completion date is the middle of fiscal year 2020.
• The Ali' i Drive Culvcrt Replacement proj cct, estimated at $12 million, is currently being bid
upon by contractors. This proj cct includes the demolition and reconstruction of a concrete
culvert bridge. Complction is slated for the middle of fiscal ycar 2021.
The construction of the West Hawaii office of the Prosecuting Attorney building is valued
at $14 million and will b c the offs cc compl cx for the prosecuting attorneys, cl crical,
admini strativc and program staff of the county. Compl cti on of the proj cct is currently sl atcd
for the middle of 2019.
•The Mamalahoa Highway (Route 19) Widening (Mud Lane to Mana Road) project is valued
at $19.6 million and started in fiscal year 2017. The project will construct turning lanes at
side intersections. The work will include grading, paving, retaining walls and installing
pavement markings and signs. Completion of the project is currently slated for the end of
fiscal year 2020.
Other Financial Information
Internal Vontrol
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 (Z) the valuation of costs and benefits
requires estimates and judgments by management.
Bndlgeta.y 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.
Signiji-caltl4ccounting Policies
The County has implemented Governmental Accounting Standards Board Statement No. 14, The
Financial Reporting Entity (GASB Statement No. 14), Statement No. 3 9, Determining Whether
Certain organizations Are Component Units (GASB Statement No. 3 9) and Statement No. 61,
The Financial Reporting Entity: omnibus an amendment of GASB Statements No. 14 and 34
(GASB Statement No. 6 1). 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 arc included in
the County's basic financial statements. For further discussion on other significant accounting
policies, refer to the notes to the basic financial statements.
Fihanci*al M2ghl2ghts
Total revenues increased by $59.1 million from the prior year, which was mostly due to property
taxes increasing by approximately $35.4 million, most notably in the homeowners class, which
increased by 8.0 percent from the prior ycar. Sccond, there was a $1 6.7 million increase in
capital grants and contributions related to increases in highways and streets. With a 13.5 percent
($59.2 million) increase in revenues that was offset by a 3.7 percent ($18.3 million) increase in
expenses, the County experienced a decrease in net position of $20.2 million, which represented
a 66.9% decrease over the prior year's decrease in net position. These results arc prior to the
impact of the prior year's cumulativc effect of an accounting change related to the reporting of
the County's liability related to other Postcmploymcnt Benefits (OPEB).
The County's investment in capital assets increased by $4.4 million from the prior year, which
represented a 1 percent increase. New and continued construction projects in the areas of
highways and streets and sanitation accounted for the majority of the increase.
Other Information
Independent 14 edit
The County Charter requires an annual audit by independent certified public accountants. N&K
CPAs Inc. was selected in accordance with the County Charter and the procurement provisions
of the Hawaii Revised Statutes (HRS) and Hawaii Administrative Rules (HAR) to perform the
audit.
-Eployee Union Contracts
County employees arc members of eight different bargaining units, of which six have contracts
that expire on June 30, 2019 and two will expire on June 30, 2021.
Certifzcate 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
Hawai' i for its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2017.
This was the thirtieth 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
I:
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 arc submitting it to the GFoA to determine its eligibility for
another certificate.
Acknowledgments
The preparation of this report was made possible by the efficient and dedicated services of the
entire staff of the Department of Finance and fiscal personnel in other departments. I am grateful
for their help in preparing this report. I also thank the Mayor and the members of the County
Council for their interest and support in assuring the continuing sound financial condition of the
County of Hawai' i.
Deanna Sako
Director of Finance
7
Government Finance Officers Association
Certificate of
Achievement
for Excellence
40
in Financial
Report40
ing
Presented to
County of Hawaii
Hawa11
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2017
Executive Director/CEO
County of Hawaii
Organization Chart
County Council
County Legislative
Clerk Auditor
Departments under
direct supervision of the
Managing Director:
Corporation Counsel
Finance
Planning
Envi ron m en tal 1 flan age m en t
Research & Development
Public Works
Parks &Recreation
Information Technology
County Electorate
Mayor Prosecuting Attorney
Office of Management:
Managing Director
Agencies under
direct supervision of the
Managing Director:
Civil Defense
Office of Aging
Mass Transit
Office of Housing &
Community Development
Departments under
commissions and
administrative supervision
of the Mayor:
Human Resources
Police
Liquor Control
Fire
Water Supply
(semi -autonomous)
County of Hawaii
Elected officials
June 30, 2018
Administrative Officers (Term: 2016-2020)
Harry Kim Mayor
Mitchell Roth Prosecuting Attorney
County Council (Term: 2016-2018)
Valerie Poindexter
Chair
Karen Eoff
Vice Chair
Aaron S.Y. Chung
Member
Maile "Medeiros" David
Member
Dru Mamo Kannuha
Member
Susan L. K. Leeloy
Member
Eileen O'Hara
Member
Herbert M. Richards, III
Member
Jennifer Ruggles
Member
Principal officials
June 30, 2018
County Clerk
Stewart Maeda
Legislative Auditor
Bonnie Nims
Managing Director
Wilfred okabc
Deputy Managing Director
Barbara Kossow
Corporation Counsel
Joseph Kamclamcla
Director of Finance
Deanna S ako
Planning Director
Michael Yee
Director of Personnel
William Brilhantc Jr.
Director of Research and Development
Diane Ley
Chief of Police
Paul Ferreira
Fire Chief
Darren Rosario
Director of Public Works
Allan Simeon
Director of Environmental Management
William Kucharski
Parks and Recreation Director
Roxcic Waltj cn
Managcr-Chicf Engineer, Department of Water Supply Keith Okamoto
Civil Defense Administrator Talmadge Magno
Director of Liquor Control Gerald Takase
Mass Transit Administrator Maria Aranguiz Rojas
Executive on Aging Christian Alameda
Administrator, office of Housing and
Community Development Neil Gyotoku
Director of Information Technology Julie Ung
This page intentionally left blank.
FINANCIAL SECTION
k .0iv,m
N&K CPAs, Inc.
ACCOUNTANTS I CONSULTANTS
INDEPENDENT AU DITORCS REPORT
To the Chair and Members of the County Council
County of Hawaii
Report on the Financial statements
AMERICAN SAVINGS BANK TOWER
1001 BISHOP STREET, SUITE 1700
HONOLULU, HAWAII 96813-3696
(808) 524-2255 F (808) 523-2090
We have audited the accompanying financial statements of the governmental activities, the
business -type activities, the discretely presented component unit, each major fund, and the
aggregate remaining fund information of the County of Hawaii, State of Hawaii (County), as of
and for the fiscal year ended June 30, 2018, and the related notes to the financial statements,
which collectively comprise the Countys basic financial statements as listed in the table of
contents.
Managementis 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 auditor
considers internal control relevant to the entityS 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 entitys internal control.
Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of significant accounting estimates made by
management, as well as evaluating the overall financial statement presentation of the financial
statements.
N&K CPAs, Inc.
ACCOUNTANTS I CONSULTANTS
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, the business -type activities, the
discretely presented component unit, each major fund, and the aggregate remaining fund
information of the County of Hawaii, State of Hawaii, as of June 30, 2018, and the respective
changes in financial position and, where applicable, cash flows thereof and the budgetary
comparison for the general fund for the fiscal year then ended in accordance with accounting
principles generally accepted in the United States of America.
Emphasis of Matter
Adoption of New Accounting Principle
As discussed in Note 1 to the financial statements, the County adopted new accounting guidance,
GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other
Than Pensions. Our opinion is not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
managements discussion and analysis (pages 16 through 26), schedule of changes in the net
OPEB liability and related ratios (page 106), schedule of contributions (OPEB) (pages 107
through 108), schedule of the CountyS and Departments proportionate share of the net pension
liability (ERS) (page 109), schedule of the employer pension contributions (ERS) (pages 110
through 111), and schedule of changes in total pension liability (page 112), 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 managements 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 CountyS basic financial statements. The introductory section, combining
and individual nonmajor fund financial statements and budgetary comparison schedules, and
N&K CPAs, Inc.
ACCOUNTANTS I CONSULTANTS
statistical section are presented for purposes of additional analysis and are not a required part of
the basic financial statements.
The combining and individual nonmajor fund financial statements and budgetary comparison
schedules are the responsibility of management and were derived from and relate directly to the
underlying accounting and other records used to prepare the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audit of the basic
financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the basic
financial statements or to the basic financial statements themselves, and other additional
procedures in accordance with auditing standards generally accepted in the United States of
America. In our opinion, the combining and individual nonmajor fund financial statements and
budgetary comparison schedules are fairly stated, in all material respects, in relation to the basic
financial statements as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures
applied in the audit of the basic financial statements, and accordingly, we do not express an
opinion or provide any assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
December 28, 2018, on our consideration of the Countys internal control over financial reporting
and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant
agreements and other matters. The purpose of that report is solely to describe the scope of our
testing of internal control over financial reporting and compliance and the results of that testing,
and not to provide an opinion on the effectiveness of the Countys 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 Countys internal control over financial
reporting and compliance.
Honolulu, Hawaii
December 28, 2018
1VIANAGEMENT'S DISCUSSION AND ANALYSIS
This section of the Countyof 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, 2018. We encourage readers to consider the information presented here in
con) unction with additional information that we have furnished in our letter of transmittal.
FINANCIAL HIGHLIGHTS
The assets of the Countyexceeded its liabilities at the end of the fiscal year by $141.7 million
(net position) . This amount includes a negative balance of $790.4 million in unrestricted net
position, a decrease of $319.7 million from the prior yrear, which is explained in the sections
below.
As of the close of the current fiscal year, the County's governmental funds reported combined
ending fund balances of $213.2 million, an increase of $51.7 million from the prior year.
Approximately 38 percent of this total amount, $81.4 million, is available for spending at the
County's discretion (unrestricted fund balance).
At the end of the current fiscal year, unrestricted fund balance for the general fund was $37.5
million, or 12 percent of total general fund expenditures.
OVERVIEW of THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the County's basic financial
statements. The County's basic financial statements comprise three components: (1)
Government -wide financial statements, (2) Fund financial statements, and (3) Notes to the basic
financial statements. This report also contains 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 Countyr 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-tme activities). The governmental activities of the County include
public safety, highways and streets, health, education and welfare, culture and recreation,
sanitation and general government. The business -type activities of the County include rental
housing for senior citizens and families.
Brim
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 Countycan 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 (I) 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 Countymaintains 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 Countyadopts an annual appropriated budget for its general fund and special revenue
funds. A budgetary comparison statement has been provided for these funds to demonstrate
compliance with this budget. The budgetary comparison statement for the general fund is
located in the basic financial statements, whereas the budgetary comparison schedules for
the nonmaj or special revenue funds are presented elsewhere in this report.
Proprietary funds. Proprietary funds are generally used to account for services for which
the Countycharges outside customers. Proprietary funds provide the same type of
information as' shown in the government -wide financial statements, only in more detail. The
Countymaintains only one type of proprietary funds, enterprise funds. Enterprise funds
are used to report the same functions presented as business -type activities in the government -
wide financial statements. The Countyuses enterprise funds to account for the operations of
the I�ulaimano Elderly Housing Pro) ect and the Gull Ekahi Affordable Housing Proi ect.
-17-
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
nonmaj or governmental funds and budgetary comparison schedules for the nonmaj or special
revenue funds are presented immediately following the required supplementary information.
GOVERNMENT -WIDE FINANCIAL ANALYSIS
Condensed Statement of Net Position
June 34, 2415 and 2417
Primary Government
Governmental Activities Business-tvpe Activities Total
2018 2017 2018 2017 2018 2017
Assets:
Current and other assets $ 298,905,875 $ 234,095,834 $ 1,182,749 $ 1,109,367 $ 300,088,624 $ 235,205,201
Capital assets, net 1,313,094,090 1,301,647,095 1,402,543 1,448,941 1,314,496,633 1,303,096,036
Total assets 1,611,999,965 1,535,742.929 2,585,292 2,558,308 1,614,585.257 1,538,301,237
Deferred Outflows
Of Resources: 225,708,726* 252,872,831 225,708,726 252,872,831
Total Assets and Deferred
Outflows of Resources 1,837,708,691 1.788,615,760 2,585,292 2,558,308 1,840,293,983 1,791,174,068
Liabilities:
Long-term liabilities
outstanding 1,621,452,640* 1,291,082,705 807,005 924,649 1,622,259,645 1,292,007,354
Other liabilities 58,373,270 48,825,301 64,257 86,844 58,437,527 48,912,145
Total liabilities 1,679,825,910 1,339,908,006 871,262 1,011,493 1,680,697,172 1,340,919,499
Deferred Inflows
Of Resources: 17,863,765 14,250,500 17,863,765 14,250,500
Total Liabilities and
Deferred Inflows
Of Resources 1,697,689,675 1,354,158,506 871,262 1,011,493 1,698,560,937 1,355,169,999
Net position:
Net investment 1n
capital assets
840,099,433
835,787,961 595,538 524,292
840,694,971
836,312,253
Restricted
91,458,455
70,439,580
91,458,455
70,439,580
Unrestricted
(791,538,872)*
(471,770,287) 1,118,492 1,022,523
(790,420,380)
(470,747,764)
Total net position
$ 140,019,016
$ 434,457,254 $ 1,714,030 $ 1,546,815
$141,733,046
$436,004,069
*See explanation on page 20.
!":2
Analysis of Net Position
As noted earlier, net position may serve over time as a useful indicator of a government's
financial position. Iii the case of the County, assets exceeded liabilities by $141.7 million at the
close of the most recent fiscal year.
By far the largest portion of the County's net position reflects its investment in capital assets
(e.g., land, buildings, infrastructure, and equipment) less any related debt used to acquire those
assets that is still outstanding. The Countyuses these capital assets to provide services to
citizens; consequently, these assets are not available for future spending. Although the County's
investment in its capital assets is reported net of related debt, it should be noted that the resources
needed to repay this debt must be provided from other sources, since the capital assets themselves
cannot be used to liquidate these liabilities.
An additional portion of the County's net position represents resources that are subject to external
restrictions on how they may be used.
At the end of the current fiscal year, the Countyr is able to report positive balances in two of its
three categories of net position, both for the government as a whole, as well as for its separate
governmental activities. All three categories of net position are positive for its business -type
activities.
The County's net position decreased by $294.3 million from the prior year, which was an
increase of $233.2 million (352%) from the decrease that was experienced last fiscal year. The
main reasons for the large decrease in the current year over last year's decrease was due to a
prior period adjustment of $274.0 million, which was the result of the County's implementation
of GASB Statement 751, Accounting and Financial Reporting for Postemployment Benefits other
Than Pensions. Under this new accounting standard the Countyr's financials at the government -
wide level now reflect their net liability, expense, deferred inflows and outflows relating to Other
Postemployrment benefits.
The County's net capital assets increased by $1 1.4 million (1 percent) due to the large amount of
capital improvement projects done by the Countyr 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 $330.3 million (26 percent) due
primarily to the issuance of $5.2 million State Revolving Fund (SRF) loans and $138.8 million in
bonds, which were offset by $131.5 in retirements of bonds, Bond Anticipation Notes and SRF
loans; a $3.7 million increase in the liability related to claims and judgments against the Countyr;
a $250.6 million increase in the Countyr's liability relating to the pre -funding of its
postemployrment benefits other than pensions; and a $5.2 million decrease in the County's net
pension liabilityr. See further discussion of the increase in long-term debt outstanding on page 25.
`Due to the implementation of GASB 75, a prior period adjustment to governmental
activities of $274,026,503 is reflected in June 2018. The restated beginning balance for
fiscal year 2018 is $160,430,751 for governmental activities. See Dote I for details.
Analysis of Changes in Net Position
Governmental activities. Governmental activities, including the impact of the prior period
restatement for GASB 751, decreased the County's net position by $294.4 million or basically all
of the total decrease in net position of the County.
The primary reasons for the $59.1 million (13.5 percent) increase in total revenues was due to
property taxes increasing by approximately $35.4 million, which was due to increases in the value
of net taxable real propertyr, of which the most notable was a $521.5 million increase in the
homeowners class that represented an S percent increase from the prior year, and then followed
by a $494.9 million increase in the residential classes (6 percent increase). Capital grants and
contributions also increased by approximately $16.7 million, which related to increases in
highways and streets projects ($18.7 million) .
Total expenses increased by $18.3 million, which represented a 4 percent change from the prior
year. There were the typical increases in salaries and wages and related employment benefit costs
across all functions in the current fiscal year.
-20-
Condensed Statements of Activities
For the
Fiscal Years
Ended June
30, 2015 and
2017
Primary Government
Governmental Activities
Business -type Activities
Total
2018
2017
2018
2017
2018
2017
Revenues:
Program revenues:
Charges for services
$ 50,576,723
$ 49,289,344
$ 503,597
$ 469,082
$ 51,080,320
$ 49,758.426
Operating grants and contributions
57,600,066
52,897,945
224,921
132,435
57,600,066
53,030,380
Capital grants and contributions
31,530,719
14,784,692
-
31,530,719
14,784,692
General revenues:
Property taxes
304,294,883
268,869,322
304,294,883
268,869,322
Other taxes
29,285,662
24,662,766
29,285,662
24,662,766
Grants and contributions, unrestricted
19,678,289
19,810,090
-
19,678,289
19,810,090
Investment earnings
1,841,356
661,184
5,561
1,243
1,846,917
662,427
Other
2,339,248
7,092,071
-
2,339,248
7,092,071
Total revenues
497,146,946
438,067,414
734,079
602,760
497,881,025
438,670,174
Expenses:
General government
75,740,262
72,836,020
75,740,262
72,836,020
Public safety
245,139,168
229,507,091
245,139,168
229,507,091
Highways and streets
54,728,332
51,368,841
-
54,728,332
51,368,841
Health, education and welfare
35,597,718
40,299,077
566,864
573,854
36,164,582
40,872,931
Culture and recreation
35,834,512
35,213,973
-
35,834,512
35,213,973
Sanitation
55,025,011
56,605,864
55,025,011
56,605,864
Interest on long-term debt
15,493,678
13,385,794
15,493,678
13,385,794
Total expenses
517,558,681
499,216,660
566,864
573,854
518,125,545
499,790,514
Increase (Decrease) in net position
(20,411,735)
(61,149,246)
167,215
28,906
(20,244,520)
(61,120,340)
Net position at beginning of year
434,457,254
495,606,500
1,546,815
1,517,909
436,004,069
497,124,409
Prior period adjustment
(274,026,503)
-
-
-
(274,026,503)
-
Net position at beginning of year,
as restated
160,430,751 *
495,606,500
1,546,815
1,517,909
161,977,566
497,124,409
Net position at end of year
$ 140,019,016
$ 434,457,254
$ 1,714,030
$ 1,546,815
$ 141,733,046
$ 436,004,069
`Due to the implementation of GASB 75, a prior period adjustment to governmental
activities of $274,026,503 is reflected in June 2018. The restated beginning balance for
fiscal year 2018 is $160,430,751 for governmental activities. See Dote I for details.
Analysis of Changes in Net Position
Governmental activities. Governmental activities, including the impact of the prior period
restatement for GASB 751, decreased the County's net position by $294.4 million or basically all
of the total decrease in net position of the County.
The primary reasons for the $59.1 million (13.5 percent) increase in total revenues was due to
property taxes increasing by approximately $35.4 million, which was due to increases in the value
of net taxable real propertyr, of which the most notable was a $521.5 million increase in the
homeowners class that represented an S percent increase from the prior year, and then followed
by a $494.9 million increase in the residential classes (6 percent increase). Capital grants and
contributions also increased by approximately $16.7 million, which related to increases in
highways and streets projects ($18.7 million) .
Total expenses increased by $18.3 million, which represented a 4 percent change from the prior
year. There were the typical increases in salaries and wages and related employment benefit costs
across all functions in the current fiscal year.
-20-
The charts below illustrate the County's governmental expenses and revenues by function, and its
revenues by source. As shown, public safety is the largest function in expense (47 percent),
followed by general government (15 percent) and sanitation (11 percent). General revenues such
as property and other taxes are not shown by program, but are effectively used to support
program activities countywide. For governmental activities overall, without regard to programs,
property taxes are the largest single source of funds (61 percent), followed by operating grants
and contributions (12 percent) and charges for services (10 percent).
Expenses and Program Revenues — Governmental Activities
Year Ended June 30, 2018
69e,gZ9 r
r
0Y!3Gds $ sW8a6oid
IOU 01 PG1391se.,
auL3 suc!11ri quo,
sI uL3./E)
Revenue by Source — Governmental Activities
Year Ended June 30, 2018
Investment earnings,
$1,841,356
Property taxes,
304,294,883.
Other, $2,339,248
-21-
i Y•�• Ly
r •
I J •�_' J�JC. � itt�i
Charges for services,
$50,576,723
Operating grants and
contributions,
$57,600,066
Capital grants and
contributions,
$31,530,719
Business -type activities. Business -type activities increased the County's net position by
$167,215 versus an increase of $25,906 in the prior year. Expenses for health, education and
welfare account for all of the $566,564 of expenses which represents a 1 percent decrease from
the prior year. Charges for services were $503,597 and investment earnings were $5,561, which
were comparable to the prior year. Operating grants and contributions increased by $92,456 (70
percent) to $224,921 as a result of the County executing a new rent subsidy contract with the US
Department of Housing and Urban Development.
FINANCIAL ANALYSIS OF THE COUNTY'S FUNDS
As noted earlier, the Countyr uses fund accounting to ensure and demonstrate compliance with
finance -related legal requirements.
Govemmental 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 $213.2 million, an increase of $51.7 million (32 percent) in comparison
with prior year. Approximately 35 percent of this total amount ($51.4 million) constitutes
unrestricted fund balance. The unrestricted portion of the fund balance is comprised of (1) $55.4
million in committed fund balance, (2) $22.9 million in assigned fund balance, and (3) $3.1
million in unassigned fund balance. The remainder of the fund balance is divided between $6.7
million in nonspendable fund balance for inventory and $125.1 million in restricted fund balance.
Approximately 55 percent of the total restricted fund balance is due to restrictions relating to
highways, streets and abandoned vehicles ($35.2 million) and debt service ($33.4 million).
The general fund is the chief operating fund of the Countyr. At the end of the current fiscal year,
unrestricted fund balance of the general fund was $37.5 million, while total fund balance
increased to $61.0 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 12 percent of total general fund expenditures, while total
fund balance represents 20 percent of that same amount.
The fund balance of the County's general fund increased by $13.3 million during the current
fiscal year as compared to a decrease of $6.1 million in the prior year. Ivey factors in this
increase ($19.4 million) over last year's decrease are as follows:
• A positive increase of $35.2 million (13 percent) in real property tax revenues and $4.3
million �5 percent) in intergovernmental revenues. As explained previously, the increase in
real property tax revenues is due to a slight increase in the value of net taxable real property
as evidenced in the accompanying statistical tables.
The positive impact of the increase in revenues was offset by increases of $15.0 million (5
percent) in expenditures and of $6.1 million in transfers out to other governmental funds.
$5.3 million of the total increase in expenditures is due to increases in salaries and wages
from the prior year and $9.5 million in associated employee benefits.
The fund balance of the County's capital projects fund increased by $26.5 million (55 percent)
during the current fiscal year. The decrease is primarily due to the fact that the $35.5 million of
IFIRIa
expenditures for various construction projects were only partially offset by the issuance of $8.2
million in SRF loans and $47.3 million in new bonds.
The debt service funds consist of the Bond Redemption Fund and the Interest Fund. These funds
have combined total fund balances of $33.4 million, all of which is restricted for the payment of
debt service. The net increase in the combined fund balances during the current year in the debt
service funds was $6.6 million (28 percent).
Proprietary funds. The County's proprietary funds provide the same type of information found
in the government -wide financial statements, but in more detail.
Unrestricted net position of the Kulaimano Elderly Housing Project (Kulaimano) at the end of the
year amounted to $897,130, and $821,362 for the ouli Ekahi Affordable Housing Project (ouli
Ekahi). The total net position for Kulaimano increased by $49,420 and the net position for ouli
Ekahi increased by $117,798. 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 $9.8 million increase in appropriations, the most significant reasons were due to increases in
the appropriations for public safety ($4.0 million) and capital outlays ($6.4 million).
Differences between the final budget and the actual (budgetary basis) resulted in approximately
$4.8 million less revenues than expected and $30.8 million less expenditures than appropriated.
This is primarily due to the following factors:
The negative variance of $4.8 million in revenues is comprised mostly of $4.0 million from
real property and public service company taxes. Public service company taxes was lower
than budget by $2.7 million due to the decline in the cost of fuel that was passed on to the
consumers.
$8.8 million of the unspent appropriations is related to salaries and wages and the various
countywide expenditure accounts relating to salaries and wages. The variance is due
primarily to unfilled vacancies and continued efforts by each department to control payroll
costs during the budget year due to the tough economic conditions facing the County. The
following functions are responsible for the majority of the variance: public safety ($2.8
million) and general government ($1.7 million).
• $3.1 million is due to lower than anticipated payments needing to be made in retirement
related payments. With each department increasing efforts to control costs, overtime was
also closely monitored and the corresponding pension expenditures were not incurred.
• $2.4 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, 2018 amounts to $1.3 billion (net of accumulated depreciation). This
investment in capital assets includes land and improvements, buildings and improvements,
equipment, easements, and infrastructure assets, which consists of primarily roads and bridges.
The total increase in the County's investment in capital assets for the current fiscal year was 1
percent.
I+All
Major capital asset events during the current fiscal year included the following:
Construction continued on the Mass Transit agency baseyrard and maintenance facility;
construction in progress as of the end of the current fiscal year had reached $ 1 1.4 million
with $1.6 million coining from the current fiscal year; project was transferred to Buildings.
Construction continued on the Haihai Fire Station; construction in progress as of the end of
the current fiscal year had reached $10.6 million with $1.4 million coining from the current
fiscal year; project was transferred to Buildings.
Construction continued on the Pana' ewa Drag Strip; construction in progress as of the end of
the current fiscal year had reached $5.0 million; project was transferred to Buildings.
Construction continued on the Hawa"nCountyTRadio System Upgrade project; construction in
progress as of the current fiscal year had reached $10.7 million with $1.4 million coining
from the current fiscal year.
• Construction continued on the Eukuihaele Park Improvements; construction in progress as of
the current fiscal year had reached $5.4 million with $1.5 million coining from the current
fiscal year; project was transferred to Buildings.
Construction continued on the Mauna Ilea Recreation Area Improvements; construction in
progress as of the Current fiscal year had reached $10.5 million; project was transferred to
Buildings.
• Construction continued on the Kawailani Street Improvements ('Iwalani to Pohakulani);
construction in progress as of the end of the current fiscal year had reached $ 10.2 million
with $7.0 million coming from the current fiscal year.
• Construction continued on the Hakalau Stream Bridge North Abutment Foundation Repair;
construction in progress as of the end of the current fiscal year had reached $1.7 million with
$1.5 million coming from the current fiscal year.
• Construction began on the Kealakehe Metal Salvage FacilityRemediation and Closure
project with current year expenditures reaching $2.2 million.
• Construction began on the Kealakehe Wastewater Treatment Plant R-1 Upgrade project;
construction in progress as of the current fiscal year had reached $1.8 million.
$15.9 million of dedicated roads were received by the County in the current fiscal year.
Ca p i to l Assets
(net of depreciation)
June 30, 2018 and 2017
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 $407.4 million and State
Revolving Fund loans of $36.6 million. At the end of the current fiscal year, the County had total
bonded debt outstanding of $407.4 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 $68.9 million (20 percent) during the current fiscal
year due to the issuance of $138.8 million in bonds which were offset by the retirement of $69.9
of bonds.
At the end of the fiscal year, the County held an "AA+" rating from Fitch and an "Aa2" rating
from Moody's for general obligation debt.
State statutes limit the amount of general obligation debt the County may issue up to 16 percent
of the total assessed value of all county real property as established for tax purposes on the last
tax assessment rolls. The current debt limitation for the County is $4.6 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 approximately 3.0
percent, which is the same percentage as the end of the prior fiscal year, and a 1.0 percent
decline from two years ago and an even larger decline from the high of 11.0 percent in
2011.
• The number of domestic and international visitors to the County for the current fiscal
year was approximately 1.83 million, with an approximately II percent increase from the
previous year's count of 1.66 million.
These factors were considered in preparing the County's budget for the 2019 fiscal year.
Primary Government
Governmental Activities
Business -type Activities
Total
2018
2017
2018
2017
2018
2017
Land and improvements
$ 256,390,951
$ 239,187,891
$ 753,877
$ 753,877
$ 257,144,828
$ 239,941,768
Infrastructure assets
309,295,827
328,917,985
309,295,827
328,917,985
Ground and site improvements
53,546
57,893
53,546
57,893
Buildings and improvements
631,727,813
597,987,986
574,454
610,498
632,302,267
598,598,484
Easements
6.169,006
4,244,255
6,169,006
4,244,255
Equipment
58,918,798
60,190,776
20,666
26,673
58,939,464
60,217,449
Construction work in progress
50,591,695
71,118,202
50,591,695
71,118,202
Total
$1,313,094,090
$1,301,647,095
$ 1,402,543
$ 1,448,941
$1,314,496,633
$1,303,096,036
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 $407.4 million and State
Revolving Fund loans of $36.6 million. At the end of the current fiscal year, the County had total
bonded debt outstanding of $407.4 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 $68.9 million (20 percent) during the current fiscal
year due to the issuance of $138.8 million in bonds which were offset by the retirement of $69.9
of bonds.
At the end of the fiscal year, the County held an "AA+" rating from Fitch and an "Aa2" rating
from Moody's for general obligation debt.
State statutes limit the amount of general obligation debt the County may issue up to 16 percent
of the total assessed value of all county real property as established for tax purposes on the last
tax assessment rolls. The current debt limitation for the County is $4.6 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 approximately 3.0
percent, which is the same percentage as the end of the prior fiscal year, and a 1.0 percent
decline from two years ago and an even larger decline from the high of 11.0 percent in
2011.
• The number of domestic and international visitors to the County for the current fiscal
year was approximately 1.83 million, with an approximately II percent increase from the
previous year's count of 1.66 million.
These factors were considered in preparing the County's budget for the 2019 fiscal year.
At the end of the current fiscal year, unrestricted fund balance in the general fund was $37.6
million. The County has appropriated $16.3 million of this amount for spending in the 2019
fiscal year budget and the majority is included in the assigned portion of the fund balance.
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the County's finances for all
those with an interest in the government's finances. Questions concerning any of the information
provided in this report or requests for additional information should be addressed to the Director
of Finance, County of Hawaii, 26 Aupuni Street, Suite 2103, Hilo, Hawaii 96720.
BASIC FINANCIAL STATEMENT
COUNTY OF HAWAII
Statement of Net Position
June 30, 2018
Assets
Current assets:
Cash and cash equivalents (notes 3 and 14)
Restricted cash and cash equivalents (note 3)
Investments (note 3)
Restricted investments (note 3)
Receivables, net (note 4)
Receivable from improvement district
(notes 4 and 10)
Internal balances (note 5)
Inventories
Prepaid expenses
Other
Total current assets
Investments (note 3)
Restricted investments (note 3)
Restricted cash and cash equivalents (note 3 and 14)
Receivable from improvement district, excluding
current portion (notes 4 and 10)
Capital assets (notes 6, 8 and 14):
Utility plant in service, net
Infrastructure assets, net
Ground and site improvements, net
Buildings and improvements, net
Equipment, net
Easements, net
Preliminary survey and investigation charges
Land and improvements
Construction work ill progress
Total capital assets, net
Total noncurrent assets
Total assets
Deferred Outflows of Resources
Deferred loss on refunding
Deferred outflow related to pensions and other
post employment benefits (notes 13 and 14)
Total deferred outflows of resources
Total Assets and Deferred Outflows of Resources
Primary Government
Governmental Business -type Component
Activities Activities Total Unit
$ 86,709,229 $ 1,663,423 $ 87,772,652 $ 28,285,759
62,223,556
42,197 62,265,753 -
6,404,796
6,404,796 5,000,000
38,500,000
38,500,000
66,725,468
5,302 66,730,770 8,018,309
103,379
103,379
2,700
(2,700) -
6,714,871
6,714,871 1,498,341
160,017
1,868 161,885 78,692
1,778,188
- 1,778,188
269,322,204
1,110,090 270,432,294 42,881,101
11,194,244 11,194,244 20,000,000
16,394,560 - 16,394,560
- 72,659 72,659 888,225
1,994,867 1,994,867 -
256,128,991
309,295,827
309,295,827
53,546 53,546
631,727,813
574,454 632,302,267
58,918, 798
20,666 58, 939, 464
6,169,006
6,169,006
6,792,484 6,792,484
218,916,242 218,916,242 10,143,200
225,708,726 225,708,726 10,143,200
1.837.708.691 2,585,292 1,840,293,983 376,975,517
(Continued)
-28-
5,840,355
256,390,951
753,877
257,144,828
5,194,398
50,591,695
50,591,695
35,899,247
1,313,094,090
1,402,543
1,314,496,633
303,062,991
1.342.677.761
1,475,202
1,344,152,963
323,951,216
1,611,999,965
2,585,292
1,614,585,257
366,832,317
6,792,484 6,792,484
218,916,242 218,916,242 10,143,200
225,708,726 225,708,726 10,143,200
1.837.708.691 2,585,292 1,840,293,983 376,975,517
(Continued)
-28-
COUNTY OF HAWAII
Statement of Net Position
June 36, 2618
Liabilities
Current liabilities:
Accounts payable and accrued liabilities
Accrued payroll
Advance collections - intergovernmental
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)
Unearned revenue, noncurrent
Customers' deposits
Net pension liability (notes 13 and 14)
Net OPEB liability (notes 13 and 14)
Other
Total noncurrent liabilities
Total liabilities
Deferred Inflows of Resources
Deferred inflows related to pensions and other
post employment benefits (notes 13 and 14)
Deferred inflows - other
Total Deterred Inflows of Resources
Total Liabilities and Deferred
Inflows of Resources
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.
432,012 432,012
185,800
19,733,901 19,733,901
112,921,982 156,152 113,078,134 11,373,093
474,752,825
715,110 475,467,935
69,382,818
(Concluded)
Primary Government
1,132,737
14,573,550
Governmental
Business -type
5,648,959
Component
Activities
Activities
Total
Unit
$ 141,733,046 $227,791,263
1,583,953
$ 21,989,589
$ 52,837 $
22,042,426
$ 3.224,460
11,076,958
391,454,300
11,076,958
1,458,734
4.424,115
1,417
4,425,532
1,566,903,928
6,448,707
10,003
6,458,710
652,468
32,638,132
91,895
32,730.027
5,140.705
10,153,091
10,153,091
557,915
3,561,859
3,561,859
153,011
2,463,618
2,463,618
432,012 432,012
185,800
19,733,901 19,733,901
112,921,982 156,152 113,078,134 11,373,093
474,752,825
715,110 475,467,935
69,382,818
30,983,888
30,983,888
1,132,737
14,573,550
14,573,550
530,989
5,648,959
5,648,959
1,690,566
29,574,988
29,574,988
$ 140,019,016 $ 1,714,030
$ 141,733,046 $227,791,263
1,583,953
17,388,172
610,992,171
610,992,171
28,365,453
391,454,300
391,454,300
17,265,728
8,923,247
8,923,247
1,566,903,928
715,110 1,567,619,038
135,649,850
1,679,825,910
871,262 1,680,697,172
147.022,943
14,532,816 14,532,816 2,070,443
3,330,949 3,330,949 90,868
17.863,765 17,863,765 2,161,311
1,697,689,675 871,262 1,698,560,937 149,184,254
840,099,433 595,538
840,694,971 229,427,693
28,425.316
28,425,316
33,396,481
33,396,481
11,614,647
11,614,647
16,331,445
16,331,445
1,690,566 -
1,690,566
(791,538,872) 17118,492
(790,420,380) (1,636,430)
$ 140,019,016 $ 1,714,030
$ 141,733,046 $227,791,263
_29_
COUNTY OF H AWAI I
Statement of Activities
For the Fiscal Year Ended June 30, 2018
Program Revenues
Total governmental activities 51715581681 5015761723 5716001066 3115301719
Business -type activities:
Health, education and welfare 5661864 5031597 2241921
Total primary government $ 518,125,545 $ 51,080,320 $ 57,8241987 $ 31,530,719
Component unit:
Water (note 14) $ 59,844,010 $ 45,705,966 $ 8,122,713
General revenues:
Taxes:
Property taxes, levied for general purposes
Public service company taxes
Public utility franchise taxes
Fuel taxes
Grants and contributions not restricted to specific programs
Investment earnings
Other
Total general revenues
Change in net position
Net position, beginning of year, as previously stated
Prior period adjustment
Net position, beginning of year, as restated
Net position, end of year
Sec accompanying notes to the basic financial statements.
Operating
Capital
Charges for
Grants and
Grants and
Functions/Programs
Expenses
Services
Contributions
Contributions
Primary government:
Governmental activities:
General government
$ 75,740,262
$ 21334,119
$ 117371845
$ 41227,452
Public safety
24511391168
611141204
2717721575
3031928
Highways and streets
5417281332
17.2951316
318121932
2415311210
Health, education and welfare
3515971718
9231654
2319771299
Culture and recreation
3518341512
119991177
711813
214681129
Sanitation
5510251011
2119101253
2271602
Interest on long-term debt
1514931678
Total governmental activities 51715581681 5015761723 5716001066 3115301719
Business -type activities:
Health, education and welfare 5661864 5031597 2241921
Total primary government $ 518,125,545 $ 51,080,320 $ 57,8241987 $ 31,530,719
Component unit:
Water (note 14) $ 59,844,010 $ 45,705,966 $ 8,122,713
General revenues:
Taxes:
Property taxes, levied for general purposes
Public service company taxes
Public utility franchise taxes
Fuel taxes
Grants and contributions not restricted to specific programs
Investment earnings
Other
Total general revenues
Change in net position
Net position, beginning of year, as previously stated
Prior period adjustment
Net position, beginning of year, as restated
Net position, end of year
Sec accompanying notes to the basic financial statements.
Net (Expense) Revenue alid Chaxlges 1n Net Position
Primary Government
Governmental Business -type Component
Activities Activities Total Untt
$ (67,440,846) $
$ (67,440,846) $
(210,948,461)
(210,948,461)
(9,088,874)
(9,088,874)
(10,696,765)
(10,696,765)
(31,295,393)
(31,295,393)
(32,887.156)
(32.887,156)
(15,493,678)
(15.493,678)
(377,851,173) (377,851,173)
161,654 161,654
(377,851,173) 161,654 (377.689.519)
(6,015.331)
304,294,883 304,294,883
7,611,856 7,611,856
8,331,390
8,331,390
13, 342,416
13, 342,416
19,678,289
19,678,289
1,841,356
5,561 1,846,917 611,109
2,339,248
2,339,248
357,439,438 5,561 357,444,999 611,109
(20,411,735)
167,215
(20,244,520)
(5,404,222)
434,457,254
1,546,815
436.004.069
248,898,228
(274,026,503)
(274.026.503
(15,702,743)
160,430,751
1,546,815
161,977,566
233,195,485
140,019.016 $
1.714,030
$141,733,046 $
227,791,263
31
Assets
Cash and cash equivalents (note 3)
Investments (note 3)
Receivables, net (note 4)
Due from other governmental funds (note 5)
Due from other nongovernmental funds (note 5)
Receivables from other governments (note 4)
Inventories
Other
Total assets
Liabilities, Deferred Inflows and Fund Balances
Liabilities:
Accounts payable
Accrued payroll
Due to other governmental funds (note 5)
Advance collections -intergovernmental
Other
Total liabilities
Deferred Inflows of Resources:
Unavailable revenue (note 7)
Fund balances:
N onspe nda ble : Inventory
Restricted for:
Debt service (note 10)
Highways, streets and abandoned vehicles
Public access open space
Other
Committed to:
Budget stabilization
Disaster and emergencies
Lower Puna area
Rental assistance and subsidy
Sanitation
Self insurance
Highways, streets and abandoned vehicles
Parks and recreational projects
Zoning change impact mitigation (fair share)
Other
Assigned to:
Subsequent year's budget
Other
Unassigned
Total fund balances
Total liabilities, deferred inflows, and fund balances
See accompanying notes to the basic financial statements.
COUNTY OF HAWAII
Governmental Funds
Balance Sheet
June 30, 2018
Bond Other Total
Capital Redemption Governmental Governmental
General Projects Fund Funds Funds
$ 40, 721,256
$ 54,940,124
$ 120,158 $ 53,151,247
$148,932,785
17,539,075
27,394,561
27,500,000 59,964
7249300
25,412,958
$ 5,317,636
2,943,320
28,356,278
2,088,197
694,290
3,204, 372 725, 322
6, 712,181
3,606,420
2,447,729
2, 700
2, 700
26, 668, 385
7, 954, 660
3, 746,145
38, 369,190
6, 714,871
374,050
14,433,901
6, 714,871
877,894
790,666
269,645
1,938,205
0
0 $ 30,824,530
60.898.34343
33596481
2355807
11,614,647
$ 5,895,620
$ 10,776,333 $
$ 5,317,636
$ 21,989,589
907517
469, 264
1409441
11,076,958
658,032
3,606,420
2,447,729
6,712,181
470,069
3,773,627 -
180419
4,424,115
13, 547,368
327483 185,000
374,050
14,433,901
30.2 38.606 18.483.863 185.000 9.729.2 75 58.636.744
28.743.906 2,968.375 31,712,281
6, 714,871 6, 714,871
- 30,639,530
2,756,951
33596481
2355807
11,614,647
35,173,334
16, 331, 445
-
16, 331,445
469, 264
38, 484, 776
1, 221, 302
40,175, 342
6,535,007
6,535,007
6,039,632
6,039,632
4,272,183
4,272,183
1,135446
1,135446
-
17,113, 714
17,113, 714
1, 314,948
-
1, 314,948
-
1,091,766
9,891,854
10,983,620
1,922, 760
88542
2,011, 302
-
3, 992,164
-
3, 992,164
643,919
1,200,966
141,909
1,986,794
15,330,000
-
15,330,000
4546560
3,039,319
7,585,879
3,114,478
-
(35,855)
3,078,623
61.040,124
73.290,438 30,639,530
48,200.693
213,170.785
$ 120,02,636
0 0
4k
$303,51
01§1 kJ M r'&0»:FAA
►�►I:� I
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position
June 30, 2018
Total fund balances - governmental funds $ 21351705785
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
256,390,951
Infrastructure assets, net
309,295,827
Buildings and improvements, net
631,727,813
Equipment, net
58,918,798
Easements, net
6,169,006
Construction work in progress
50,591,695
Total capital assets, net
1,313,094,090
Deferred amounts on refunding and pension are reported as deferred
outflows of resources in the government -wide financial statements but are not
are not reported in the governmental fund statements 225,708,726
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) 28,381,332
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
(505,292,711)
Interest due on long-term debt
(6,448,707)
Capital leases
(8,112,577)
Compensated absences
(41,136,979)
Claims and judgments
(18,135,409)
Landfill costs payable
(30,007,000)
Pollution remediation
(13,144,259)
Other Postemployment Benefit Obligation (OPEB)
(391,454,300)
Net pension obligation
(610,992,171)
Total long-term liabilities
(1,624,724,113)
Unamortized gain on refunding (1,078,988)
Deferred amounts related to pension are reported as deferred
inflows of resources in the government -wide financial statements but are not
are not reported in the governmental fund statements (14,532,816)
Net position of governmental activities $ 14050195016
See accompanying notes to the basic financial statements.
COUNTY OF HAWAII
Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances
Revenues
Property taxes
Public service company taxes
Fuel taxes
Public utility franchise taxes
Licenses and permits
Intergovernmental
Charges for services
Investment earnings
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 postemployment benefits
Other
Debt service:
Principal
Interest
Capital outlay
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
For the Fiscal Year Ended June 30, 2018
Bond Other Tota l
Capital Redemption Governmental Governmental
General Proiects Fund Funds Funds
301,699,073
$
4115701385
301,699,073
716111856
13717181124
316331816
716111856
2114001633
910041192
1313421416
1313421416
2011811802
111421159
813311390
813311390
910921824
-
1419731014
2410651838
5715881179
910691719
2313661837
9010241735
319941394
-
1915591157
2315531551
119481643
(360,015)
21977
115911605
213241765
7411212
117651833
418311810
384,259,734
9,450,916
8113411624
47510521274
4111591034
4111351
4115701385
12910351320
816821804
13717181124
316331816
1717661817
2114001633
910041192
2018721175
2918761367
2011811802
111421159
2113231961
111171456
3812341826
3913521282
4315711004
519221960
4914931964
3113251437
214761692
3318021129
1418311000
-
1418311000
215411841
210801379
416221220
114631487 5918001000
2418431933 7981763 8619061183
791762
1716591128 1717381890
614381193 35,485,554
41,923,747
304,382,344 95,285,554
2418431933 116.048.054 54015591885
7918771390 (85,834,638) (2418431933) (34.706.4301 (65,507.611)
(Continued)
COUNTY OF HAWAII
Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Fiscal Year Ended Jude 30, 2018
(Concluded)
Bond Other Total
Capital Redemption Governmental Governmental
General Projects Fund Funds Funds
Other Financing Sources (Uses)
Sale of assets
22,609
-
22,609
Increase in capital leases (dotes 8 and 10)
1,207,210
-
2,602,039
3,809,249
State Revolving Fund loads (dote 10)
5,153,664
5,153,664
Issuance of bonds (note 10)
107,115,889
107,115,889
Premium on bonds (note 10)
5,998,387
-
5,998,387
Refunding bonds (note 10)
48,783,779
48,783,779
Payment to refunded bond escrow
agent (note 10)
(54,536,62])
(54,536,621)
Bond issuance costs
(245,545)
(30,812)
-
(276,357)
Transfers in (note 5)
3,579,433
31,277,760
40,853,366
75,710,559
Transfers out (note 5)
(68,967,481)
(3,204,372)
-
(3,538,706)
(75,710,559)
Total other financing sources (uses)
(67,737,662)
112,613,802
31,277,760
39,916,699
116,070,599
Net change in fund balances
12,139,728
26,779,164
6,433,827
5,210,269
50,562,988
Fund balances at beg-llui ng of year
47,746,958
46,511,274
24,205,703
42,990,424
161,454,359
Increase 1n reserve for inventories
1,153,438
-
-
1,153,438
Fund balances at enol of year
$ 61.040.124
$ 73.290.438
30,639,530
548.200.693
$ 213.170.785
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, 2018
Net change in fund balances - total governmental funds
Amounts reported for governmental activities in the statement of activities are
different because:
Capital outlays are reported as expenditures in governmental funds.
However, in the statement of activities, the cost of capital assets is
allocated over their estimated useful lives as depreciation expense. In
the current period, these amounts are:
50,562,988
Capital outlay 40,102,867
Dedicated and contributed property 19,118,455
Depreciation expense and loss on disposals (47,774,327)
Excess of capital outlay over depreciation expense 11,446,995
Borrowings provide current financial resources to governmental funds;
however, issuing debt increases long-term liabilities in the statement
of net position. In the current period, assets financed through:
General obligation bonds, net of refunding
(83,967,691)
Premium on bond issuance
(23,548,501)
Gain on issuance of debt refunding
(1,130,368)
Deferred amount on refunding of bonds
850,901
State Revolving Fund loans
(5,153,664)
Capital leases
(3,809,249)
Total debt proceeds (116,758,572)
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 principal retirement 22,712,859
Bond anticipation notes 59,800,000
State Revolving Fund loan repayments/forgiveness 2,131,072
Capital lease payments 2,262,252
Total long-term debt repayment 86,906,183
Because some revenues will not be collected for several months after the
County's fiscal year end, they are not considered "available" revenues and
are "deferred" in the governmental funds. Unearned revenues increased by
this amount this year. 2!)826!)227
(Continued)
X6161 M a, Wel 0: MAI WMOM I I
Reconciliation of the Change in Fund Balances of Governmental Funds
to the Statement of Activities
For the Fiscal Year Ended June 30, 2018
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 compensated absences
Increase in claims and judgments
Increase in landfill closurelpostclosure care costs
Decrease in pollution remediation costs
Amortization of premium from bond issuance
Amortization of deferred loss on refunding
Amortization of gain on refunding
Net increase in accrued interest
Net increase to expenses related to Other Postemployment
Benefit Obligation
Net increase to expenses related to pension and salaries and wages
Net additional expenses
Change in net position of governmental activities
See accompanying notes to the basic financial statements.
1,153,438
(1,651,077)
(3,699,716)
(484,000)
2,398,380
4,541,980
(1,503,269)
51,380
(844,879)
(4,491,561)
(50,866,232)
(Concluded)
(55395,556)
20,411,735}
14WIN aMrWel 0:/:Ik,MOSII
General Fund
Statemenbf Revenues, Expenditures, and Changes in Fund Balarice -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended Jude 30, 2018
Revenues:
Taxes alld assessments:
Property taxes
Public service c ompaily taxes
Total taxes alld as s e s smeilts
Licenses aild permits:
Noilbusilles s licenses aild permits
Business licenses
Street use
Total licenses and permits
Intergovernmental:
Federal:
Programs for the aged
Community development block grants
Lau enforcement
Other
Total federal
State:
State General Fund - Act 185,
SLH 1990
Emergency medical services
O the r
Total State
Total nitergoveri=eiltal revenue
Charges for services:
General government
Culture and recreation
Highways alld streets
Public safety
Total charges for services
Fines alid forfeitures
Rents
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
$ 302,909,761
302,932,261
$ 301,699,073
$ (1,233,188)
10,340,000
10,340,000
7,611,856
(2,728,144)
313,249,761
313,272,261
309,310,929
(3,961,332)
3,762,795 3,762,795 3,873,376 110,581
2,138,898 2,138,898 2,036,903 (101,995)
3,035,000 3,035,000 3,182,545 147,545
8,936,693 8,936,693 9,092,824 156,131
2,311,681
2,336,681
1,574,612
(762,069)
16,536,274
2 452 417
2 452 417
--
3,380,300
3,752,330
1,437,952
(2,314,378)
2,731,636
7,114,493
8,689,814
1,575,321
8,423,617
15,655,921
14,154,795
(1,501,126)
17,298,000
17,298,000
19,158,000
1,860,000
16,536,274
17,099,710
17,099,710
--
5,879,039
6,708,893
7,715,363
1,006,470
39,713,313
41,106,603
43,973,073
2,866.470
48,136,930
56,762,524
58,127,868
1,365,344
4,972,229
4,972,229
4,287,124
(685,105)
1,749,400
1,749,400
1,346,267
(403,133)
1,263,000
1,263,000
1,117,241
(145,759)
111,368
111,368
129,259
17,891
8,095,997
8,095,997
6,879,891
(1,216,106)
1,804,500
2,329,500
1,183,991
(1,145,509)
207,500
207,500
219,042
11,542
(Continued)
COUNTY OF HAWAII
General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
Revenues (continued):
Interest and penalties
I'vIiscellaneous
Total revenues
Expenditures:
Current:
General government:
Finance
General government building
Legislative
Automotive equipment
Lau
Research and development
Plaiuini ig and Z oning
Mayors office
Engineering
Information technology
Human resources
Public worlds administration
Elections
Legislative auditor
Total general government
Public safety:
Police department
Fire department
Pros ecuting attorney
Protective inspection
Liquor control
Flood control
Civil defense agency
Animal control
Total public safety
Highways and streets:
I'v ass transit
For the Fiscal Year Ended Jude 30, 2018
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
608,000 608,000 1,556,446 948,446
5,081,433 5,248,425 4,624,642 (623,783)
386,120,814 395,460,900 390,995,633 (4,465,267)
12,214,259
12,757,823
11,165,113
1,592,710
5,433,935
5,772,435
5,395,195
377,240
4,159,151
3,490,101
3,302,628
187,473
4,783,107
4,426,607
4,266,883
159,724
2,782,278
2,793,008
2,596,848
196,160
2,870,836
3,111,222
3,020,655
90,567
4,027,964
4,121,349
3,926,726
194,623
1,518,450
1,622,522
P
129,546
1,694,288
1,686,288
1,285,261
401,027
2,860,838
2,861,838
2,828,603
33235
2,033,455
2,033,455
1,897,185
136,270
1,937,793
1,946,793
1,925,644
21,149
1,038,211
1,038,211
654,169
384,042
758,502
758,502
604,104
154,398
48,113,067
48,420,154
44,361,990
4,058,164
65,529,060
67,278,690
64,784,785
2,493,905
47,185,584
48,740,661
47,756,099
984,562
9,146,416
9,635,813
7,648,031
1,987,782
3,381,482
3,398,482
3,102,525
295,957
2,135,398
2,224,891
2,011,333
213,558
330,000
330,000
330,000
-
1,849,784
1,977,182
1,376,595
600,587
2,081,625
2,081,625
2,081,625
131,639,349
135,667,344
129,090,993
6,576,351
6,831,908 7,259,725 4,728,377 2,531,348
-39-
(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 Jude 30, 2018
Expenditures (continued):
Current (continued):
Health, education and welfare:
Elderly activities
Office of aging
Education
Social programs
Cemeteries
Physical examni-iatlon
Total health, education and welfare
Culture and recreation:
Community music
Organized recreation:
Maintenance
Recreation
Aquatics
Hoolulu park complex
Administration
Children's zoo
Summer/ Interse s sio n
Culture and arts
Elderly activities admimistration
Total culture and recreation
Sanitation:
Environmental management
Pension and retirement contributions
Employees' health insurance
Other postemployment benefits
Other
Total current
Actual Variance
Origixlal Final (Budgetary Positive
Budget Budget Basis) (Negative)
3,878,835
3,916,985
3,550,999
365,986
3,664,719
3,672,719
2,982,161
690!)558
58,500
58,500
38,703
19,797
1,500,003
1,500,003
1,483,250
16,753
406,599
463,799
437,967
25,832
133,826
133,826
133,825
1
9,642,482
9,745,832
8,626,905
1,118,927
273,689 273,689 219,162 54527
10,121,925
10,019,150
9,408,238
610,912
3,123,959
3,160,931
2,909,516
251,415
2,504,747
2,506,647
2,101,057
405,590
1,009,264
1,009,264
975,278
33,986
1,946,916
2,087,020
1,939,331
147,689
799,760
823,960
807,660
16,300
506,348
512,348
374,773
137,575
317,173
324,384
258,555
65,829
672,445
708,837
657,316
51,521
21,276,226
21,426,230
19,650,886
1,775,344
1,101,770
1,141,770
1,115,149
26,621
45,988,658
45,988,658
41,772,542
4,216,116
33,700,859
33,700,859
31,307,205
2,393,654
14,867,200
14,867,200
14,845,491
21,709
12,287,500
10,145,661
2,396,649
7,749,012
325,449,019
328,363,433
297,896,187
30,467,246
(Continued)
COUNTY OF HAWAII
General Fund
Statement of Revenues, Expenditures, and Changes in Fuld Balance -
Bud get and Actual (Budgetary Basis)
For the Fiscal Year Ended Jude 30, 2018
Expenditures (continued):
Capital Outlay:
Community Development Block
grants (HUD)
HO -ME Program
Other
Total capital outlay
(Concluded)
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
100,000 $ 2,652,417 2,652,417 $ -
50,000 2,475,000 2,104,668 370,332
1,425,000 1,425,000 -
150,000 6,552,417 6,182,085 370,332
Total expenditures
325,599,019
334,915,850
304,078,272
30,837,578
Excess of revenues over expenditures
60,521,795
60,545,050
86,917,361
26,372,311
Other financing sources (uses):
Transfers out:
Housing Fund
(2,143,350)
(2,094,578)
(1,173,675)
920,903
Solid Waste Fuuld
(19,483,277)
(19,483,277)
(19,483,277)
-
Sewer Fund
(2,268,837)
(2,268,837)
(2,268,837)
Golf Course Fund
(542,954)
(542,954)
(542,954)
-
Capital Project Fuuld
(40,727)
(40,727)
-
Highway Fund
(8,800)
(8,800)
Disaster/ Emergency Fund
(250,000)
(250,000)
(250,000)
Public Access, Opel Space, and Natural
Resources Preservation Fuld
(6,054,195)
(6,074,195)
(6,033,981)
40,214
Public Access, Open Space, and Natural
Resources Preservation Maintenance Fund
(756,774)
(759,274)
(754,248)
5,026
Budget Stabilization Fuld
(250,000)
(250,000)
(250,000)
Debt Service Fund
(49,129,513)
(49,129,513)
(49,129,513)
Total transfers out
(80,878,900)
(80,902,155)
(79,936,012)
966,143
Total other financing uses
(80,878,900)
(80,902,155)
(79,936,012)
966,143
Excess (deficiency) of re -venues and other
sources over (under) expenditures and other uses
(20,357,105)
(20,357,105)
6,981,349
27,338,454
Fund balance at begirt ing of year
47,746,958
47,746,958
47,746,958
Fuild balance at end of year $ 27,389,853 $ 27,389,853$ 54,728,307 $27,338,454
See accompanying notes to the basic financial statements.
-41-
COUNTY OF HAWAII
Proprietary Funds
Statement of Net Position
Jude 30, 2018
Assets
Current assets:
Cash aild cash equivalents (dote 3)
Restricted cash and cash equivalents (dote 3)
I merest fund (note 3)
Receivables, net (dote 4)
Prepaid expenses
Total current assets
Noncurrent assets:
Restricted cash and cash equivalents (dote 3)
Capital assets (dote 6) :
Ladd and site improvements
Buildings and equipment
Less accumulated depreciation
Total capital assets
Total noilcurreilt assets
Total assets
Liabilities
Current liabilities:
Accounts payable
Internal Balances (dote 5)
Security deposits payable from restricted assets
Deferred revenue
Interest payable
Notes payable, current portion (dote 10)
Total current liabilities
Noncurrent liabilities:
Notes payable (dote 10)
Total liabilities
Net Position
Net nivestmeilt iii capital assets
Unrestricted
Total net position
See accompanying notes to the basic financial statements.
Business -type Activities -
Enterprise Funds
Kulaimano O uli Ekahi
Elderly Affordable
Housing Housing
Project Project Total
613,594 $ 449,679 1,063,273
12,704 29,493 42,197
50 100 150
264 5,038 5,302
1,868 1,868
628,480 484,310 1,112,790
72,659 72,659
511,000
515,727
1,026,727
1,241,542
488,522
1,730,064
(1,261,972)
(92,276)
(1,354,248)
490,570
911,973
1,402,543
490,570 984,632 1,475,202
1,119,050 1,468,942 2,587,992
5,644
6,439
12,083
2,700
2,700
12,704
28,050
40,754
299
1,118
1417
10,003
-
10,003
62,622
29,273
91,895
93,972
64,880
158,852
529,874 185,236 715,110
623,846 250,116 873,962
(101,926) 697,464 595,538
597,130 521,362 1,118,492
$ 495,204 1,218,826 $ 1,714,030
COUNTY OF HAWAII
Proprietary Funds
Statement of Revenues, Expenses, and Changes xtl Futld Net Position
For the Fiscal Year Ended Jude 30, 2018
Operating revenues:
Rental receipts from teilaxlts
Rental subsidy from federal government - HUD
Lautldry receipts
Other
Total operating revenues
Operating expenses:
Utilities
General aild admimstration
Maixlteilailce and repairs
Depreciation (dote 6)
Total operating expenses
Operating income
Nonoperatiilg revenues (expenses):
Investment income
Interest expense
(Loss) on disposal 'of assets
Total nonoperatiilg revenues (expenses)
Change 1n net position
Net position, begiminig of year
Net position, eild of year
See accompanying notes to the basic financial statements.
-43-
Business -type Activities -
Enterprise Funds
I<�ulaimano
Ouli Ekahi
Elderly
Affordable
Housing
Housing
Project
Project Total
129,046 $
331,839 $ 460,885
224,921
- 224,921
2,734
- 2,734
621
39,357 39,978
357,322
371,196 728,518
36,620
45,865
82485
161,385
76,825
238,210
48,382
114,361
162,743
34,850
16,371
51,221
281,237 253,422 534,659
76,085 117,774 193,859
5,540
21
5,561
(31,875)
(31,875)
(330)
(330)
(26,665)
21
(26,644)
49,420
117,795
167,215
445,784
1,101,031
1,546,815
495,204
1,218,826
$ 1,714,030
COUNTY OF HAWAII
Proprietary Funds
Statement of Cash Flows
For the Fiscal Year Ended June 30, 2018
Cash Flows from Operating Activities
Receipts from tenants
Receipts from federal government - HUD
Payments to suppliers for goods and services
Net cash provided by operating activities
Cash Flows from Capital and Related Financing Activities
Principal paid on notes payable
Interest paid on notes payable
Purchase of capital assets
Net cash used in capital and related financing activities
Cash Flows from Investing Activities
Proceeds from maturities of investments
Purchase of investments
Interest on investments
Net cash provided by investing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year (including
restricted cash and cash equivalents)
Cash and cash equivalents at end of year (including
restricted cash and cash equivalents)
Reconciliation of Operating Income to Net Cash
Provided by Operating Activities
Operating income
Adjustments to reconcile operating income to net cash
provided by operating activities:
Depreciation expense
Change in assets and liabilities:
Receivables, net
Prepaid expenses
Accounts and other payables
Deferred revenue
Net cash provided by operating activities
See accompanying notes to the basic financial statements.
Business -type Activities -
Enterprise Funds
Kulaimano OulEkahi
Elderly Affordable
Housing Housing
Project Project Total
$ 133,609 $ 370,917 $ 504,526
224,921 224,921
(245, 368) (260, 332) (505, 700)
113,162 110585 223, 747
(59,251)
(58,393) (117,644)
(32,999)
(32,999)
(3,760)
(1,393) (5,153)
(96,010)
(59, 786) (155, 796)
1,400,000 1,400,000
(1,200,000) (1,200,000)
5402 21 5423
205402 21 205423
222554 50,820 273,374
403, 794 501,1 11 904,905
626, 348 $ 551,931 $1,178,279
$ 76,085 $ 117,774 $ 193,859
34,850 16,371 51221
(4)
(1,138) (1,142)
(77)
(77)
2410
(23,281) (20,871)
(102)
859 757
$ 113,162 $
110585 223,747
X6161 M a, Wel 0: MAI WMOM I I
Fiduciary Funds
Statement of Fiduciary Net Position
June 30, 2018
See accompanying notes to the basic financial statements.
-45-
Private -
Purpose
Agency
Trusts
Funds
Assets
Cash and cash equivalents (note 3)
1,706,380
$ 4,637,561
Investments (note 3)
3,132,501
412,998
Receivables:
Due from other agency funds
7,270
Other receivables
2,294
27,009
Total receivables
2,294
34,279
Total assets
4,841,175
5,084,838
Liabilities
Accounts payable
25,303
Due to other agency funds
7,270
Accrued liabilities
3,483,070
Advances payable
333,876
Assets held for the benefit of improvement districts
1,260,622
Total liabilities
25,303
5,084,838
Net Position
Held in trust for other parties
4,815,872
Total net position
$ 4,815,872
See accompanying notes to the basic financial statements.
-45-
COUNTY OF HAWAII
Fiduciary Funds
Statement of Changes M Fiduciary Net Positioi1
For the Fiscal Year Elded Jude 30, 2018
Deductions
Claims Corisultant 25,303
Grant payments 60,092
Investment Fees 13,458
Total deductions 98,853
Change in net position 37,536
Net positioi1, beginlinlg of year 4,778,336
Net positior1, eild of year $ 4,815,872
See accompan--ing notes to the basic financial statements.
Private -
Purpose
Trusts
Additions
Contributions:
Puna Geothermal Venture
50,000
Investment earnings:
Net 11lcrease 111 fair value of nivestmerits
25,456
Dividends and interest
60,933
Total additions
136!)389
Deductions
Claims Corisultant 25,303
Grant payments 60,092
Investment Fees 13,458
Total deductions 98,853
Change in net position 37,536
Net positioi1, beginlinlg of year 4,778,336
Net positior1, eild of year $ 4,815,872
See accompan--ing notes to the basic financial statements.
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2018
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 (CA FR),
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 Hawai' i (the State) assumes full responsibility
for several major functions usually performed by local governments, including education,
welfare, health and judicial functions, There are no separate city, county or township
governments nor any school districts, special districts, authorities or public corporations with
overlapping authority,
GASB Statement No. 14, as amended, defines component units as legally separate
organizations for which the elected officials of the primary government are financially
accountable or for which the primary government may determine, through exercise of
management's professional judgment, that the inclusion of an organization that does not meet
the financial accountability criteria is necessary in order to prevent the reporting entity's
financial statements from being misleading, "Financial accountability" is the level of
accountability that exists if a primary government appoints a voting majority of an
organization's governing board or if the organization is fiscally dependent on the primary
government and is either able to impose its will on that organization or there is a potential for
the organization to provide specific financial benefits to, or impose specific financial burdens
on, the primary government, A primary government has the ability to impose its will on an
organization if it can significantly influence the programs, projects, activities or level of
services performed or provided by the organization, An organization has a financial benefit or
burden relationship with the primary government if any one of three conditions exist: (I) The
primary government is legally entitled to or can otherwise access the organization's resources;
(2) The primary government is legally obligated or has otherwise assumed the obligation to
-47-
COUNTY OF HAWAII
Nates to the Basic Financial Statements
June 30, 2018
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 Hawai' i (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 C'o onent Unit The component unit column in the basic financial
statements includes the financial data of the Department, a legally independent agency of the
County that is accounted for as an enterprise fund, It is reported in a separate column to
emphasize that it is legally separate from the County, The members of the Water Board, the
governing body of the Department, are appointed by the Mayor of the County and confirmed
by the County Council, The Department is granted corporate powers by state statute and the
County Charter. Although the County does not have the authority to approve or modify the
Department's operational and capital budgets, the County has issued bonds on the
Department's behalf that are general obligations of the County. Because the County is
obligated to repay these bonds in the event of default by the Department, the County is
financially accountable for the debts of the Department. See Note 14 for component unit
disclosures for the Department. Complete financial statements of the Department can be
obtained from the Department of Water Supply, 345 Kekuanao' a Street, Suite 20, Hilo,
Hawaii 96720.
Basic Financial Statements
The basic financial statements include both government -wide (based on the County as a
whole) and fund financial statements. Both the government -wide and fund financial
statements (within the basic financial statements) categorize primary activities as either
governmental or business -type. In the government -wide statement of net position, both the
governmental and business -type activities columns (a) are presented on a consolidated basis
by column, (b) and are reflected, on a full accrual, economic resource basis, which
incorporates long-term assets and receivables as well as long-term debt and obligations.
The government -wide statement of activities reflects both the gross and net costs per
functional c ate gory (general government, public safety, highways and streets, etc,) which are
otherwise being supported by general government revenues (property taxes, certain
intergovernmental revenues, etc.). The statement of activities reduces gross expenses
(including depreciation) by related program revenues, operating and capital grants, The
program revenues must be directly associated with the function (general government, public
safety, highways and streets, etc.) or a business -type activity. The operating grants include
operating -specific and discretionary (either operating or capital) grants while the capital grants
column reflects capital -specific grants. The net cost (by function or business -type activity) is
normally covered by general revenues,
-48-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2018
The government -wide focus is more on the sustainability of the County as an entity and the
change in aggregate financial position resulting from the activities of the fiscal period,
The fund financial statements' emphasis is on the major funds in either the governmental or
business -type categories, Nonmajor funds (by category) are summarized into a single column,
The governmental funds in the fund financial statements are presented using the current
financial resource focus and modified accrual basis of accounting. This is the manner in
which these funds are normally budgeted. This presentation is deemed most appropriate to (a)
demonstrate legal and covenant compliance, (b) demonstrate the source and use of liquid
resources, and (c) demonstrate how the County's actual experience conforms to the budget
fiscal plan, Since the governmental fund statements are presented using a different
measurement focus and basis of accounting than the government -wide statements'
governmental activities column, a reconciliation is presented on the page following each
statement, which briefly explains the adjustments necessary to transform the fund based
financial statements into the governmental activities column of the government -wide
presentation,
The County's fiduciary funds are presented in the fund financial statements by type (private
purpose and 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 fundfnancial statements The government -wide financial
statements (i.e., the statement of net position and the statement of activities) report
information on all of the nonfiduciary activities of the primary government and its component
unit. The effect of interfund activity has been removed from these statements during the
process of incorporating fund data but interfund services provided and used have not been
eliminated in the process of consolidation, Governmental activities, which normally are
supported by taxes and intergovernmental revenues, are reported separately from business -
type activities, which rely to a significant extent on fees and charges for support, Likewise,
the primary government is reported separately from certain legally separate component units
for which the primary government is financially accountable.
The statement of activities demonstrates the degree to which the direct expenses of a given
function or segment are offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or segment, Program revenues include (a) charges to
customers or applicants who purchase, use, or directly benefit from goods, services, or
privileges provided by a given function or segment aid fib} grants aid cotributios that are
restricted to meeting the operational or capital requirements of a particular function or
segment. Taxes and other items not included among program revenues are reported instead as
general revenues,
COUNTY of HAWAI' I
Notes to the Basic Financial Statements
June 30, 2018
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 fiinds - The financial transactions of the County are recorded in individual funds,
Each fund is accounted for by providing a separate set of self -balancing accounts that
comprises its assets, deferred outflows of resources, liabilities, deferred inflows of resources,
reserves, fund equity, revenues and expenditure slexpenses, The various funds are reported by
generic classification within the financial statements.
GASB Statement No. 34, Basic Financial Statements - and Management's Discussion and
Analysis for State and Local Governments, sets forth minimum criteria (percentage of the
assets, deferred outflows of resources, liabilities, deferred inflows of resources, revenues or
expenditure slexpenses of either fund category or the governmental and enterprise combined)
for the determination of major funds. The nonmaj or 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,
Band Redemption Fund- Used to accumulate moneys for the payment of general
obligation bonds, Moneys required to retire the bonds are transferred from the General
Fund one year in advance of maturity.
The County reports the following major proprietary funds:
r
Tula mano Elderly Horsing 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.
16011
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2018
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 Hawai' i,
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 No. 19 Fund
• I mprovement 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.
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2018
Licenses and permits, charges for current services, fines and forfeitures, penalties and
miscellaneous revenues are recorded as revenues when received in cash because they are
generally not measurable until actually received, Real property taxes and State Revolving
Fund loan proceeds are considered available when collected,
In applying the susceptible to accrual concept to intergovernmental revenues, the legal and
contractual requirements of the numerous individual programs are used as guidance, There
are essentially two types of these revenues. In one, monies must be expended on the specific
purpose or project before any amounts will be paid to the County; therefore, revenues are
recognized based upon the expenditures recorded. Most construction grants and many
operating grants fall into this category. In the other, monies are virtually unrestricted as to
purpose of expenditure and are usually revocable only for failure to comply with prescribed
compliance requirements. These resources are reflected as revenues at the time of receipt or
earlier if the susceptible to accrual criteria are met,
The County reports deferred inflow of resources in its fund financial statements (see Note 7),
Deferred inflows of resources arise when potential revenue does not meet both the
"measurable" and "available" criteria for recognition in the current period. In subsequent
periods, when both revenue recognition criteria are met, the deferred inflow is removed from
the fund financial statements and revenue is recognized,
Expenditures are recognized under the modified accrual basis of accounting in the accounting
period in which the fund liability is incurred. Exceptions to this general rule include:
(a) accumulated compensated absences and claims and judgments which are recognized as
expenditures when paid; (b) liabilities related to municipal solid waste landfill closure and
postclosure care costs; (c) principal and interest on general long-term debt which are
recognized as expenditures when due; and (d) liabilities relating to pollution remediation ,
The County applies all applicable GASB pronouncements, including the adoption of GASB
Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained
in Pre November 30, 1989 FASB (Financial Accounting Standards Board) and AICPA
(American Institute of Certified Public Accountants) Pronouncements.
Encumbrances
The general, special revenue, and capital projects funds follow encumbrance accounting under
which purchase orders, contracts and other commitments are recorded as an obligation of fund
balance and provide authority for the carryover of appropriations to the subsequent year in
order to complete these transactions. Encumbrances outstanding at year-end are included in
the respective fund balance categories as appropriate and do not constitute expenditures or
liabilities because the commitments will be honored during the subsequent year.
COUNTY OF HAWAII
[dotes to the Basic Financial Statements
June 30, 2018
Cash and Investments
Cash and cash equivalents include cash on hand, amounts in demand deposits and savings
accounts, and short-term investments with a maturity date of three months or less from the
date acquired by the County.
Investments consist of certificates of deposit, repurchase agreements, and securities with
original maturities exceeding three months, These include participating investment contracts
(U,S. government sponsored agency issues and negotiable certificates of deposit) as well as
nonparticipating investment contracts (time certificates of deposit and repurchase agreements).
Both categories of investments are stated at fair value (see Note 3), Valuations of investments
in government sponsored enterprises such as Federal National Mortgage Association (Fannie
Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) are based on quoted
market rates. Investments also consist of equity securities in the fiduciary fund financial
statements, These investments are stated at fair value based on closing quoted prices.
Real Property Taxes
The County's real property taxes are levied on July 1 each year on assessed valuation as of
January 1, The taxes become a lien on the property assessed as of the levy date, Taxes are
due and payable in two equal annual installments on August 20 and February 20. Accordingly,
real property taxes receivable as of June 30 are delinquent. Each delinquent installment bears
interest at 1 % per month and penalties of up to 10% of the amount due. Assessments are
based on 100% of estimated fair market values prior to the application of exemptions or
preferential assessments.
The County provides real property tax abatement under five programs Enterprise Zone,
Historic Residential Dedication, Low and Moderate Income Housing, Agricultural Use
Programs, and Solar Water Heater Credit:
Enterprise Zone Exemption - Section 19-89.3 of the Hawai' i County Code provides buildings
or other like structures which are built as a result of new construction by a qualified business
within an enterprise zone to be exempt except for the minimum tax from real property taxes
for a period of three years. The purpose of this program is to stimulate business and industrial
growth. A qualified business in an enterprise zone must satisfy the requirements of Chapter 31
of the Hawai' i County Code and section 208E, Hawaii Revised Statutes.
Historic Residential Dedication Exemption Section 19-89.1 of the Hawai' i County Code
and Rule 36 of the Rules and Regulations of the Director of Finance provides an exemption to
encourage the preservation of residential structures that have been placed on the Hawaii
Register of Historic Places after January 1, 1977. The property owner must provide visual
access on a year-round basis or open the property to the public for twelve days per year, The
owner certifies the current level of taxation is a material factor which threatens the continued
existence of the historic status. This dedication is for a minimum period of ten years,
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2018
automatically renewable indefinitely. Cancellation of the dedication by either the owner or
the Director of Finance may only be made upon five years' written advance notice and no
earlier than the end of the fifth tax year. Any person who becomes an owner of the dedicated
real property shall be subject to the restrictions and retroactive tax assessment provisions. If
the dedication is approved, the exemption based upon the dedication shall be effective July 1
of the tax year following the approval of the dedication. The dedicated exempt property or
portion of the property approved shall be subject to the minimum tax provisions of Section 19-
90(e) of the Hawaii County Code, If there is a breach in the agreement, the property would be
subject to roll back taxes, including penalty and interest,
L.o2P and Moderate -Income Dousing Section 19-87 of the Hawaii County Code
and Rule 37 of the Rules and Regulations of the Director of Finance provides an exemption
for a housing project which is owned and operated by a nonprofit or limited distribution
mortgagor or by a qualified entity from taxation. Must participate in long-term housing
project that have regulatory agreements mandating rent levels, occupancy of the project is
li mited to the elderly, handicapped, low or moderate income families. Applicants must submit
an application form along with a copy of the recorded regulatory agreement, The exemption
is equal to 100% of the assessed value for the portion of the real property that is dedicated as
low- and moderate -income rentals. If the entire property is dedicated, then the net taxable is
zero but the property is still subject to the minimum tax per Section 19-90(e) of the Hawaii
County Code. The exemption shall continue so long as the rental housing project is owned
and operated by a nonprofit or limited mortgagor, If the rental units do not comply with the
regulatory conditions, the property would be subject to roll back taxes, including penalty and
interest,
Iola -Dedicated-4gncultural Use -Assessment — Section 19-57 of the Hawaii County Code
and Rule 34 of the Rules and Regulations of the Director of Finance reduces assessments to
encourage local agricultural production as well as the preservation of agricultural lands that
could otherwise be further developed, by valuing these lands at two times the dedicated
agricultural use value as opposed to the market value. Unlike the Dedicated Agricultural Use
program, the zoning for this program must be agricultural. An application form must be filed
along with a plot plan and provide details as to what agricultural activities is conducted on the
property. Upon review and approval, the application is effective as of January 1 for the
following tax year, Renewal of the application shall be in such form and at such time as
requested by the director. Valuation consideration is given to the type of agricultural activity.
Any breach to the terms of would result in an immediate rollback calculation of current plus
two yeas taxes plus penalties and interest.
Commer,cial _Agncultural Use Dedication — Section 19-60 of the Hawaii County Code and
Rule 31 of the Rules and Regulations of the Director of Finance provides reduced assessments
to encourage local agricultural production as well as the preservation of agricultural lands that
could otherwise be further developed, by valuing the dedicated lands at the agricultural use
value as opposed to the market value, An application form must be filed along with a plot
plan and provide details as to what agricultural activities is conducted on the property, Upon
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COUNTY OF HAWAII
Dotes to the Basic Financial Statements
June 30, 2018
review and approval, the owner is required to record the dedication at the Bureau of
Conveyances, There is currently only one available dedication length which is a 10 year
period, however, previously there was a 20 year dedication, This dedication does not
automatically renew, Valuation consideration is given to the type of agricultural activity,
Any breach to the terms of the recorded dedication would result in the cancellation of the
dedication, or portion thereof, and the immediate rollback calculation of taxes plus penalties
and interest.
Solar Yater Heater Credit Section 19-104 of the Hawaii County Code provides a one time
tax credit per tax map key for up to $300 for the owner of real property who installs a solar
water heater on the owner's property on or after January 1, 2005, This program was created
with the purpose of providing an incentive to support renewable energy, The owner must
apply for the credit.
Information relevant to the disclosure of these programs for the fiscal year ended June 30,
2018 is as follows:
Tax Abatement Program
Enterprise Zone
Historic Residential Dedication
Low and Moderate Income Housing
Agricultural Use Programs
Solar water Heater Credit
Inventories
Amount of Taxes Abated - as defined by GASB 77
$9,979.25
$251,465.60
$5331G16.30
$29,138,884.00
$19,200,00
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, 2018 of $499,264 are reflected as a restriction of general fund balance.
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2018
Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads,
bridges, curbs and gutters, streets and sidewalks, drainage systems, lighting systems, and
similar items), are reported in the applicable governmental or business -type activities columns
in the government -wide financial statements, Capital assets are defined by the County as
assets with an initial, individual cost of more than $1,000 and an estimated useful life in
excess of one year, Such assets are recorded at historical cost or estimated historical cost if
purchased or constructed. Donated capital assets are recorded at acquisition value if available
or if not, at estimated fair market value at the date of donation,
The costs of normal maintenance and repairs that do not add to the value of the asset or
materially extend the life of the asset are not capitalized,
Major outlays for capital assets and improvements are capitalized as projects are constructed,
Interest incurred during the construction phase of capital assets of business -type activities is
included as part of the capitalized value of the assets constructed.
Capital assets of the primary government and enterprise fund are depreciated using the
straight-line method over the following estimated useful lives of the assets:
Assets
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
Deferred outflows of Resources and Deferred Inflows of Resources
Deferred outflows of resources represent a consumption of net position that applies to a future
period and will not be recognized as an outflow of resources (expense or expenditure) until
that time, The County has three items that qualifies for reporting in this category, The County
reports the deferred loss on refunding and deferred outflow related to both pensions and other
postemployment benefits (GPEB) as a deferred outflow of resources in its statement of net
position,
Deferred inflows of resources represent an acquisition of net position that applies to a future
period and will not be recognized as an inflow of resources (revenue) until that time. Property
taxes, fees and other non-exchange transactions received in the current fiscal year for the
ensuing fiscal year are reported as deferred inflows of resources, These amounts are deferred
and recognized as an inflow of resources in the period that the amounts become available.
The County also reports deferred inflows of resources related to both pensions and other
postemployment benefits (GPEB).
lrm
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2018
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 o the government -wide
statement of net position. Long-term debt and other obligations financed by the proprietary
funds are reported as liabilities in those funds.
Compensated Absences
Employees earn vacation credit at the rate of one and three-quarter working days for each
month of service, Up to ninety days of vacation leave credits can be accumulated per
employee, In addition, employees who work overtime can elect to take compensatory time off
instead of overtime pay. The time off is earned at the rate of one -and -a -half hours for each
hour of overtime worked. There is no statutory limit to the amount of compensatory time off
an employee can accumulate. Both compensatory time off and vacation credits are converted
to pay upon termination of employment,
A liability for these amounts is reported in the governmental funds only if they have matured,
for example, as a result of employee resignations and retirements. All vacation and
compensatory time off pay is accrued in the government -wide statement of net position along
with the estimated liability for social security and Medicare taxes and employers' retirement
contributions on those amounts,
Sick leave accumulates without limit. Sick leave can be taken only in the event of illness and
is not convertible to pay upon termination of employment; therefore there is no related
liability. However, a County employee who retires or leaves government service in good
standing with 60 days or more of unused sick leave is entitled to additional service credit in
the Employees' Retirement System of the State of Hawaii. Accumulated sick leave at
June 30, 2018 totaled $77,952,000 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 S), 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.
Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and
deferred inflows of resources related to pensions, and pension expense, information about the
fiduciary net position of the Employees' Retirement System of the State of Hawaii (ERS) and
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COUNTY OF HAWAII
Nates to the Basic Financial Statements
June 30, 2018
additions to and deductions from ERS's fiduciary net position have been determined on the
same basis as they are reported by ERS. For this purpose, benefit payments (including
refunds of employee contributions) are recognized when due and payable in accordance with
the benefit terms. Investments are reported at fair value.
Other Postemployment Benefits (OPEB)
For the purposes of measuring the net GPEB liability, deferred outflows or resources and
deferred inflows of resources related to GPEB, and GPEB expense, information about the
fiduciary net position of the Hawaii Employer -Union Health Benefits Trust Fund ("EUTF")
and additions to/deductions from EUTF's fiduciary net position have been determined on the
same basis as they are reported for EUTF. For this purpose, EUTF recognizes benefit
payments when due and payable in accordance with the benefit terms. Investments are
reported at fair value, except for investments in commingled and money market funds, which
are reported at net asset value (NAV). The NAV is based on the fair value of the underlying
assets held by the respective fund less its liabilities,
Operating Revenues and Expenses
Revenues and expenses are distinguished between operating and nonoperating items for the
proprietary funds. Operating revenues generally result from providing services in connection
with the proprietary funds' principal ongoing operations. The principal operating revenues of
the proprietary funds are fees charged to residents for rent and rental subsidies received from
the federal government.
Operating expenses include the costs associated with providing housing for tenants, such as
utilities, lease rent, and maintenance and repairs; administrative expenses; and depreciation on
capital assets, All revenues and expenses not meeting these definitions are reported as
nonoperating revenues and expenses.
Use of Estimates
The preparation of the basic financial statements in accordance with GAAP requires
management to make estimates and assumptions that affect the reported amounts of assets,
deferred outflows of resources, liabilities, and deferred inflows of resources, as well as
disclosure of contingent assets and liabilities at the date of the financial statements, and the
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
INM
COUNTY OF HAWAII
[dotes to the Basic Financial Statements
June 30, 2018
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 Hawai' i Revised Statutes or
County of Hawaii Charter).
Committed Fund Balance Committed Fund Balances are amounts that can only be used
for specific purposes as a result of constraints imposed by the County Council via
ordinances and the County Code and can only be undone via the same manner. The
committed fund balance of the General Fund includes the portion of fund balance
committed to budget stabilization. The budget stabilization portion is authorized under
County Code §2-219 to §2-223 and additions are made via the County budget or
subsequent budget amendments. The fund balance may only be used when there is a
reduction in budgeted revenue and the director of finance determines that such use is
necessary to prevent a reduction in the level of public services,
Assigned Fund Balance Assigned fund balances are amounts that are constrained by the
County's intent as determined by the Mayor but are neither restricted nor committed.
The County's only assigned fund balances are in the General Fund and Capital Projects
Fund and the majority consists of the portion of fund balance that is intended to balance
the subsequent year's budget, which is conveyed by the Mayor via his approval of
allotment requests and his approval of the current year's fund balance amount to be
included in the submittal for next year's annual budget ordinance,
Unassigned Fund Balance This is the residual classification of the General Fund. The
General Fund is the only fund that could potentially report a positive unassigned fund
balance.
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.
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2018
New Accounting Pronouncements
In June 20 15, GAS B issued Statement No. 75, Accounting and Financial Reporting for
Postemployment Benefits Other Than Pensions. The primary objective of this Statement is to
improve accounting and financial reporting by state and local governments for
postemployment benefits other than pensions (other postemployment benefits or O P E B) . The
requirements of this Statement are effective for the County for periods beginning after June
15, 2017, The County implemented these requirements as of and for the fiscal year ended
June 30, 2018.
In November 2016, GASB issued Statement No. 83, Certain Asset Retirement Obligations,
The objective of this Statement is to provide financial statement users with information about
asset retirement obligations (AROs) , The requirements of this Statement are effective for
reporting periods beginning after June 15, 2018 and did not have an impact on the County's
financials for the year ending June 30, 2018.
In January 2017, GASB issued Statement No, 84, Fiduciary Activities. The principal
objective of this Statement is to enhance the consistency and comparability fiduciary activity
reporting by state and local governments. The requirements of this Statement are effective for
reporting periods beginning after December 15, 2018, The County has not yet determined the
effect this Statement will have on its financial statements.
In March 2017, GASB issued Statement No, 85, omnibus 2017, The objective of this
Statement is to improve consistency in accounting and financial reporting by addressing
practice issues that have been identified during implementation and application of certain
GASB Statements. The requirements of this Statement are effective for reporting periods
beginning after June 15, 2017. The County implemented these requirements as of and for the
fiscal year ended June 30, 2018.
In May 2017, GASB issued Statement No. 86, Certain Debt Extinguishment Issues. The
objective of this Statement is to improve consistency in accounting and financial reporting for
certain debt extinguishments and to enhance the decision -usefulness of that information, The
requirements of this Statement are effective for reporting periods beginning after June 15,
2017 and did not have an impact on the County's financials for the year ending June 30, 2018n
In June 2017, GASB issued Statement No, 87, Leases. The objective of this Statement is to
better meet the information needs of financial statement users by improving accounting and
financial reporting for leases by governments. The requirements of this Statement are
effective for reporting periods beginning after December 15, 2019. The County has not yet
determined the effect this Statement will have on its financial statements.
In March 2018, GASB issued Statement No. 88, Certain Disclosures Related to Debt,
including Direct Borrowings and Direct Placements, The objective of this Statement is to
improve the information that is disclosed in notes to government financial statements, related
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2018
to debt, including direct borrowings and direct placements. The requirements of this
Statement are effective for reporting periods beginning after June 15, 2018.
In June 2018, GASB issued Statement No, 891 Accounting for Interest Fast Incurred Before
the End of a Construction Period, The objectives of this Statement are (1) to enhance the
relevance and comparability of information about capital assets and the cost of borrowing for
a reporting period and (2) to simplify accounting for interest cost incurred before the end of a
construction period. The requirements of this Statement are effective for reporting periods
beginning after December 15, 2019.
Adoption of New Accounting Principle
The County and Department implemented GASB Statement No. 78, Accounting and
Financial Reporting for Postemploytnent Benefits other Than Pensions. This Statement
replaces GASB Statement No, 48, Accounting and Financial Reporting by Employers .for
Postemployment Benefits Other Than Pensions, and No. 57, OPER Measurements by Agent
Employers and AgentMultiple-employerPlans, The primary objective of this Statement is to
improve accounting and financial reporting by state and local governments for
postemployment benefits other than pensions (other postemployment benefits or GPEB), As a
result, the County and Department's net position as of June 30, 2017 was restated and
decreased by $274,026,503 and $15,702,743, respectively,
Net Position at June 30, 2017, as previously stated
Cumulative effect of applying GASB 75:
Reverse net GPEB (asset) liability at
June 30, 2017, as previously stated
Net GPEB liability at June 30, 2017
Governmental
Activities Component Unit
$ 434,457,254
82,247,822
(384,824,312)
$ 24818981228
(385)
(17, 570,146 )
Deferred outflows of resources employer
contributions made subsequent to the
measurement date of the beginning net
position liability but prior to June 30, 2017 2815491987 1,857,788
Net Position at June 30, 2017, as restated $16014301751 $ 2331195.485
Management of the County and Department concluded that it was not practical to determine
the beginning amounts of all GPEB-related deferred inflows of resources and deferred
outflows of resources, Accordingly, as permitted under the provisions of GASB No. 75, the
County and Department have only reported the beginning deferred outflow of resources
resulting from employer GPEB contributions made subsequent to the measurement date of the
beginning net GPEB liability but prior to June 30, 2017.
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2018
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 2016-2017 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 $7.7 million in the general fund and $3,3
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 Fuad and Park Dedication Fund,
Appropriations for the operating budget lapse at the end of the fiscal year to the extent
that they have not been expended or encumbered. Appropriations for capital
expenditures that are not encumbered lapse at the end of two fiscal years following the
fiscal year that the appropriation was made.
Formal budgetary integration is employed as a management control device during the
year for the General Fund, special revenue funds, and Capital Projects Fund. Formal
budgetary integration is not employed for debt service funds because effective budgetary
control is alternatively achieved through general obligation bond indenture provisions,
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 301, 2018
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, 2018:
Ending fund balance — GAAP basis $61,040,124
Encumbrance adjustments:
Beginning encumbrances and unexpended allotments 1,203,398
Ending encumbrances and unexpended allotments (1,915,855)
Other adjustments (5,599,360)
Ending fund balance —Non -GAAP budgetary basis 54 728, 307
3. CASH AND INVESTMENTS
The Director of Finance is responsible for the safekeeping of all monies paid to the County,
The Director of Finance invests any monies of the County which in the Director's judgment
are in excess of the amounts necessary for meeting the day-to-day operating needs of the
County. Under Section 46-5 0 of the Hawai' i Revised Statutes, legally authorized investments
include obligations of or guaranteed by the U.S. government, obligations of the State,
federally insured savings and checking accounts, time certificates of deposit, and repurchase
agreements with federally insured financial institutions.
Cash
The County maintains a number of checking and savings accounts for various funds and with
various financial institutions. Bank deposits are under the custody of the Director of Finance,
For financial statement reporting purposes, cash and short-term investments consist of cash
and money market accounts. Cash and short-term investments also include repurchase
agreements, certificates of deposit, and government sponsored securities with original
maturities of three months or less,
-63-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2018
The carrying amount of the County's deposits (cash, time certificates of deposit, and money
market accounts) as of June 30, 2018 was $199,757,954 for the primary government and
$6,590,869 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 $212,619,665 at June 30, 2018, Of that amount, $211,528,390
represents bank balances covered by federal deposit insurance or by collateral held by the
County's fiscal agents in the name of the County, The remaining bank balances of $1,091,275
represent deposits held by a management agent and were uncollateralized, Accordingly, these
deposits were exposed to custodial credit risk, Custodial credit risk is the risk that in the event
of a bank failure, the County's deposits may not be returned to it. For checking and savings
accounts, time certificates of deposit, and repurchase agreements, the County requires, in
accordance with State statutes, that the depository banks pledge collateral based on the
available bank balances for the protection of the funds deposited. All securities pledged as
collateral are held by the County's fiscal agents in the name of the County, The County also
requires that no more than 60% of the County's total funds available for deposit may be
deposited in any one financial institution, in accordance with State statutes,
Investments
The County holds investments both for its own benefit and on behalf of some of the fiduciary
funds. The County's investments of funds not required for immediate payments are
predominately comprised of government sponsored securities (equivalent to the rating in U,S.
Treasuries), repurchase agreements and certificates of deposit, while the fiduciary funds also
hold equity securities.
The framework for measuring fair value provides a fair value hierarchy that prioritizes the
inputs to valuation techniques used to measure fair value. The hierarchy gives the highest
priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1)
and the lowest priority to unobservable inputs (level 3), The three levels of the fair value
hierarchy are described as follows:
Level 1 — Inputs are quoted prices (unadjusted) in active markets for identical assets or
liabilities that a government can access at the measurement date. An active market is a
market in which transactions for the asset or liability take place with sufficient frequency
and volume to provide pricing information on an ongoing basis,
Level 2 — Inputs other than quoted prices included within level 1 that are observable for
an asset or liability, either directly or indirectly, If the asset or liability has a specified
(contractual) term, a level 2 input must be observable for most of the full term of the asset
or liability. Level 2 inputs include:
• Quoted prices for similar assets or liabilities in active markets,
EWA E
COUNTY OF HAWAII
[Votes to the Basic Financial Statements
June 30, 2018
• Quoted prices for identical assets or liabilities in markets that are not active,
• Inputs other than quoted prices that are observable for the asset or liability,
• Inputs that are derived principally from or corroborated by observable market
data by correlation or other means,
Level 3 Inputs are unobservable for an asset or liability,
Following is a description of the valuation techniques used by the County to measure fair
value:
Government sponsored securities of $24,461,861 and certificates of deposits of
$49,970,582: Valued using quoted prices for identical or similar assets in markets that are
not active (Level 2).
Equity securities of $1,606,656: Valued using quoted prices in active markets for
identical assets or liabilities that a government can access at the measurement date (Level
1).
The County's investments and maturities at June 30, 2018 are as follows:
Investments Primary Government:
Certificates of deposit
Government sponsored securities
Investments Private -Purpose Trusts:
Government sponsored securities
Equity securities
Investments Agency Funds:
Certificates of deposit
Government sponsored securities
Maturity (in yearsl
Fair Value Less than 1 1-5
$ 4917231684 $ 42,926,755 $ 6,796,899
2217691946 119781040 2017911906
72.493 600 $ 443904795 $27J88.805
$ $ 1525,845
$ 1,505 656
$ 246;928 $ $ 246;928
155,070 155,070
_
412928 $ 412.998
Interest Rate Risk: The County minimizes its exposure to interest rate risk by limiting the
maturities of investments to five years or less in compliance with state statute, The County's
policy is to hold investments until maturity and does not engage in trading for capital gains.
Credit Risk: The County's investment portfolio primarily consists of U.S. government or
agency obligations, bonds of government sponsored enterprises, time certificates of deposit
s:�'1
C OUNT Y of HAWAII
Dotes to the Basic Financial Statements
June 30, 2018
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, 2018,
investments were distributed as follows: FTN Financial, 4,4%; Multi Bank Securities, 15.3%;
First Hawaiian Bank, 17,9%; Raymond James, 4,4%; Stifel Nicolaus & Company, 4,8%; Bank
of Hawaii, 43,9%; Territorial Savings 9.3%.
Restricted Cash and Cash Equivalents and Investments
Cash and cash equivalents and investments classified as restricted assets for the primary
government at June 30, 2018 amounted to $ 1 17,232,972.
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 $55,536,495 atJune 30, 2018.
Cash and investments in the Bond Redemption Fund and the Interest Fuad are restricted to
debt service related payments and amounted to $30,440,308,
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
$10,339,816.
Cash in the Hawaii County Housing Agency classified as restricted to provide public housing
assistance amounted to $1 1432,621
The restricted cash and investments in the General Fund was comprised of cash restricted to
costs incurred to administer the liquor commission and cash restricted to the acquisition and
maintenance of lands or property entitlements for public outdoor recreation and education.
Such amounts totaled $469,264 and $18,899,612, respectively.
Tenant security deposits received by the County for the I Aa'imano Elderly Housing Project
and the Ouli Ekahi Affordable Housing Project are recorded as restricted assets, Such funds
amounted to $12,704 and $29,4931., respectively, at June 30, 2018.
-66-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2018
An operating reserve fund was established by the Ouli Ekahi Affordable Housing Project
pursuant to an agreement with the Hawai' i i Housing Finance and Development Corporation,
who are the holders of the project's note. This restricted reserve amounted to $72,659 at June
30, 2018n
4. RECEIVABLES
Receivables as of June 30, 2018, 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:
During fiscal year 2005, the County issued $3,887,493 in general obligation bonds on behalf
of Improvement District No. 18, an agency fund, On February 12, 2013 bonds were issued to
refund the outstanding principal balance of $1,345,945 for the Improvement District. During
fiscal year 2014 and 2015, the County also issued $448,669 and $720,331, respectively, in
general obligation bonds on behalf of Improvement District No. 19, an agency fund. At June
30, 2018, the outstanding balance for both Improvement Districts of $2,098,246 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
Proj e cts
Governmental
938
Gross receivables
Fund
Fund
Funds
Total
Real property taxes
$28,266,778
$51)302
$28,266,778
Accounts receivable:
Sewer
--
1,941,995
1,941,995
Solid waste
--
1,747,238
1,747,238
Intergovernmental
26:668:385
7,954,660
3,746,145
38.369.190
Gross receivables
54,935,163
7,954,660
7,435,378
70,325,201
Less: allowance for
uncollectibles
(2.853.8201
(745,913)3.599.733)
Net total receivables
1
$ 7,954,660
I
I
During fiscal year 2005, the County issued $3,887,493 in general obligation bonds on behalf
of Improvement District No. 18, an agency fund, On February 12, 2013 bonds were issued to
refund the outstanding principal balance of $1,345,945 for the Improvement District. During
fiscal year 2014 and 2015, the County also issued $448,669 and $720,331, respectively, in
general obligation bonds on behalf of Improvement District No. 19, an agency fund. At June
30, 2018, the outstanding balance for both Improvement Districts of $2,098,246 is reflected in
the government -wide statement of net position as a receivable (see Note 10).
Business -type activities:
Enterprise
Funds
Accounts receivable:
Rent
$12,299
Other
938
Gross receivables
13,237
Less: allowance for
uncollectibles
(7,935)
Net total receivables
$51)302
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 301, 2018
5. INTERFUND RECEIVABLES AND PAYABLES
Interfund receivables and parables consist of the following at June 30, 2018:
Receivable Fund Pa cable Fund Amount
General fund Capital projects fund $ 402,048
Other governmental funds 1.686.149
2,088,197
Capital projects fund General fund 38,999
Other governmental funds 655.291
694,290
Bond redemption fund Capital projects fund 31Y2041Y372
Other governmental funds General fund 6191Y033
Other governmental funds 106.289
725.322
Total $6712,181
Other governmental funds Enterprise funds $2,700
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, 2018 consisted of the following:
Transfers out:
Capital Other
General Projects Governmental
Fund Fund Funds Total
Transfers in:
Capital Projects Fund $ 40,727 $3,538,706 $ 3,579,433
Bond redemption fund 281Y073,388 31Y2041Y372 31,277,760
Other governmental funds 40,853,366 40.853.366
$68.967,481 $3,538, 706
The interfund transfers noted above include transfers from the General Fund to provide
support for various Countyr programs and to provide resources for the payment of debt
services. In addition, some of the other governmental funds have made transfers to the capital
projects fund for the construction of various projects,
COUNTY OF HAWAII
Nates to the Basic Financial Statements
June 301, 2018
G. CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2018 for the County was as follows:
Balance Balance
July 1, Retirements/ Jure 341,
2417 Additions Transfers 2018
Governmental activities:
Capital assets not being depreciated
Laud and
i mprovements
$ 239,187,891
$ 171Y2431Y464
$
$ 256,394,951
Easements
41Y2271Y058
11)9241)751
31Y9351Y545
61Y1511Y549
Construction work in
(439,300)
(439,300)
progress
7121152242
27,623,974
(48.150.481
54,591,695
Total capital assets not
being depreciated
314.533.151
46.751, 755
(48.150.481)
31321342455
Capital assets being depreciated:
Buildings and
being depreciated,
improvements
7141YO441YO30
461Y864,274
(1,039,584)
759,565,724
Equipment
1551Y6491Y772
5,657,699
(4,368,165)
1591Y929,346
Easements
456,497
456,497
Infrastructure
61928362216
524652445
62429442261
Total capital assets
being depreciated
1.459.946.515
6426242415
(5,407,749)
1.545.155.754
Less accumulated depreciation for
Buildings and
improvements
(116,056,044)
(12,175,546)
94,653
(128,140,907)
Equipment
(95,418,996)
(9,527,020)
31Y9351Y545
(101,010,508)
Easements
(439,300)
(439,300)
Infrastructure
X290.918.2311
(24,690,203)
(315.608.434L
Total accumulated
depreciation
(502.832.571
(46,392,769)
424262191
(545.199.149
Total capital assets
being depreciated,
net
95721132944
1422272249
(1,381,558)
99929592635
Goverri-nental
activities capital
as sets, net $1,301fi47 095 $ ($49,532, a3 �
COUNTY OF HAWAII
Nates to the Basic Financial Statements
June 30, 2018
Balance Balance
July 1, Retirements/ Jure 341,
2017 Additions Transfers 2418
Business -type activities:
Capital assets not being depreciated:
Land s 753.877 s 753.877
Capital assets being depreciated:
Buildings and
ii-nprovel-nents
1,593,187
1,593,187
Ground and site
Ground and site
ii-nprovements
2721y 850
2721Y 850
Equipment
1372950
52153 (6.226) 136,877
Total capital assets
(111,277)
(10,830)
beinff deoreciated
2.003.987
5.153 (6.226) 2.002.914
Less accuu-nulated depreciation for:
Buildings and
ii-nprovements
(982,689)
(36,044)
(1,018,733)
Ground and site
ii-nprovements
(214,957)
(4,347)
(219,304)
Egw'12ment
(111,277)
(10,830)
52896 (116,211}
Total accun-nulated
Depreciation
1.308.923)
(51,221)
5.896 �1.354.248�
Total capital assets
being depreciated,
net 695.064 (46,068) (330) 648.666
Business -type
activities capital
assets, net 51.448.941 - 4G 068� (330
C01§1 ► I V&s] 0: ►:%►j►►:� I
[Votes to the Basic Financial Statements
June 30, 2018
Depreciation expense was charged to functionslprograms of the primary government as
follows:
Governmental activities:
General government
$ 2,903,326
Public safety
4,679,371
Highways and streets
26,445,224
Sanitation
6,735,445
Health, education and welfare
2,150,098
Culture and recreation
313921892
Total depreciation expense governmental activities
Business -type activities:
Kula'imano Elderly Housing Project
$34,850
Guli Ekahi Affordable Housing Project
16,371
Total depreciation expense business -type activities
0AIIIIIIIIIII■1=1 ;I =1:1:1=1III IL" I@I11•1TMelaN*10111:10]*9
Deferred inflow of resources consists of the following at June 30, 2018:
Governmental activities:
Real property taxes
Liquor control revenue
Sewer revenue
Housing revenue
Solid waste revenue
Total presented in
fund financial
statements
Add deferred inflows
of resources related
to pensions & GPEB
Less adjustments for
accrual of revenues
Total government -
wideovernment-
wide financial
statements
Capital
Bond other
Total
General Projects
Redemption Governmental
Governmental
Fund Fund
Fund Funds
Funds
$ 28,551,426 $
$
$ 28,551,426
192,480
192,480
1283202
1283202
--
25,055
25,055
1,660,118
1,660,118
28,743,906
14;532;816
2,968,375 31,712,281
14,532,816
(25,412,957) (2,968,375) (28,381,332)
0
$ 17,863,765
COUNTY OF HAWAII
Nates to the Basic Financial Statements
June 30, 2018
8. LEASES
The County leases machinery and equipment under noncancellable leases expiring at various
dates through May 2023. 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 $12,928,097 and $2,246,204, respectively,
and the related present value of the remaining obligations under the capital leases amounting
to $8n 112,577 at June 30, 2018 are included in capital assets and long-term debt, respectively.
The County also leases land, office facilities and other equipment under noncancellable
operating leases expiring through August 2045. Expenditures for such operating leases were
$1,989,708 for the fiscal year ended June 30, 2018,
The future minimum payments under capital and operating leases at June 30, 2018 are as
follows:
Year Ending June 30:
2019
2020
2021
2022
2023
2024-2028
2029-2033
2034-2038
2039-2043
2044-2048
Total minimum lease payments
Less amount representing
interest
Obligations under capital leases
Capital Operating
Leases Leases
$2,642,236 $ 869,639
2,333,136
721,514
1,963,872
598,626
1,054,398
490,031
527,904
454,007
354,856
17,324
900
900
390
8,521,546 $3,508,187
(408,969)
C OUNT Y of HAWAII
Notes to the Basic Financial Statements
June 30, 2015
9. SOLID WASTE LANDFILL CLOSURE AND POSTCLOSURE CARE COSTS
Hilo Landfill The County owns and operates a landfill located in the city of Hilo. State and
federal laws require the County to place covers on certain landfill sites and to monitor and
maintain the sites for thirty years after the facility is closed. Although the closure and
postclosure care costs will be paid near and after the date that the landfill stops accepting
waste, the County recognizes a portion of the closure and postclosure care costs in each
operating period. The liability for these costs is included in the government -wide statement of
net position. The amount recognized each year is based on the landfill capacity used as of the
statement of net position date. At June 30, 2015, the County recognized a liability of
$21,752,000, based on the use of 98% of the estimated capacity of the landfill, During the
fiscal year ended June 30, 2015, there was $357,000 in expenditures incurred for the closure
of the landfill. The remaining $346,000 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 one year, These amounts are based on what it would cost
to perform the required closure and postclosure care in 2015. 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, 1995, 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,
IKealakehe In October 1993, the County closed its 1-.' ealak-ehe landfill in Iona. 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 $17,059,000, based on what it
would cost to perform the required closure and postclosure care in 2015, Actual costs may be
higher due to inflation, changes in technology, or changes in regulations, Through
June 30, 2015, $5,5331.,000 was spent on closure and postclosure care of the landfill,
-73-
COUNTY OF HAWAII
Dotes to the Basic Financial Statements
June 30, 2018
The remaining estimated liability of $5,225,000 is included in the government -wide statement
of net position. During the year ended June 30, 2015, $ 174,000 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'uanahul u In May 1993, the County contracted with a private company to construct and
operate a new landfill on County land at Pu'uanahulu in west Hawaii, The present contract
calls for County employees to perform the daily operations of the landfill, and for the private
company to retain the overall management as well as perform all construction work on the
landfill cells, Under the terms of the contract, the County has no responsibility for
remediation, closure or postclosure care. Accordingly, no liability for this landfill is included
in the County's financial statements,
Financial Assurance For fiscal year 2015, the County has provided for financial resources
that will be available to provide for closure, postclosure care and remediation or containment
of environmental hazards at the above landfills, except Pu'uanahulu, The Environmental
Protection Agency's financial assurance rules include a local government financial test
consisting of a financial component, a public notice component, and a recordkeeping
component. Local governments are required to satisfy each of the three components to pass
the annual test. Management believes that the County has satisfied each of the components of
the local government financial assurance requirements,
In fiscal year 2013, the County closed its two metal salvage facilities located near the Hilo and
1-.' ealakehe Transfer Stations, State law requires the County to perform necessary closure
activities, including, but not limited to, the removal of all remaining solid waste and
performing appropriate site assessments and remedial activities, The estimated liability
($13,144,000) for the remediation costs associated with these closures is included in the
County's financial statements and is based on closure plans prepared by a science and
engineering consultant contracted by the County, and the current value of costs expected to be
incurred, The liability could change over time due to inflation or deflation, changes in
technology, or changes in laws and regulations governing the remediation effort.
COUNTY of HAWAII
Notes to the Basic Financial Statements
June 30, 2018
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 2010 Series B bonds were issued as bonds designated as "Recovery Zone Economic
Development Bonds" under the American Recovery and Reinvestment Act of 2009, The
County will receive a cash subsidy payment from the United States Treasury equal to 45% of
the interest payable on the Series B bonds,
The following is a summary of general obligation bond transactions reported in the
governmental activities section of the government -wide statement of net position for the
County for the fiscal year ended June 30, 2018:
Bonds
Issue
Bond Balance
Bond Balance
Due Within
Authorized
Amount
July 1. 2017
Issues
Retirements
June 30, 2018
One Year
2007 Series A
$ 85,000,000
$ 4,055,000
$
($ 4,055,000)
$ --
$ --
2007 Series B
20,820,000
4,950,000
(4,950,000)
--
2007 Series C
10,787,388
5,504,568
(3,159,909)
2,344,659
--
2008 Series A
50,000,000
4,675,000
(2,280,000)
2,395,000
2,395,000
2010 Series A
26,493,750
4,177,500
(1,335,000)
2,842,500
1,387,500
2010 Series B
18,506,250
16,020,000
(896,250)
15,123,750
933,750
2013 Series A
58,509,892
51,088,253
(44,500.749)
6,587,504
2212,378
2013 Series B
21,010,000
15,655,000
(1,950,000)
13,705,000
2,050,000
2013 Series C
18,470,000
15,365,000
(1,655,000)
13,710,000
1,730,000
2013 PI Series A
1,169,000
1,125,981
(22,400)
103,581
23,017
2016 Series A
99,620,000
99,620,000
99,620,000
--
2016 Series B
13,497,500
13,497,500
(1,100,000)
12,397,500
1. 140!)000
2016 Series C
44,835,000
44,835,000
44,835,000
3,545,000
2016 Series D
28,860,000
28,860,000
28,860,000
--
2016 Series 0
19,061,250
19,061,250
--
19,061,250
--
2016 Series F
10,040,000
10,040,000
--
(3,305,000)
6,73 5,000
3,345,000
2017 Series A
90,000,000
--
90,000,000
--
90,000,000
2,685,000
2017 Series B
2,540,000
2,540,000
2,540,000
2,540,000
2017 Series C
2,083,779
2,083,779
2,083,779
1,017,432
2017 Series D
43,475,000
43,475,000
--
43,475,000
--
2017 Series 0
685,000
685,000
(685,000)
--
665,463.809
338,530,052
138,783,779
(69,894,308)
407,419,523
25,004,077
Add unamortiz e d
premium
89,141.407
53,050,872
23,548,501
(12,275,808)
64,323,565
5.267284
$391.580.924 162,332,280 LS82.170,116) 30,271,361
COUNTY OF HAWAII
Dotes to the Basic Financial Statements
June 301, 2018
General obligation bonds payable reported in the governmental activities section on the
government -wide statement of net position at June 30, 2018 are comprised of the following
individual issues:
Public improvement (PI) and/or refunding bonds:
Interest
2007 Series C at 41.0% to 51.0%1, due through 2021
$ 2,344,659
2005 Series A at 4.0% to 61.0%1, due through 2018
21Y3951Y000
2010 Series A at 41.0% to 51.0%1, due through 2020
21Y542,500
2010 Series B at 3.335% to 6,1 %, due through 2030
151Y123,750
2013 Series A at 2.0% to 5.0%1, due through 2032
61Y587,504
2013 Series B at 3.0% to 5.0%1, due through 2023
131Y7051Y000
2013 Series C at 4.0% to 5.0%1, due through 2024
131Y7101Y000
2013 PI Series A at 2.75%1, due through 2045
1,103,581
2016 Series A at 31.0% to 51.0%1, due through 2035
991Y6201Y000
2016 Refunding Series B at 3.0% to 5,0%, due through 2026
121Y397,500
2016 Refunding Series C at 5.0%, due through 2027
44,5353000
2016 Refunding Series D at 5,0%, due through 2025
25,5603000
2016 Refunding Series Eat 2.0% to 5.0%, due through 2029
191Y061,250
2016 Taxable Series F at 1.2% to 1.55%1, due through 2019
61Y7351Y000
2017 Series A at 5.0%1, due through 2037
901Y0001Y000
2017 Refunding Series B at 3.0%, due through 2015
23540,000
2017 Refunding Series C at 4,0% to 5.0%, due through 2019
230533779
2017 Refunding Series D at 3,0% to 5.0%, due through 2032
43,475,000
Total general obligation bonds parable
Annual debt service requirements to maturityr for the above general obligation bonds are as
follows:
Fiscal year ending June 30:
2019
2020
2021
2022
2023
2024 —2028
2029 — 203 3
2034 —2038
2039 —2043
2044 —2048
2049
Total
Governmental Activities
Principal
Interest
$ 25,004,077
$ 18,512,986
231Y2001Y061
171Y452,509
2439923709
161Y351,526
26,406,0 84
15,111, 597
261Y457,516
131Y8361Y161
1331Y0051Y057
491Y979,549
91,195,732
231Y0731Y171
561Y6 57,6 50
51y6151y237
209,154
541Y764
2391Y573
231Y957
51,550 714
4C) 0
-76-
0
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 301, 2018
Refunded Bonds
2017 Series B in fiscal year 2018, the County issued $2,540,000 in refunding bonds as the
2017 Series B general obligation bond issue. The refunding bonds have a true interest cost of
1,118% and were issued to advance refund $2,535,000 of the total callable bonds outstanding
of the 2007 Series B general obligation bond issue,
The bonds refunded bore interest at a rate of 41,000°/x1, The par amount of $2,540,000 plus a
premium of $61,290, minus $11,104 in underwriting fees, insurance and other issuance costs
resulted in net proceeds of $2,590,186. 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 2007 Series B refunded bonds on August
7, 2017. 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 year will decrease by $59,258 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
$66,537,
2017 Series C Also, in fiscal year 2017, the County issued $21, 083,779 in refunding bonds as
the 2017 Series C general obligation bond issue, The refunding bonds have a true interest cost
of 1,142/o and were issued to advance refund $2,152,260 of the total callable bonds
outstanding of the 2007 Series C general obligation bond issue,
The bonds refunded bore interest at rates ranging from 4.000% to 4,250%. The par amount of
$21,0831,779 plus a premium of $192,944, minus $13,748 in underwriting fees, insurance and
other issuance costs resulted in net proceeds of $21,2621,975. 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 2007 Series C
refunded bonds on August 7, 2017, 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 two years will decrease by $86,305
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 $90,811,
COUNTY of HAWAII
Notes to the Basic Financial Statements
June 30, 2018
2017 Series D & E Also, in fiscal year 2018, the County issued $44,160,000 in refunding
bonds as the 2017 Series D and E general obligation bond issue. The refunding bonds have a
true interest cost of 2,515% and were issued to advance refund the $42,395,000 of the total
callable bonds outstanding of the 2013 Series A general obligation bond issue.
The bonds refunded bore interest rates of 5,000%, The par amount of $44,160,000 plus a
premium of $5,743,063, minus $219,603 in underwriting fees, insurance and other issuance
costs resulted in net proceeds of $49,683,460. 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 2013 Series A refunded bonds on
September 1, 2022. 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 fifteen years will decrease by
$3.,166.,915 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 $2,724,335.
Bond Premiums
At June 30, 2018, total unamortized bond premiums were $64,323,565, 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 $543,1 million in general obligation bonds
to finance both specified and unspecified capital improvement projects. At June 30, 2018,
$198,4 million was not yet issued,
Subsequent Events On September 4, 2018, the County Council authorized the issuance
of $3,699,000 in general obligation bonds for the County to finance specified capital
improvement projects. 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,
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 301, 2018
General Obligation Bond Anticipation Notes
The following is a summary of general obligation bond anticipation note transactions reported
in the government -wide statement of net position for the County for the fiscal year ended June
30, 2018:
State Revolving Fund Loans
The County has obtained loans to assist in financing mandated wastewater projects from the
State Water Pollution Control Revolving Fund (SRF), The purpose of this revolving fund is to
provide low-interest, long-term loans and other financial assistance to the four counties in the
state to finance construction of wastewater projects. The County has eleven projects approved
for funding with these loans.
The schedule below shows the County's SRF transactions for the fiscal year ended June 30,
2018:
Loans
Issue
Balance
Balance
Note No,
Amount
July 1, 2017 Issues
Retirements June 30 2018
Series D, Note R-5
$ 5,000,000
$ 5,000,000 $
$(5,000,000) S
fieri es 1D , R
5,000,000
5,000,000
(5,000,000)
Series D, Note R-7
1,000,000
1,000,000
(1,000,000)
Series D, Note R-8
1,000,000
1,000,000 --
(1,000,000)
Series D, Note R-9
1,000,000
1,000,000 --
(1,000,000)
Series D, Note R -I 0
1,000,000
1,000,000 --
(1,000,000)
Series D, Note R-11
500,000
500,000
(500,000)
Series D, Note R-12
500,000
500,000 --
(500,000)
Series D, Note R-15
15,000,000
15,000,000
(15,000,000)
Series D, Note R-16
8,000,000
8,000,000 --
(8,000,000)
Series D, Note R-17
2,000,000
2,000,000
(2,000,000)
Series D, Note R-18
5,000,000
5,000,000
(5,000,000)
Series D, Note R-19
10,000,000
10,000,000 --
(10,000,000)
Series D, Note R-20
4,800,000
4800,000
(4,800,000)
21,162,934
$ 59, 800,000
$ 59.800.000
$ (59,800,0001
State Revolving Fund Loans
The County has obtained loans to assist in financing mandated wastewater projects from the
State Water Pollution Control Revolving Fund (SRF), The purpose of this revolving fund is to
provide low-interest, long-term loans and other financial assistance to the four counties in the
state to finance construction of wastewater projects. The County has eleven projects approved
for funding with these loans.
The schedule below shows the County's SRF transactions for the fiscal year ended June 30,
2018:
Loans
Approved
Loan Balance
Loan Balance
Due Within
Authorized
Amount
July I, 2017
Additions
Retirements
June 30 2018
One Year
Cesspool
Conversion
$ 8,363,773
$ 4,238,650
$
$ (436,794)
$ 3,801,856
$ 438,981
Honoka'a LCC
4,513,158
2,689,276
(179,283)
2,509,993
180,181
Queen
Lili'uokalani
9,421,732
6,508,120
(485,832)
6,022,288
488,265
Kalaniana'ole
7,847,045
5,296,111
519,371
(318,718)
5,496,764
354,255
Kealakehe
VW TPAU
21,162,934
12,619,826
3,084,980
(710,445)
14,994.362
865,587
North Kona
3,454,500
923,908
731,696
1,655,604
39,502
Kealakehe
Effluent Reuse
6,158,687
349,386
369,525
718.911
5H Landfill
Closure
678,370
448,092
448,092
$61,600,199 P $ 5.153,664 $(2,131,072) $35,647,870 P
COUNTY OF HAWAII
Dotes to the Basic Financial Statements
June 301, 2018
The remaining loans bear interest at 01,25% to 1,0% exclusive of a 01,25% to 0.75% loan fee,
and require payments through fiscal year 2040.
Debt service to matuntyT for disbursements to date on these projects are as follows:
Governmental Activities
Fiscal year ending June 30:
2019
2020
2021
2022
2023
2024 2025
2029 2033
2034 2035
2039 2040
Total
Princi al
Interest
$ 2,366,771
$ 264,504
2,445,115
2481Y008
23479,667
2291Y313
234903296
210,643
21Y5011Y061
1911Y806
11,980,434
706,356
8,761,256
248,543
23562,359
291Y990
57.881
478
Other General Long -Term obligations
$35,647, 870 $22129641
The following is a summary of other general long-term obligations transactions for the fiscal
year ended June 30, 2018:
Net of new claims liability and existing claims resolved at less than previous estimate,
** As restated, for impact of GASB 75.
0
**Balance
Balance
Due Within
ul T 1 2017
Additions*
Payments
June 30 2018
One Year
Governmental activities:
Compensated absences
$39,485,902
$15,163,120
$(13,512,043)
$41,136,979
$1o,153,091
Claims and judgments
(see Note 12)
141Y435,693
71Y550,257
(3,550,541)
1 s,135,409
31Y561,859
Capital leases
(see Note 8)
61Y5651Y580
31Y8091Y249
(2,262,252)
8,112,577
2,463,618
Landfill costs payable
(see Note 9)
291Y5231Y000
1,045,197
(561,197)
301Y0071y000
4321Y012
Pollution remediation
(see Note 9)
15,542,639
7901Y084
(3,188,464)
131Y144,259
51Y3001Y000
Other post employment
benefit obligation
(see Note 13)
38428242312
626292988
39124542300
Total
$490,377,126
0
$(23,374,497)
$501,990,524
Net of new claims liability and existing claims resolved at less than previous estimate,
** As restated, for impact of GASB 75.
0
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2015
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, 2015 includes $30,639,530, which is
reserved for principal payments on general obligation bonds and $2,756,951, 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 I<Aa'imano
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
$535,105, 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 $7,526 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.
The following is a summary of the Project's bond payable transactions for the fiscal year
ended June 30, 2015:
Balance at July 1, 2017
Deductions
Balance at June 30, 2015
Less current portion
Note payable, net of
current portion
$ 651,747
59.251)
592,496
(62,622)
529.574
The following is a summary of the annual maturities for the enterprise fund bond payable:
Fiscal year ending June 30:
2019
2020
2021
2022
2023
2024-2026
Business-tv-De Activities
Princlj2al
Interest
$ 621622
$ 29,533
66,156
25,569
69,952
21,997
7311932
17,905
7511139
1311550
241,665
13,476
Total $592A96 $1221360
COUNTY OF HAWAII
Nates to the Basic Financial Statements
June 30, 2018
On October 29, 2012, the County assumed the loan of its lessee Ouli Ekahi Partnership with
the Hawaii Housing Finance and Development Corporation in the amount of $478,430, The
loan is non-interest bearing and matures on February 27, 2041, In exchange, the County
assumed ownership of the Ouli Ekahi project which consists of a 33 single family affordable
rental housing project,
The following is a summary of enterprise fund loan payable transactions for the fiscal year
ended June 30, 20 18 :
Balance at July 1, 2017
$272,902
Deductions
(58,393)
Balance at June 30, 2018
214,509
Less current portion
(29,273)
Loan payable, net of
16,500
current portion
$ 185,236
The following is a summary of the annual maturities for the enterprise fund loan payable:
Total $214,5 O9
Special Assessment Bonds
The County has issued general obligation bonds on behalf of Improvement District No. 18 for
water improvements (see Note 4), These bonds were then refunded by a portion of the 2013
Series A Bonds that were issued, The Improvement District is responsible for the payment of
the debt service on these bonds, but the County remains liable because they are general
obligations of the County, The improvement district's share of the refunded bonds matures
annually through 2027 and bear interest at the previous rates of 4.375% to 4,75%. Total
general obligation bonds payable included in the government -wide statement of net position
were $994,665 at June 30, 2018.
The County has also issued general obligation bonds on behalf of Improvement District No, 19
for water improvements (see Note 4). The Improvement District is responsible for the payment
of the debt service on these bonds, but the County remains liable because they are general
MIMM
Business -type Activities
Fiscal year ending June 30:
Principal
2019
$ 29,273
2020
16,500
2021
16,500
2022
16,500
2023
16,500
2024 2028
82,500
2029 2031
36,736
Total $214,5 O9
Special Assessment Bonds
The County has issued general obligation bonds on behalf of Improvement District No. 18 for
water improvements (see Note 4), These bonds were then refunded by a portion of the 2013
Series A Bonds that were issued, The Improvement District is responsible for the payment of
the debt service on these bonds, but the County remains liable because they are general
obligations of the County, The improvement district's share of the refunded bonds matures
annually through 2027 and bear interest at the previous rates of 4.375% to 4,75%. Total
general obligation bonds payable included in the government -wide statement of net position
were $994,665 at June 30, 2018.
The County has also issued general obligation bonds on behalf of Improvement District No, 19
for water improvements (see Note 4). The Improvement District is responsible for the payment
of the debt service on these bonds, but the County remains liable because they are general
MIMM
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 301, 2018
obligations of the County. The improvement district's share of the refunded bonds matures
annually through 2048 and bear interest at the previous rates of 2.75%. Total general
obligation bonds payable included in the government -wide statement of net position were
$1,103,5 81 at June 301, 2018,
The bonds are secured by a first lien on the land benefited by the improvements, and are to be
repaid from the annual assessments levied against the owners of the land, The County acts as
an agent for the property owners within the improvement districts to collect assessments
receivable, forward payments to bond -paying agents at appropriate dates and, if required,
administer foreclosure proceedings,
The following is a summary of bond transactions for Improvement District No, 18,
Coastview/Wonderview Water Improvements, and No, 19, Kona Ocean View Properties
Subdivision for the fiscal year ended June 30, 2018:
Balance at July 1, 2017 $2,197,435
Deductions 99.189)
Balance at June 301, 2018 $2,098 246
The following is a summary of the annual maturities for the improvement district general
obligation bonds:
Fiscal year ending June 30
2019
2020
2021
2022
2023
2024 2028
2029 2033
2034 2038
2039 2043
2044 2048
2049
PrinciD al Interest
$ 103,379
$ 74,470
107,752
70,001
112,317
65,336
117,083
60,466
122,057
55,382
692,918
192,456
159,482
105,150
182,650
81,663
209,185
54,764
239,573
23,957
51,850
713
Total $2,098,246
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2018
11. COMMITMENTS AND CONTINGENCIES
Contractual commitments — Contractual commitments for capital projects, expenses, and
supplies at June 30, 2018, 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
Capital projects fund
Bond redemption fund
4,546,560
76,949,066
Nonmajor funds 6,913,235
$ 88.408.861
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 mi the normal
course of its operations, A liability for probable losses is included on the government -wide
statement of net position (see Note 12). Although the outcome of the various claims and
lawsuits is not presently determinable, in the opinion of the County's Corporation Counsel,
the resolution of such matters will not have a material adverse effect on the financial condition
of the County.
ADA compliance — The County entered into a stipulated agreement, filed on June 4, 1995,
which relates to the Department of Parks and Recreation (Parks), The agreement required
Parks to establish practices, policies and procedures regarding its programs, and prepare a
transition plan by the middle of the year 2000, The self-evaluation and transition plan for
programs, practices and procedures 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 repairs was $17.5 million, with another $4 million of
federal funding anticipated through community development block grants over the next 2
years, The Department of Public works has requested an additional $2 million a year for the
other County ADA facilities' project, Because of severe disparities that surfaced between the
original ADA projects' scoping and construction estimates and actual scopes and costs, as
ME
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 301, 2018
well as time/delivery issues that came into play because of necessary permits and reviews, and
design professionals' costs that weren't factored into the effort, the County sought relief from
the Court in the form of both a time extension and reprioritization of sites, As a result, the
County obtained approval of a modified 4 -year plan wherein accessibility improvements
would be required to be completed by December 31, 2016 at 35 remaining park sites, At this
time, a new target completion date is being discussed, The balance of the inaccessible sites
would be deferred indefinitely pending improvement/enhancement projects that would
inherently trigger accessibility improvements due to the nature of scoping and applicable
ADA requirements. of the 35 remaining parks requiring accessibility improvements, 15 have
been completed, 3 are in construction though substantially completed, 7 are in design, and 10
are either pending consultant selection or finalization of contract, A project that was
previously deferred was placed back into the plan in the pending consultant selection
category. The County has currently encumbered or spent more than $17,6M on these projects.
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) prior to the development of the
modified four year plan, 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. Also, Parks has a Recreation Specialist who reviews
and investigates requests for reasonable accommodations, and recommends specific actions
on those requests,
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 obtains insurance for property (including coverage on a high deductible basis for
natural disasters of hurricane, flood and earthquake). It also purchases insurance for flood on
selected structures, medical malpractice for emergency medical services, aviation liability for
helicopter operations, retired senior volunteers liability coverage, auto liability for mass transit
buses and privately owned police vehicles, and auto physical damage coverage on County
Police fleet vehicles and the Kohala Ranch fire truck, The County also obtains property
coverage on several County housing projects (Kula'imanol, ouli Ekahi and Ulu Wini). 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 general
liability, the majority of its vehicles as well as for all other exposure including workers'
compensation, As such, emphasis is placed on claims management and safety/risk control to
mitigate loss costs, The liability for claims and judgments is reported on the government -wide
statement of net position and the majority will be liquidated from the County's general fund,
COUNTY OF HAWAII
Dotes to the Basic Financial Statements
June 30, 2018
Liabilities are reported when it is probable that a loss has occurred and the amount of that loss
can be reasonably estimated. These losses include an estimate of claims that have been
incurred but not reported IBNR) . Claim liabilities, including IBNR., are based on the
estimated ultimate cost of settling the claims, and include incremental costs for the hiring of
special counsel and expert witnesses, Claims liabilities are estimated by a case-by-case
review of all claims and the application of historical experience to outstanding claims,
Estimates of IBNR are based on historical experience, The liability for claims and judgments
is reported on the government -wide statement of net position, At June 30, 2015, the amount
of this liability was $18,135,409, This is the County's best estimate based on available
information. Changes in the reported liability since July 1, 2016 are given below,
Balance at July 1, 2016
Incurred claims (including IBNR)
Claim payments
Balance at June 30, 2017
Incurred claims (including IBNR)
Claim payments
Balance at June 30, 2018
General
workers'
Total
Liabili
Compensation
Liabili
$ 2149011086
$ 11,369,410 $
13,559,496
19911475
41278,619
4147511097
(395,362}
(3,506,538)
(3,901.900}
$ 2294202 202
12 141 49J $
1411435.693
(1771,100)
71727,357
715501257
(219.379)
(3.631.162)
(3.850.541)
& 1,897,723 $ 162371656 $ 18,135409
`Net of new claims liability and existing claims resolved at less than previous estimate.
13. EMPLOYEE BENEFIT PLANS
Pensions Employees' Retirement System of the State of Hawaii
Pension Plan Description - All eligible employees of the State and counties are provided with
pensions through a cost-sharing multiple -employer defined benefit pension plan administered
by the Employees' Retirement System of the State of Hawai'i (ERS). Benefit terms,
eligibility, and contribution requirements are established by HRS Chapter 88 and can be
amended through legislation. The ERS issues a publicly available financial report that can be
obtained at ERS's website: http://ers.ehawait.gov/.
Benefits Provided - The ERS provides retirement, disability, and death benefits that are
covered by the provisions of the noncontributory, contributory, and hybrid retirement plans.
The three plans provide a monthly retirement allowance equal to the benefit multiplier
(generally 1.25% or 2%) multiplied by the average final compensation multiplied by years of
credited service. The benefit multiplier decreased by 0.25% for new hybrid and contributory
plan members hired after June 30, 2012. Average final compensation is based on the five
highest paid years of service excluding the payment of salary in lieu of vacation for members
hired after June 30, 2012. For those hired between January 1, 1971 and June 30, 2012, AFC is
based on the three highest paid years of service excluding the payment of salary in lieu of
vacation. If the employee was hired prior to January 1, 1971, the AFC is the average salary
-86-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2018
earned during the five highest paid years of service, including the payment of salary in lieu of
vacation, or three highest paid years of service, excluding the payment of salary in lieu of
vacation,
For members hired before July 1, 2012, the original retirement allowance is increased by 2.5%
each July 1 following the calendar year of retirement. This cumulative benefit is not
compounded and increases each year by 2.5% of the original retirement allowance without a
ceiling (2,5°/0 of the original retirement allowance the first year, 5.0% the second year, 7.5%
the third year, etc.), For members hired after June 30, 2012 the post-retirement annuity
increase was decreased to 1,5% per year.
Retirement benefits for certain groups, such as police officers, firefighters, some investigators,
sewer Workers, judges, and elected officials, vary from general employees,
Noncontributory Plan
Retirement Benefits - General employees' retirement benefits are determined as 1,25% of
average final compensation multiplied by the years of credited service, Employees with
10 years of credited service are eligible to retire at age 62. Employees with 30 years of
credited service are eligible to retire at age 55,
Disability Benefits - Members are eligible for service -related disability benefits
regardless of length of service and receive a lifetime pension of 35% of their average
final compensation. Ten years of credited service is required for ordinary disability.
Ordinary disability benefits are determined in the same manner as retirement benefits but
are payable immediately, without an actuarial reduction, and at a minimum of 12.5% of
average final compensation.
Death Benefits - For service -connected deaths, the surviving spouse/reciprocal
beneficiary receives a monthly benefit of 30% of the average final compensation until
remarriage or re-entry into a new reciprocal beneficiary relationship. Additional benefits
are payable to surviving dependent children up to age 18. If there is no spouse/reciprocal
beneficiary or dependent children, no benefit is payable,
Ten years of credited service is required for ordinary death benefits, For ordinary death
benefits, the surviving spouse/reciprocal beneficiary (until remarriage/ reentry into a new
reciprocal beneficiary relationship) and dependent children (up to age 1 S) receive a
benefit equal to a percentage of member's accrued maximum allowance unreduced for
age or, if the member was eligible for retirement at the time of death, the surviving
spouse/reciprocal beneficiary receives 100% joint and sur nTor lifetime pension,
COUNTY OF HAWAII
Nates to the Basic Financial Statements
June 30, 2018
Contributory Plan for Employees Hired Prior to July 1. 2012
Retirement Benefits - General employees' retirement benefits are determined as 2% of
average final compensation multiplied by the years of credited service, General
employees with 5 years of credited service are eligible to retire at age 55.
Police and firefighters' retirement benefits are determined as 2,5% of average final
compensation for each year of service up to a maximum of 80%, Police and firefighters
with 10 years of credited service are eligible to retire at age 55.
Disability Benefits - Members are eligible for service -related disability benefits
regardless of length of service and receive a lifetime pension of 50% of their average
final compensation. Ten years of credited service is required for ordinary disability,
Ordinary disability benefits are determined as 1.75% of average final compensation
multiplied by the years of credit services and are payable immediately, without an
actuarial reduction, and at a minimum of 30% of average final compensation.
Death Benefits - For service -connected deaths, the surviving spouse/reciprocal
beneficiary receives a lump sum payment of the member's contributions and accrued
interest plus a monthly benefit of 50% of the average final compensation until remarriage
or re-entry into a new reciprocal beneficiary relationship, If there is no surviving
spouse/reciprocal beneficiary, surviving children (up to age 18) or dependent parents are
eligible for the monthly benefit. If there is no spouse/reciprocal beneficiary or dependent
children/parents, the ordinary death benefit is payable to the designated beneficiary,
Ordinary death benefits are available to employees who were active at time of death with
at least 1 year of service. Ordinary death benefits consist of a lump sum payment of the
member's contributions and accrued interest plus a percentage of the salary earned in the
12 months preceding death, or 50% Joint and Survivor lifetime pension if the member
was not eligible for retirement at the time of death but was credited with at least 10 years
of service and designated one beneficiary, or 100% Joint and Survivor lifetime pension if
the member was eligible for retirement at the time of death and designated one
beneficiary,
Contributory Plan for Employees Hired After June 30, 2012
Retirement Benefits — General employees' retirement benefits are determined as 1,75%
of average final compensation multiplied by the years of credited service, General
employees with 10 years of credited service are eligible to retire at age 60.
Police and firefighters' retirement benefits are determined as 2,25% of average final
compensation for each year of service up to a maximum of 80%, Police and firefighters
with 10 years of credited service are eligible to retire at age 60,
s: am,
COUNTY of HAWAII
Dotes to the Basic Financial Statements
June 30, 2018
Disability and Death Benefits - Members are eligible for service -related disability
benefits regardless of length of service and receive a lifetime pension of 50% of their
average final compensation plus refund of contributions and accrued interest, Ten years
of credited service is required for ordinary disability, Ordinary disability benefits are
1,75% of average final compensation for each year of service for police and firefighters
and are payable immediately, without an actuarial reduction, at a minimum of 30% of
average final compensation.
Death benefits for contributory plan members hired after June 30, 2012 are generally the
same as those for contributory plan members hired June 30, 2012 and prior.
Hvbrid Plan for Emolovees Hired Prior to Tule 1. 2012
Retirement Benefits - General employees' retirement benefits are determined as 2% of
average final compensation multiplied by the years of credited service. General
employees with 5 years of credited service are eligible to retire at age 62. General
employees with 30 years of credited service are eligible to retire at age 55.
Disability Benefits - Members are eligible for service -related disability benefits
regardless of length of service and receive a lifetime pension of 35% of their average
final compensation plus refund of their contributions and accrued interest. Ten years of
credited service is required for ordinary disability. Ordinary disability benefits are
determined in the same manner as retirement benefits but are payable immediately,
without an actuarial reduction, and at a minimum of 25% of average final compensation.
Death Benefits - For service -connected deaths, the surviving spouse/reciprocal
beneficiary receives a lump sum payment of the member's contributions and accrued
interest plus a monthly benefit of 50% of the average final compensation until remarriage
or re-entry into a new reciprocal beneficiary relationship, If there is no surviving
spouse/reciprocal beneficiary, surviving children (up to age 1 S) or dependent parents are
eligible for the monthly benefit. If there is no spouse/reciprocal beneficiary or dependent
children /parents, the ordinary death benefit is payable to the designated beneficiary.
Ordinary death benefits are available to employees who were active at time of death with
at least 5 years of service. Ordinary death benefits consist of a lump sum payment of the
member's contributions and accrued interest multiplied by 150°/x, or 50% Joint and
Survivor lifetime pension if the member was not eligible for retirement at the time of
death but was credited with at least 10 years of service and designated one beneficiary, or
100% Joint and Survivor lifetime pension if the member was eligible for retirement at the
time of death and designated one beneficiary.
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 301, 2018
Hybrid Plan for Employees Hired After June 30.2 12
.
Retirement Benefits - General employees' retirement benefits are determined as 1.75% of
average final compensation multiplied by the years of credited service. General
employees with 10 years of credited service are eligible to retire at age 65, Employees
with 30 years of credited service are eligible to retire at age 601, Sewer workers, water
safety officers, and EMTs may retire with 25 years of credited service at age 551,
Disability and Death Benefits - Provisions for disability and death benefits generally
remain the same except for ordinary death benefits. ordinary death benefits are available
to employees who were active at time of death with at least 10 years of service, ordinary
death benefits consist of a lump sum payment of the member's contributions and accrued
interest multiplied by 120%, or 50% Joint and Survivor lifetime pension if the member
was not eligible for retirement at the time of death and designated one beneficiary, or
100% Joint and Survivor lifetime pension if the member was eligible for retirement at the
time of death and designated one beneficiary,
Contributions - Contributions are established by HRS Chapter 88 and may be amended
through legislation. The employer rate is set by statute based on the recommendations of the
ERS actuary resulting from an experience study conducted every five years, Since July 1,
20051, the employer contribution rate is a fixed percentage of compensation, including the
normal cost plus amounts required to pay for the unfunded actuarial accrued liabilities. The
contribution rates for fiscal year 2018 were 28.00% for police and firefighters and 18,0% for
all other employees, Contributions to the pension plan from the County for the year ended
June 301, 2018, 20171, and 2016 were $411,5621,933, $36,157,981, and $34,013,001.,
respectively,
The employer is required to make all contributions for members in the noncontributory plan.
For contributory plan employees hired prior to July 1, 2012, general employees are required to
contribute 7.8% of their salary and police and firefighters are required to contribute 12.2% of
their salary, For contributory plan employees hired after June 30, 2012, general employees are
required to contribute 9,8% of their salary and police and firefighters are required to contribute
14.2% of their salary. Hybrid plan members hired prior July 1, 2012 are required to contribute
61,0% of their salary, Hybrid plan members hired after June 30, 2012 are required to contribute
81,0% of their salary,
Pension liabilities, pension expense, and deferred outflows of resources and deferred
inflows of resources related to pensions At June 30, 2018, the County reported a liability of
$609,904,199 for its proportionate share of the net pension liability. The net pension liability
was measured as of June 301, 20171, and the total pension liability used to calculate the net
pension liability was determined by an actuarial valuation as of that date. The County's
proportion of the net pension liability was based on the actual employer contributions to the
pension plan relative to the contributions of all participating employers, At June 30, 2017, the
-90-
COUNTY of HAWAII
Dotes to the Basic Financial Statements
June 30, 2018
County's proportion was 4,71 %, which was an increase of .09% from its proportion measured
as of June 30, 2016,
For the year ended June 30, 2018, the County recognized pension expense of $92,511,891, At
June 30, 2018, the County reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources:
Differences between expected and actual experience
Net difference between projected and actual investment
earnings on pension plan investments
Changes in assumptions
Changes in proportion and differences between employer
contributions and proportionate share of contributions
Deferred Deferred
Outflows Inflows of
of Resources Resources
$ 25,210,950 $ 4,633,386
2,012,081
1001139511484
18,917,862 511696,826
County contributions subsequent to the measurement date 41,562,933
Total
$41,562,933 reported as deferred outflows of resources related to the County's contributions
to the pension plan subsequent to the measurement date will be recognized as a reduction of
the net pension liability in the fiscal year ended June 30, 2019,
Other amounts reported as deferred outflows of resources and deferred inflows of resources
related to pensions will be recognized in pension expense as follows:
Net Deferred
Outflows (Inflows
Fiscal Year Ending June 30,
of Resources
2019
$ 321,4631,241
2020
45,010,605
2021
37,910,320
2022
15,213,292
2023
1.5 84.545
$ 1321182 003
Actuarial assumptions —The total pension liability in the June 30, 2017 actuarial valuation
was determined using the following actuarial assumptions, applied to all periods included in
the measurement:
Inflation 2.50%
Payroll growth rate 3.50% per annum
_91_
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2015
Salary increases 3,50% - 7.00% including inflation
Investment rate of return 7.00% per annum, including inflation
Cost of living adjustments 21150% / 1.50%
Mortality rates used in the actuarial valuation as of Julie 30, 2017 were based on the
following:
Active members — Multiples of the RP 2014 mortality table for active employees based
on the occupation of the member.
Healthy retirees —The 2016 Public Retirees of Hawai'i mortality table, generational
projection using the BB projection table from the year 2016 and with multipliers based on
plan and group experience.
Disabled retirees — Base Table for healthy retiree's occupation, set forward 5 years,
generational projection using the BB projection table from the year 2016, Minimum
mortality rate of 3,5% for males and 2.5% for females.
The actuarial assumptions used in the June 30, 2017 valuation were based on the results of an
actuarial experience study for the five-year period ending June 30, 2015. The major changes
to assumptions resulting from the 2015 actuarial experience study were (1) a decrease in the
investment return assumption from 7.65% to 7.00% and (2) the mortality assumptions were
modified to assume longer life expectancies as well as to reflect continuous mortality
improvement. ERS updates their experience studies every five years.
The long-term expected rate of return on pension plan investments was determined using a
building-block method in which best -estimate ranges of expected future real rates of return
(expected returns, net of pension plan investment expense and inflation) are developed for
each major asset class. These ranges are combined to produce the long-term expected rate of
return by weighting the expected future real rates of return by the target asset allocation
percentage and by adding expected inflation,
The target allocation and best estimates of geometric rates of return for each major asset class
are summarized in the following table:
`Uses an expected inflation rate of 2.25%
-92-
Long -Term
Long -Term
Strategic Allocation
Target
Expected Rate of
Expected Real
(Risk -Based Classes)
Allocation
Return`
Rate of Return
Broad growth
63.00%
5.05%
5.50%
Crisis risk offset
20100°/0
5.35%
3,10%
Real return
101100%
5.50%
3.55%
Principal protection
7.00%
2.45%
01120%
1 nn nn0/fl
`Uses an expected inflation rate of 2.25%
-92-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 301, 2018
Discount rate — The discount rate used to measure the total pension liability was 71,00°/x1, which
was the same rate used at the prior measurement date, The projection of cash flows used to
determine the discount rate assumed that employee contributions will be made at the current
contribution rate and that contributions from the County will be made at statutorily required
rates, actuarially determined, Based on those assumptions, the pension plan's fiduciary net
position was projected to be available to make all projected future benefit payments of current
active and inactive employees, Therefore, the long-term expected rate of return on pension
plan investments was applied to all periods of projected benefit payments to determine the
total pension liability.
Sensitivity of the County's proportionate share of the net pension liability to changes in the
discount rate — The following presents the County's proportionate share of the net pension
liability calculated using the discount rate of 7.00%1, as well as what the County's
proportionate share of the net pension liability would be if it were calculated using a discount
rate that is 1 -percentage -point lower (6.00%) or 1 -percentage -point higher (8,00%) than the
current rate:
1 % Decrease Current Discount I % Increase
(6,00%) Rate (7.00%) (8.00%)
County's proportionate share of
the net pension liability 800,723,468 X609,904,199 $ 452,563,954
Pension plan fiduciary net position — Detailed information about the pension plan's fiduciary
net position is available in the separately issued ERS Comprehensive Annual Financial Report
that includes financial statements and required supplementary information.
Payables to the pension plan — At June 30, 2018, the annual amount payable to the ERS
totaled $5,481,792, which represents the employer contribution for the second half of the
month of June 20181, as required by HRS, and the excess pension cost under Act 1531SLH 2 -
12 REFER HRS Section 88-1 00 for fiscal year ended June 30, 20 18.
Other Pension Plans - County of Hawaii Bandsmen Pension System
The County also sponsors a nonqualified, governmental single employer defined benefit
pension plan for members of the County Band (County of Hawaii Bandsmen Pension
System) who are or were ineligible for benefits under ERS and whose employment began
before June I, 19901, Under HRS Chapter 88, the County Pension provides retirement benefits
that are computed based on the average annual salary during the last 10 years of employment
with a minimum pension amount of $50 per month. There are no assets accumulated in a trust
for the payment of benefits.
As of the valuation date of June 301, 20171, there were 23 inactive employees or beneficiaries
receiving benefits; 9 inactive employees not yet receiving benefit payments; and 8 active
members,
-93 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2018
Pension liabilities, pension expense, and defeated outflows of resources and defeated
inflows of resources aerated to pensions At June 30, 2018, the County reported a liability of
$1,087,972. The total pension liability was measured as of June 30, 2018 based on an
actuarial valuation as of June 30, 2017,
For the year ended June 30, 2018, the County recognized pension payments of $58,808 and a
deferred inflow of resources of $49,9241.,
Actuarial assumptions The total pension liability in the June 30, 2017 actuarial valuation
was determined using the following actuarial assumptions, applied to all periods included in
the measurement:
Inflation 2150%
Payroll growth rate 3.50% per annum
Salary increases 3,50%, including inflation
Cost of living adjustments 2.50%
Except for the salary increase and retirement rate assumptions, all other demographic
assumptions are the same as those used to measure the total pension liability under the ERS
plan,
The discount rate used to measure the County's total pension liability was 3.56% based on the
daily municipal bond rate closest to but not later than the measurement date of the Fidelity
"20 -Year Municipal GO AA Index".
The following presents the County's total pension liability calculated using the discount rate
of 3,56%, as well as what the County's total pension liability would be if it were calculated
using a discount rate that is I -percentage -point lower (2,56°/0) or 1 -percentage -point higher
(4,56%) than the current rate:
I % Decrease Current Discount 1 % Increase
(2.56%) Rate (3.56%) (4,56%)
County's total pension liability $ 1 331.977 $ 1 146780 $_997366
Schedule of Changes in Total Pension Lability
Measurement year ending June 30, 2018
Total Pension Liability
Benefit Payments $58-808
Net Change in Total Pension Liability (58,808)
Total Pension Liability Beginning 1.146.750
Total Pension Liability Ending $ 1,087,972
IDEA E
COUNTY OF HAWAII
Dotes to the Basic Financial Statements
June 30, 2018
Post -Retirement Benefits
In addition to providing pension benefits, the County is required by state statute (HRS Chapter
87A) to contribute to the Hawaii Employer -Union Health Benefits Trust Fund (the EUTF).
The EUTF is an agent, multiple -employer defined benefit plan providing certain healthcare
and life insurance benefits to all qualified retirees, active employees, their dependents and
their beneficiaries.
Benefits Provided Chapter 87A of the HRS grants the authority to establish and amend the
benefit terms to the board of trustees of the EUTF. The EUTF currently provides medical,
prescription drug, dental, vision, chiropractic, supplemental medical and prescription drug,
and group life insurance benefits for retirees and their dependents, The following table
provides a summary of the number of employees covered by the benefit terms as of July 1,
2017.
Inactive employees or beneficiaries currently receiving benefits 1,595
Inactive employees entitled but not yet receiving benefit payments 218
Active employees 2.394
4,207
Contributions — The County's contribution levels are established by Chapter 87A of the HRS.
For the fiscal year ended June 30, 2015, the County was required to contribute a minimum
amount equal to at least 50% of the annual required contribution (ARC), as determined by an
actuary retained by the board of trustees of the EUTF, The county will be required to
contribute 100% of the ARC starting in fiscal year 2019, The ARC represents a level of
funding that is sufficient to cover, 1) the normal cost, which is the cost of the other
postemployment benefits attributable to the current year of service; and 2) an amortization
payment, which is a catch-up payment for past service costs to fund the unfunded actuarial
accrued liability over the next thirty years, For the fiscal year ended June 30, 2015,
contributions to the OPEB Plan form the County totaled $32,529,013 which resulted its an
average contribution rate of approximately 15.8% of covered -employee payroll,
For employees hired prior to July 1, 1996, the County pays the entire monthly healthcare
premium for employees retiring with 10 or more years of credited service, and 50% of the
monthly premium for employees retiring with fewer than 10 years of credited service. The
current (pay-as-you-go) premium costs are paid by the respective funds but the net other
postemployment benefit obligation is paid by the General Fund.
For employees hired after June 30, 1996, and who retire with fewer than 10 years of service,
the County makes no contributions, For those retiring with at least 10 years but fewer than 15
years of service, the County pays 50% of the retired employees' monthly Medicare or non -
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'
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2018
monthly Medicare or non -Medicare premium, For those retiring with over 25 years of service,
the County pays the entire healthcare premium,
For employees hired after June 30, 2001, and who retire with fewer than 10 years of service,
the County makes no contributions, For those retiring with at least 10 years but fewer than 15
years of service, the County pays 50% of the retired employees' monthly Medicare or non -
Medicare premium based on the self -plan. For employees hired after June 30, 2001, and who
retire with at least 15 years but fewer than 25 years of service, the County pays 75% of the
retired employees' monthly Medicare or non -Medicare premium; for those retiring with over
25 years of service, the County pays the entire healthcare premium.
For active employees, the employee's contributions are based upon negotiated collective
bargaining agreements. Employer contributions for employees not covered by collective
bargaining agreements and for retirees are prescribed by the HRS.
Net OPEB liability The County's net OPEB liability was measured as of July I, 2017, and
the total OPER liability used to calculate the net OPER liability was determined by an
actuarial valuation as of that date, There were no changes between the measurement date, July
1, 2017, and the reporting date, June 30, 2018, that are expected to have a significant effect on
the net OPEB liability,
Actuarial assumptions The total OPEB liability in the July 1, 2017 actuarial valuation was
determined using the following actuarial assumptions, applied to all periods included in the
measurement, unless otherwise specified:
Inflation
2.50%
Salary increases
3,50% - 7,00°/0, including inflation
Investment rate of return
71100%
Healthcare cost trend rates
PPO
Initial rates of 6,60%, 6.60% and 9,00%; declining to a
rate of 4,86% after 14 years
HMO
Initial rate of 9,00°/0; declining to a rate of 4,86% after
14 years
Part B & base monthly
Initial rates of 2,00% and 5.00%; declining to a rate of
contribution
4.70% after 14 years
Dental
3150%
Vision
2.50%
Life insurance
0.00%
Mortality rates used in the actuarial valuation as of July 1, 2017 were based on the following:
Active members Multiples of the RP 2014 mortality table for active employees based
on the occupation of the member,
-96-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2018
Healthy retirees The 2016 Public Retirees of Hawa"nmortality table, generational
projection using the BB projection table from the year 2016 and with multipliers based on
plan and group experience.
Disabled retirees Base Table for healthy retiree's occupation, set forward 5 years,
generational projection using the BB projection table from the year 2016. Minimum
mortality rate of 3.5% for males and 2.5% for females,
The actuarial assumptions used in the July 1, 2017 valuation were based on the results of an
actuarial experience study for the five-year period ending June 30, 2015,
The long-term expected rate of return on OPEB plan investments was determined using a
building-block method in which best -estimate ranges of expected future real rates of return
(expected returns, net of pension plan investment expense and inflation) are developed for
each major asset class. These ranges are combined to produce the long-term expected rate of
return by weighting the expected future real rates of return by the target asset allocation
percentage and by adding expected inflation.
The target allocation and best estimates of arithmetic rates of return for each major asset class
are summarized in the following table:
Strategic Allocation
(Risk -Based Classes)
Target
Allocation
Long -Term
Expected Real
Rate of Return
U.S. Equity
191100°/
5.50%
International Equity
19.00°/
7.00%
U.S, MEcrocap
7,00%
7.00%
Private Equity
10.00%
91125%
REITs
6.00%
51155°/
Core Real Estate
10.00°/
3,50%
Global Options
71100°/
5.50%
Core Bonds
31100%
1155%
Long Treasuries
7.00%
1.90%
Trend Following
71100°/
1,75%
TIPS
5.00%
0.50%
100.00%
Discount rate The discount rate used to measure the total OPEB liability was 7.00°/x. The
projection of cash flows used to determine the discount rate assumed that the County will fund
the recommended actuarially determined contribution, which is based on layered, closed
amortization periods, Based on those assumptions, the OPER plan's fiduciary net position is
projected to be available to make all projected future benefit payments of current plan
members. Therefore, the long-term expected rate of return on OPEB plan investments was
applied to all periods of projected benefit payments to determine the total OPEB liability.
-97-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2018
Changes in the Net OPEB Liability:
The following schedule presents the changes in the net OPEB liability for the fiscal year
ending June 30, 2018:
Balance at June 30, 2017
Changes for the fiscal year:
Service cost
Interest on the total OPEB liability
Employer contributions
Net investment income
Benefit payments
Administrative expense
Other
Increase (Decrease)
Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability
(a) (b) (a) -(b)
$ 459,025,992 $ 10432013680 $ 384,824,312
11,757,502
34,046,407
(17,054,987)
Net changes $ 28,748,922
Balance at June 30, 2015 $ 517,74 914
0 $ 391,454, 300
Sensitivity of the net OFEB liability to changes in the discount rate — The following presents
the net OPEB liability of the County, as well as what the County's net OPEB liability would
be if it were calculated using a discount rate that is 1 -percentage -point lower (6,00°/0) or 1 -
percentage -point higher (8.00°/x) than the current discount rate:
1 % Decrease Current Discount 1 % Increase
(6,00%) Rate (7.00%) (8,00%)
County's net OPEB liability 8 476.738..728 $ 391.454.300 322982 081
Sensitivity of 'the net OFEB liability to changes in the healthcare cost trend rates — The
following presents the net OPEB liability of the County, as well as what the County's net
OPEB liability would be if it were calculated using a healthcare cost trend rate that is 1 -
percentage -point lower (6.00°/0) or 1 -percentage -point higher (8.00°/0) than the current
discount rate:
Current
Healthcare Cost
1 % Decrease Trend Rate 1 % Increase
County's net OPEB liability 319204428 — _391,454,300 $ 4831007410420
11,757,502
34,046,407
281549,987
(28,549,987)
101138011705
(10,350,705)
(17,054,987)
(23,228)
2311228
266,457
266,4
22.118.934
$ 6.629.988
0 $ 391,454, 300
Sensitivity of the net OFEB liability to changes in the discount rate — The following presents
the net OPEB liability of the County, as well as what the County's net OPEB liability would
be if it were calculated using a discount rate that is 1 -percentage -point lower (6,00°/0) or 1 -
percentage -point higher (8.00°/x) than the current discount rate:
1 % Decrease Current Discount 1 % Increase
(6,00%) Rate (7.00%) (8,00%)
County's net OPEB liability 8 476.738..728 $ 391.454.300 322982 081
Sensitivity of 'the net OFEB liability to changes in the healthcare cost trend rates — The
following presents the net OPEB liability of the County, as well as what the County's net
OPEB liability would be if it were calculated using a healthcare cost trend rate that is 1 -
percentage -point lower (6.00°/0) or 1 -percentage -point higher (8.00°/0) than the current
discount rate:
Current
Healthcare Cost
1 % Decrease Trend Rate 1 % Increase
County's net OPEB liability 319204428 — _391,454,300 $ 4831007410420
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2018
For the year ended June 30, 2018, the County recognized OPER expense of $37,320,574, At
June 30, 2018, the County reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources:
Deferred Deferred
Outflows Inflows of
of Resources Resources
Net difference between projected and actual earnings on
OPEB plan investments $ 2,140,599
County contributions subsequent to the measurement date 3228292013
Total 321152911013 $ 2,140,599
$32,829,013 reported as deferred outflows of resources related to the County's contributions
to the OPEB plan subsequent to the measurement date will be recognized as a reduction of the
net OPER liability in the fiscal year ended June 30, 2019,
Other amounts reported as deferred outflows of resources and deferred inflows of resources
related to pensions will be recognized in pension expense as follows:
Fiscal Year EndinV. June 30,
Amount
2019
$ (535,150)
2020
(535,150)
2021
(535,150)
2022
(535,149)
T;140; 5
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
tivww.eutf hawaii.gdv 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
Hawai'i, adopted pursuant to Internal Revenue Code CIRC) 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.
COUNTY OF HAWAII
Dotes to the Basic Financial Statements
June 30, 2018
All plan assets are held in a trust fund to protect them from claims of general creditors and
from diversion to any uses other than paying benefits to participants and beneficiaries, The
County has no responsibility for loss due to the investment or failure of investment of funds
and assets in the plans, but does have the duty of due care that would be required of an
ordinary prudent investor. Therefore, the deferred compensation plan assets are not reported
in the accompanying basic financial statements.
14. COMPONENT UNIT DISCLOSURES
Deposits and Investments
At June 301., 201 S, the carrying amount of cash, time certificates of deposit and money market
funds of $54,173,954, with bank balances of $55,1751.,034 were held by the County on behalf
of the Department, These balances were fully insured or collateralized with securities held by
the County's agent in the County's name.
The deposits and investments include cash received by the Department that is restricted as to
use and is recorded as a restricted asset. Such funds amounted to $888,225 at June 30, 2015,
At June 301., 20151., the Department had $25,000,000 in investments,
Capital Assets
The Department began operations as of January 1, 1950, At that date, the utility plant in
service was transferred to the Department from the County at the cost of the utility plant assets
acquired by the County for its water system from January 1, 1924 to December 31, 1949, less
accumulated depreciation. Acquisitions prior to 1924 and acquisitions by gift or grant prior to
1950 are not included in utility plant, Additions to utility plant since January 1, 1950 are
stated at original cost and include contributions by governmental agencies, private subdividers
and customers at their cost or estimated cost. Construction costs include amounts for contract
work, engineering supervision and other direct and indirect costs. 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 25 years
Water systems 10 to 40 years
_100-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 301, 2018
The capital assets of the Department at June 30, 2018 were as follows:
Utility plant in service $5 04,994,61
Less: accumulated depreciation (248.865.070)
256,128,991
Preliminary survey and investigation charges 5,840,355
Construction work in progress 35,899,247
Land and rights 51J94,398
Net capital assets $303,62,991
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 $27,435,593 at June
30, 2018,
General obligation bonds payable issued on behalf of the Department and other long-term debt
at June 301, 2018 are comprised of the following:
Public improvement bonds:
2004 Series D at 4.5%1, due through 2039
2008 Series A at 4,125%, due through 2043
2010 Series A at 4.0% to 5.0%, due through 2020
2010 Series B at 3.33% to 6.1%, due through 2030
Total public improvement bonds
Public improvement refunding bonds:
2007 Series C at 4.0% to 5.0%1, due through 2021
2016 Series B at 3.0% to 5.0%1, due through 2026
2016 Series E at 21,0% to 5.0%1, due through 2029
2017 Series C at 41,0% to 51,0%1, due through 2019
Revolving fund loans:
State revolving fund loans, interest up to 1.37%,
due through 2038
Total long-term debt
Add: Unamortized premium
Total
101 -
207,117
126,914
947,500
5.041.250
6,322,781
1,250,341
12,397,5 00
6,353,750
1,111,221
45.359.733
72,795,326
1.728.197
$14,523,523
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2018
At June 301y 20151, future principal and interest payment s for long-term debt are scheduled as
follows:
Fiscal year ending June 30:
Principal
Interest
Total
2019
$ 5,140,705
$ 1,954,477
$ 7,125,152
2020
51Y542,554
1,509,517
71Y352,671
2021
51Y673,535
1,605,570
71Y252,405
2022
51Y7951Y041
1,402,349
71Y197,390
2023
41Y779,663
1,212,379
51Y9921Y042
2024 2025
24,141,307
31Y657,246
271Y795,553
2029 2033
131Y905,554
11Y071,267
141Y9501Y121
2034 2035
71Y5551Y097
2441Y614
71Y532,711
2039 -2043
2252270
62694
2312964
Total
M
1
$$5,793,039
Contributions in Aid of Construction
The Department recognized $5,122,713 of contributions in aid of construction for the fiscal
year ended June 30, 2015.
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, 2015 for workers' compensation claims of $684,000
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
utilityplant and other projects. Such commitments approximated $14,525,161 at
Julie 30, 2018,
Pension Plan
Fension liabilities, pension expense, and def 'erred outf lows of 'resources and def 'erred
inflows of 'resources related to pensions At June 30, 2015, the Department reported a
liabilityof $25,365,453 for its proportionate share of the net pension liability. The net pension
liabilitywas measured as of June 30, 2017, and the total pension liabilityused to calculate the
net pension liabilitywas determined by an actuarial valuation as of that date, The
Department's proportion of the net pension liabilityT was based on a projection of the employer
contributions to the pension plan relative to projected contributions of all participating
employers.
-102-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 301, 2018
At June 3 0, 20171, the Department's proportion was .22%, which didn't change from its
proportion measured as of June 301, 2016.
For the year ended June 30, 2017, the Department recognized pension expense of $4,033,140,
At June 301, 20181, the Department reported deferred outflows of resources and deferred
inflows of resources related to pensions from the following sources:
Differences between expected and actual experience
Net difference between projected and actual investment
earnings on pension plan investments
Changes in assumptions
Changes in proportion and differences between employer
contributions and proportionate share of contributions
Deferred
Deferred
Outflows
Inflows of
of Resources
Resources
$ 454,580
$ 303,978
2019
83,986
4,331,298
1,633,094
1,663,313
1443,617
Department contributions subsequent to the measurement date 1,757,461
Total
S; 2 D6_ll 1 581
The $11,7571,461 reported as deferred outflows of resources related to the Department's
contributions to the pension plan subsequent to the measurement date will be recognized as a
reduction of the net pension liability in the fiscal year ended June 30, 2019,
Other amounts reported as deferred outflows of resources and deferred inflows of resources
related to pensions will be recognized in pension expense as follows:
Fiscal Year Ending June 30.
Net Deferred
outflows
(Inflows) of
Resources
2019
$ 1,282,575
2020
1,633,094
2021
1,114,202
2022
575,205
2023
12.534
S4,.617,.61 0
Sensitivity of the Department's proportionate share of the net pension liability to changes in
the discount rate The following presents the Department's proportionate share of the net
pension liability calculated using the discount rate of 7.00%1, as well as what its proportionate
- 103 -
COUNTY OF HAWAII
Dotes to the Basic Financial Statements
June 30, 2018
share of the net pension liability would be if it were calculated using a discount rate that is 1 -
percentage -point lower (6.00%) or 1 -percentage -point higher (8,00%) than the current rate:
1 % Decrease Current Discount I % Increase
(6,OO%) Rate (7.00%) (8,00%)
Department's proportionate
share of the net pension liability 36.758 783 28.365.453 $ 21,444,724
Fension plan fiduciary net position — Detailed information about the pension plan's fiduciary
net position is available in the separately issued ERS Comprehensive Annual Financial Report
that includes financial statements and required supplementary information.
Fayables to the pension plan — At June 30, 2018, the annual amount payable to the ERS
totaled $146,403, which represents the employer contribution for the month of June 2018, as
required by HRS.
Post -Retirement Benefits other than Pensions (OPEB)
Net OFEB liability, OFEB expense, and deferred outflows of resources and deferred inflows
of 'resources related to OFEB — At June 30, 2018, the Department reported a net OPEB
liability of $17,265,728. The net OPEB liability was measured as of July I, 2017, and the
total OPEB liability used to calculate the net OPEB liability was determined by an actuarial
valuation as of that date. For the year ended June 30, 2018, the Department recognized OPEB
expense of $1,802,232,
At June 30, 2018, the Department reported deferred outflows of resources and deferred
inflows of resources related to pensions from the following sources:
Deferred Deferred
Outflows Inflows of
of Resources Resources
Net difference between projected and actual earnings on OPEB
plan investments $ 23 8, 862
Department contributions subsequent to the measurement date $ 1, �8
Total $ 23 8, 862
$1,936,548 reported as deferred outflows of resources related to the County's contributions to
the OPEB plan subsequent to the measurement date will be recognized as a reduction of the
net OPEB liability in the fiscal year ended June 30, 2019n
-104-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2018
Other amounts reported as deferred outflows of resources and deferred inflows of resources
related to pensions will be recognized in pension expense as follows:
Fiscal Year Ending Tune 30
2019
2020
2021
2022
Net deferred
outflows (inflows)
of resources
$ (59,715)
(59,715)
(59,715)
(59,717)
$
X238,862)
Sensitivity of'the net OFEB liability to changes in the discount rate The following presents
the net OPEB liability of the Department, as well as what the Department's net OPEB liability
would be if it were calculated using a discount rate that is 1 -percentage -point lower (6.00°/0) or
1 -percentage -point higher (8.00%) than the current discount rate:
1 % Decrease Current Discount 1 % Increase
(6.00%) Rate (7.00%) (8,00%)
Department's net OPER liability S 22.400 212 $ 17.265,728 $_ 131107811475
Sensitivity of the net OFEB liability to changes in the healthcare cost trend rates The
following presents the net OPEB liability of the Department, as well as what the Department's
net OPER liability would be if it were calculated using a healthcare cost trend rate that is 1 -
percentage -point lower (6.00°/0) or 1 -percentage -point higher (8.00°/0) than the current
discount rate:
Current
Healthcare Cost
1 % Decrease Trend Rate 1 % Increase
Department's net OPER liability ` 2783340 171265 728 $ 22 896,636
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.hawai .gov or by contacting them at P.O, Box 2121, Honolulu, HI 96805-2121,
-105-
COUNTY OF HAWAII
Required Supplementary Information
June 301, 2018
Schedule of Changes in the Net DPEB Liability and Related Ratios
Last 10 Fiscal Years*
Total DPEB Liability
Service Cost
Interest on the total DPEB liability
Benefit payments
Net change in total DPEB liability
Total DPEB liability - B eginning
Total DPEB liability - Ending
Plan fiduciary net position
Contributions - employer
Net investment income
Benefit payments
Administrative expense
Other
Net change in plan fiduciary net position
Plan fiduciary net position - Beginning
Plan fiduciary net position - Ending
Net DPEB liability
Plan fiduciary net position as a percentage of
the total DPEB liability
Covered -employee payroll
Net DPEB liability as a percentage of
Covered -employee payroll
2018
County Department
$ 11,757,502 $ 687,414
341Y046,407 2,135,490
(17.054.9 87) (953.288)
28,748,922 1,869,616
4891Y025,992 30,639,939
$ 517,774,914 $ 321Y5091Y555
$ 28,549,987
$1,867,788
10,380,705
1,245,946
(17,054,987)
(953,255)
(23,228)
(2,782)
266.457
16.370
22,115,934
2,174,034
1041Y201,680
131Y069,793
$ 126,320,614
$ 15,243,827
$ 391,454,300
$ 171Y265,728
24.4% 46.9%
$ 168,570,640 $ 9,791,132
232.22% 176.34%
* This schedule is intended to present information for 10 years, as of the measurement date of the
collective net pension liability for each respective fiscal year. Additional years will be built
prospectively as information becomes available.
See accompanying notes to required supplementary information
-106-
COUNTY OF HAWAII
Required Supplementary Information
June 301, 2015
Schedule of Contributions (OPEB) Last 10 Fiscal Years
County:
Fiscal Year
Ended
Actuarially
Determined
Contribution
Contributions
in Relation to
the Actuarially
Determined
Contribution
Contribution
Deficiency
(Exces s)
$ 439153957
Covered-
Employee
Payroll
$ 74,190,644
Contributions
as a %age
of Covered -
Employee
Payroll
18.8%
une 30, 2015
$ 373745,000
$ 321Y5291Y013
June 30, 2017
$ 303472,000
$ 25,549,957
$ 71Y9221Y013
$ 165,570,640
16.9%
June 30, 2016
$ 33,614,000
$ 221Y747,340
$ 10,566,660
$ 1591Y744,324
14.2%
une 30, 2015
$ 323475,000
$ 151Y6571Y000
$ 13,521,000
$ 152,490,296
12.2%
une 30, 2014
$ 303526,000
$ 171Y4531Y000
$ 131Y073,000
$ 1391Y423,451
12.5%
une 30, 2013
$ 293494,000
$ 131Y5921Y000
$ 151Y6021Y000
$ 130,503,306
10.6%
June 30, 2012
$ 3631 93,000
$ 131Y7301Y000
$ 223463,000
$ 1241Y452,126
11.0%
une 30, 2011
$ 343969,000
$ 31,104,000
$ 3,565,000
$ 1271Y559,606
24.3%
une 30, 2010
$ 25,046,000
$ 25,152,000
$ 3,136,000
$ 1331Y5551Y000
21.1%
June 30, 2009
$ 243216,000
$ 241Y9261Y000
($ 710,000)
$ 127,420,000
19.6%
Denartment:
Fiscal Year
Ended
Actuarially
Determined
Contribution
Contributions
in Relation to
the Actuarially
Determined
Contribution
Contribution
Deficiency
(Exces s)
$ 33545
Covered-
Employee
Payroll
$ 10,212,595
Contributions
as a %age
of Covered -
Employee
Payroll
19.0%
une 30, 2015
$ 11Y9331Y000
$ 1,936,545
June 30, 2017
$ 11Y5671Y000
$ 1,567,755
$ 755
$ 93791,132
19.1%
June 30, 2016
$ 1,9141y000
$ 1,913,204
$ 796
$ 93464,649
20.2%
une 30, 2015
$ 11Y5501Y000
$ 1,545,359
$ 1,611
$ 934263509
19.6%
une 30, 2014
$ 11Y5991Y000
$ 11Y9001Y755
$ 1,755
$ 5,635,402
22.0%
une 30, 2013
$ 1,5341y000
$ 1,533,733
$ 267
$ 739663529
23.0%
June 30, 2012
$ 23400,000
$ 21Y401,457
$ 1,457
$ 5,152,965
29.4%
une 30, 2011
$ 23319,000
$ 21Y067,675
$ 251,322
$ 51Y056,395
25.7%
une 30, 2010
$ 11Y607,000
$ 1,963,719
$ 356,719
$ 934593759
20.5%
June 301, 2009
$ 1,5441y000
$ 1,435,469
$ 105,531
$ 9,255,510
15.5%
See accompanying notes to required supplementary information
-107-
COUNTY OF HAWAII
Required Supplementary Information
June 301, 2018
Note Significant Methods and Assumptions
An actuarial valuation of the County's and Department's liability associated with other
postemployment benefits other than pension provided through the EUTF is performed as of July 1
of each odd -numbered year (e.g. July 1, 2015). This actuarial valuation serves as the basis for
developing the annual required contributions (ARC) for the two fiscal years which begin one year
after the actuarial valuation date. For example, the ARC for the fiscal years ended June 30, 2018
and 2017 were developed from the actuarial valuation as of July I, 2015. Beginning July 1, 2017,
the EUTF will be completing an actuarial valuation on an annual basis.
The following summarizes the significant methods and assumptions used to determine the
actuarially determined contribution for the fiscal year ended June 30, 2018:
Actuarial valuation date
Actuarial cost method
Amortization method
Equivalent single amortization period
Asset valuation method
Inflation rate
Investment rate of return
Payroll growth
Healthcare cost trend rates
PPO
HMO
Part B
Dental
vision
Life Insurance
July 1, 2015
Entry Age Normal
Level percent, closed
19.9
Market
3.00%
7.00%
3.50%
Initial rate of 9%1, declining to a rate of 5% after
S years
Initial rate of 7%1, declining to a rate of 5% after
S years
Initial rate of 3% for the first two years,
5% thereafter
4.00%
3.00%
0.00%
The actuarial valuation as of July 1, 20091, which was used to develop the ARC for the fiscal years
2011 and 2012, included a reduction to the discount rate used from the prior valuation. The
discount rate changed from a blended discount rate of 7% - S% to 7%. This resulted in an overall
increase to the actuarially determined OPER liability and the ARC.
There were no other factors that significantly affected trends in the amounts reported in the
schedule of changes in the net OPER liabilityand related ratios or the schedule of contributions
(0 PEB) .
-108-
COUNTY OF HAWAII
Required Supplementary Information
June 301, 2015
Schedule of the County's and Department's Proportionate Share
of the Net Pension Liability (ERS)
Last 10 Fiscal Years
County:
June 301, 2017
4.7%
Proportionate
372.7%
54.5%
June 301, 2016
Share of the
Plan
County's
County's
Net Pension
Fiduciary Net
Proportion of
Proportionate
Liability as a
Position as a
the Net
Share of the County's
%age of
%age of the
Measurement Pension
Net Pension Covered
Covered
Total Pension
Period Ended Liability
Liabilit (J( Pa;rroll
Pa;rroll
Liabilit;
June 301, 2017
4.7%
$609,904,199 $163,626,447
372.7%
54.5%
June 301, 2016
4.6%
$615,129,055
$156,556,514
394.5%
51.2%
June 301, 2015
4.4%
$352,070,513
$149,760,317
255.1%
62.4%
June 301, 2014
4.0%
$322,626,262 $137,669,418
234.3%
63.9%
June 301, 2013
4.2%
$377,065,556 $129,153,763
292.0%
55.0%
Department:
Proportionate
Share of the
Plan
Department's Department's
Net Pension
Fiduciary Net
Proportion of Proportionate
Liability as a
Position as a
the Net
Share of the
Department's
%age of
%age of the
Measurement
Pension
Net Pension
Covered
Covered
Total Pension
Period Ended
Liabilit T %
Liabilit T
Pa Troll
Pa Troll
EiabjjLtxT
June 301, 2017
0.2%
$ 25,365,453
$ 9,355,157
303.1%
54.5%
June 301, 2016
0.2%
$ 29,247,607
$ 9,046,930
323.3%
51.2%
June 301, 2015
0.2%
$ 15,940,065
$ 9,012,196
210.2%
62.4%
June 301, 2014
0.3%
$ 20,526,993
$ 5,272,307
248.1%
63.9%
June 301, 2013
0.2%
$ 15,469,400
$ 7,640,477
241.7%
55.0%
* This schedule is intended to present information for 10 years, as of the measurement date of the
collective net pension liability for each respective fiscal year. Additional years will be built
prospectively as information becomes available.
See accompanying notes to required supplementary information
_109-
COUNTY OF HAWAII
Required Supplementary Information
June 301, 2018
County:
Schedule of the Employer Pension Contributions (ERS)
Last Ten Fiscal Years
Actual
Department:
County
Actual
Contributions
Statutorily
Contributions
Contribution
as a %age of
Fiscal Year
Required
Recognized
Deficiency
County's
Covered
Ended
Contribution
by the Plan
(Exces s) Covered Payroll
Payroll
June 301, 2018
$ 41,562,933
$ 41,562,933
$
168,484,880
24.7%
June 301, 2017
$ 36,157,981
$ 36,157,981
$
163,626,447
22.1%
June 301, 2016
$ 34,013,001
$ 341Y0131yool
$
1561Y556,514
21.7%
June 301, 2015
$ 31,456,145
$ 31,456,148
$
1491Y760,317
21.0%
June 301, 2014
$ 203503,530
$ 261Y5031Y830
$
1371Y669,418
19.3%
June 301, 2013
$ 231Y7631Y101
$ 23,763,101
$
129,153,763
18.4%
June 301, 2012
$ 20,8841Y021
$ 20,8841Y021
$
1231Y2181Y017
16.9%
June 301, 2011
$ 213424,042
$ 21,424,642
$
1261Y7141Y584
16.9%
June 301, 2010
$ 22,120,137
$ 221Y120,137
$
1321Y253,451
16.7%
June 301, 2009
$ 22,310,000
$ 221Y310,600
$
1331Y934,674
16.7%
Department:
See accompanying notes to required supplementary information
-110-
Actual
County
Contributions
Statutorily
Contributions Contribution
as a %age of
Fiscal Year
Required
Recognized
Deficiency
County's
Covered
Ended
Contribution
by the Plan Excess
Covered Payroll
Payroll
June 301, 2015
$
1,757,461
$
1,757,461
$
937423400
18.0%
June 301, 2017
$
1,603,275
$
1,603,275
$
93355,1 87
17.1%
June 301, 2016
$
1,553,125
$
1,553,125 $
$
930403930
17.2%
June 301, 2015
$
1,520,994
$
1,520,994
$
910123196
16.9%
June 301, 2014
$
1,664,550
$
1,664,550
$
5,272,307
20.1%
June 301, 2013
$
1,214,933
$
1,214,933
$
71Y640,477
15.9%
June 301, 2012
$
11Y2101Y106
$
11Y2101Y106
$
71Y549,473
15.4%
June 301, 2011
$
1,197,031
$
1,197,031
$
71Y726,275
15.5%
June 301, 2010
$
1,417,553
$
1,417,553
$
91Y076,143
15.6%
June 301, 2009
$
1,353,335
$
1,353,335
$
5,575,193
15.6%
See accompanying notes to required supplementary information
-110-
COUNTY OF HAWAII
Required Supplementary Information
June 301, 2018
Note Changes of Assumptions
There were no changes of assumptions or other inputs that significantly affected the measurement
of the total pension liability since the measurement period ended June 30, 2016.
Amounts reported in the schedule of the proportionate share of the net pension liabilityr as of the
measurement period ended June 30, 2016 (fiscal year ended June 30, 2017) were significantly
impacted by the following changes of actuarial assumptions:
The investment return assumption decreased from 7.65% to 7.00%.
Mortality assumptions were modified to assume longer life expectancies as well as to reflect
continuous mortality improvement.
Prior to the measurement period ended June 30, 2016 (fiscal year ended June 30, 2017), there were
no other factors, including the use of different assumptions that significantl�r affect trends reported
in these schedules.
COUNTY OF HAWAII
Required Supplementary Information
June 301, 2015
Schedule of Changes in Total Pension Lability (Bandsmen Pension)
Last Ten Fiscal Years`
Measurement year ending
June 30,
Total Pension Liability
Service Cost
Interest on die Total
Pension Liability
Assumption Changes
Benefit Payments
Net Change in Total
Pension Liability
Total Pension Liability
Beginning
Total Pension Liability
Ending
Covered Employee
Payroll
Total Pension Liability as
a Percentage of Covered
Employee Payroll
2018 2017
$ 16,416
36,259
(113,507)
(58~808) (53.347)
(58,808) (114,449)
121462750 1.261.229
! $ I
$49,505 $49,505
21Y197.7% 21Y316.5%
* This schedule is intended to present information for 10 years, as of the measurement date of the
total pension liability for each respective fiscal year. Additional years will be built prospectively
as information becomes available.
See accompanying notes to required supplementary information
- 112-
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.
CEMETERY FUND - Used to accumulate moneys to guarantee the future maintenance of County cemetery
sites. Financing is provided from the sale of burial lots in County cemeteries.
PARKING METER FUND - Used to account for the costs of maintaining County 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.
BIKEWAY FUND - Used to accumulate moneys for the construction of bikeways within the County.
Financing is provided by bicycle license fees.
WORKFORCE INVESTMENT ACT FUND - Used to account for employment and training services
provided to economically disadvantaged adults, dislocated workers and youth. Financing is provided by
federal grants.
GOLF COURSE FUND - Used to account for the cost of operating the Hilo Municipal Golf Course.
Funding is provided from green fees and payments from restaurant and pro shop concessionaires.
GEOTHERMAL RELOCATION AND COMMUNITY BENEFITS FUND - Used to account for the County's
share of geothermal resource royalties received from the operator of a geothermal power plant located in the
County. The funds are earmarked for a geothermal relocation program and to benefit the lower Puna area,
BEAUTIFICATION FUND - Used to accumulate moneys for the beautification of highways and disposal of
abandoned vehicles within the County, Financing is provided by assessments on vehicle registrations.
HAWAII COUNTY DOUSING 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,
This page intentionally left blank.
COUNTY OF HAWAII
Nonmaj or Governmental Funds
Combining Balance Sheet
June 3 0, 2018
Special Revenue Funds
Solid Parking
Highway Sewer Waste Cemetery Meter
Fund Fund Fund Fund Fund
Assets
Cash and cash equivalents
$ 9,023,638
$ 9,079,508
$13,871,358
$ 141,909 $ 278,765
Investments
1 mprest fund
400
250
Receivables:
Due from other governments
31)0781)762
17,439
3421)417
Due from other governmental funds
5631)780
451)476
421)457
Due from other nongovernmental funds
2,700
Trade, net of allowance for doubtful accounts
1,283,22
1,66,118
Real estate held for sale
Other
451)854
31)6421)542
113941671
21)0441)992
Total assets
$ 12,666,180
$10A74,579
$151)9161)600
$ 141,909 $ 278,765
Liabilities, Deferred Inflows and Fund Balances
Liabilities:
Accounts payable
$ 738,281
$ 440,478
$ 3,884,256
$
Accrued payroll
612,527
170,226
4081)415
Due to other governmental funds
860,537
4441)010
8071)829
Advance Collections -Intergovernmental
731)228
1071191
Other
295
711)604
136
Total liabilities
21)2841)868
11)1261)318
51)2071)827
Deferred Inflows of Resources
Unavailable Revenue
11283,202
11)6601)118
Fund balances:
Restricted for:
Debt service
Highways, streets and abandoned vehicles
101)3811)312
Rental assistance and subsidy
Committed to:
Sanitation
81)0651)059
91)0481)655
Highways, streets and abandoned vehicles
278,765
Rental assistance and subsidy
Cemetery
141,9 09
Lower Puna area
Parks and recreational projects
Unassigned
Total fund balances
101)3811)312
81)0651)059
91)0481)655
141,909 278,765
Total liabilities, deferred inflows
and fund balances
$ 12,666,180
$10,474,579
$ 15,916,600
$ 141,909 $ 278,765
-114-
7 Special Revenue Funds
Vehicle Workforce Golf Geothermal Resin:. Beauti- Hawaii County Park
Disposal Bikeway Inflovail0Il & Course & Community fication Housing Dedication
Fund Fund oppart. Act Fzn?d Fund Benefits Fund Fund Agency Fund
$91Y534,357 $ 665,153 $ $ 121)592 $ 4,116,449 $ 6511)025 $ 21Y6251Y415 $ 281)578
59,964
21)000 800 -
115,333
192,194
73,649
35,994 21780 155,734 261)253
1541)327 21780 155,734 2921Y456
$9.534.357 665.153 $ 154,327 171)672 $ 4.272.153 $ 6511)025 $ 21)9201)901 88,542
$ 1271)612 $ 131)903 $ $ 11)377 $ $ 21)153 $ 109,576 $
41)352 511)297 162,594
551)262 1541)327 853 66,756 25,125
12 1 2381)803
2171)265 13,903 1541)327 531Y527 65,940 5391)098
9,613,459
25,055
651,250 5821)085 -
11)2211)302
4,272,153
1,135,446
88,542
(35,555)
91Y6131Y459 651,250 (35,555) 4,272,153 5821)085 21Y356,745 88,542
$91Y530,357 $665,153 154,3271 $ 171)672 $ 4,272,153 $ 651.025 $ 21)9201)901 $ 88,542
(Continued)
-115-
COUNTY OF HAWAII
Nonm aj o r Governmental Funds
Combining Balance Sheet
June 3 0, 2018
Debt Service Fund
Interest
_U 1 1"A
Assets
Cash and cash equivalents
Investments
i merest fund
Receivables:
Due from other governments
Due from other governmental funds
Due from other nongovernmental funds
Trade, net of allowance for doubtful accounts
Real estate held for sale
Other
Total assets
Liabilities, Deferred Inflows and Fund Balances
Liabilities:
Accounts payable
Accrued payroll
Due to other governmental funds
Advance Collections -Intergovernmental
Other
Total liabilities
Deferred Inflows of Resources
Unavailable Revenue
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
Lower Puna area
Parks and recreational projects
Unassigned
Total fund balances
Total liabilities, deferred inflows
and fund balances
See accompany-ing independent auditors' report.
RIM
(Concluded)
Total
Nonmaj or
Governmental
$21)8201)150 $ 53,147,797
59,964
3,450
3,746,145
725,322
2,700
2,943,320
269,645
7,687,132
$2,820,150 $ 60,898,343
$ 5,317,636
1,409,441
2,447,729
180,419
63,199 3741)050
63,199 91)7291)275
2,968,375
21)7561)951 21)7561)951
11,614,647
1,221,32
17,113,714
9,891,854
1,13 5,446
141,909
4,272,183
88,542
(35,855
21)7561)951 481)2001)693
$21)8201)150 $60,898,343
This page intentionally left blank.
COUNTY OF HAWAII
Nonmaj or Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Fiscal Year Ended June 34, 2418
00a
Special Revenue Funds
Solid
Parking
Highway
Sewer
Waste
Cemetery Meter
Fund
Fund
Fund
Fund Fund
Revenues
Fuel taxes
$ 13,342,416
Public utility franchise taxes
51Y3311Y394
Licenses and permits
121Y334,433
Intergovernmental
21Y9321Y094
5,544
219,462
Charges for services
71Y451,791
11,433,524
171)131
Investment earnings (loss)
Other
357,636
21Y097
2251Y986
11,254
Total revenues
371Y323,969
71Y462,425
11,575,572
11,254 17,131
Expenditures
Current:
General Government
Public safety
5,652,544
Highways and streets
171Y5351Y463
Health, education and welfare
Culture and recreation
Sanitation
5,163,757
28,839,159
Pension and retirement contributions
21Y436,472
793,143
1,746,214
Employees' health insurance
11Y456,355
259,554
749,611
Other
1,194,464
335,579
5491Y453
Debt service:
Principal
211,457
21Y644
575,762
Interest
15,240
432
54,344
Total expenditures
31,164,488
91Y5551Y099
321Y474,533
Excess (deficiency) of revenues
over (under) expenditures
6,159,451
(2,092,671)
(20,591,661)
111)250 17,131
Other Financing Sources (Uses)
Transfers in
51Y544
21Y268,837
191Y453,277
Increases in capital leases
937,113
421Y457
1,525,576
Transfers out(3,538,706)
Total other financing sources (uses)
(21y5921y793)
2,311,294
211Y4111Y553
Net change in fund balances
31Y566,655
215,623
424,192
11,254 17,131
Fund balances at beginning of year
61Y814,624
71Y546,436
5,625,463
134,659 261,634
Fund balances at end of year
$ 10,381,312
$ 8,065,059
$ 9,048,655
$ 141,909 $278,765
00a
Special Revenue Funds
Vehicle Workforce Golf Geothermal Reloc. Beaute- Hawaii County Park
J
Disposal Bikeway Innovation & Course & Community fication Housing Dedication
Fund Fund Opport. act Fund Fund Benefits Fund Fund A2ency Fund
21Y3821Y252 61,539 195,494
1,459,694 15,773,511
31Y617 652,794 -
21)861 116
361Y885 5961Y237 545,742
21Y422,754 61,839 1,459,694 652,794 5961Y237 198,494 191Y282,414 116
411,351
321Y478 1961Y276
1,455,445 191Y8 31Y730
11)0791)311 621Y848
1,231,554
21,925 11)245 213,814 714,187
15,834 144,539 3441YS44
853
1,G9S 71Y572
654
1,269,635
321Y478
1,459,694 1,400,215
411,351
259,124
24 8321Y943
1,153,119
291Y361
(747,421)
1841Y886
(60,634)
(1,5501Y529) 116
5421Y954 1,173,675
93,893 -
6361Y847 1,173,675
1,153,119 291Y361 (110,574) 1841Y886 (60,634) (376,854) 116
S,459,970 6211Y889 74,719 41Y087,297 642,719 21Y733,642 SS,426
$ 9,E 13,089 651,250 j (35,855) $ 4,272,183 582 085 21Y356,748 88,542
(Continued)
COUNTY OF HAWAII
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Fiscal Year Ended June 30, 2018
(Concluded)
See accompanying independent auditors' report
-120-
Debt Service Fund
Total
Non major
Interest
Governmental
Fund
Funds
Revenues
Fuel taxes
$
$ 1373427416
Public utility franchise taxes
8,331 ,390
Licenses and permits
1479737014
Intergovernmental
3737640
23,366,837
Charges for services
1975597157
Investment earnings (loss)
2,977
Other
177657833
Total revenues
3737640
81 ,341 ,624
Expenditures
Current:
General Government
4117351
Public safety
876827804
Highways and streets
1777667817
Health, education and welfare
20,872,1 75
Culture and recreation
171427159
Sanitation
3872347826
Pension and retirement contributions
579227960
Employees' health insurance
2,476,692
Other
2, 080, 379
Debt service:
Principal
7987763
Interest
1775927498
1776597128
Total expenditures
1775927498
116,048054
Excess (deficiency) of revenues
over (under) expenditures
[17,218,8581
(34,706,430)
Other Financing Sources (Uses)
Transfers in
1773757823
40,853,366
Increases in capital leases
2,602,039
Transfers out
(3,538,706)
Total other financing sources (uses)
1773757823
39,916,699
Net change in fund balances
1567965
572107269
Fund balances at beginning of year
275997986
42,990,424
Fund balances at end of year
$ 2,756,951
$ 48,200,693
See accompanying independent auditors' report
-120-
COUNTY OF HAWAII
Highway Fund
Schedule of Revenues'. Expenditures, and Charges in Fuad Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended Jure 30, 2018
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 - protective inspection
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 sources (uses) - transfers in (out) -
Transfers in - General Fund
Transfers out - Capital Projects Fund
Deficiency of revenues and other sources
under expenditures and other uses
Fund balance at beginning of year
Fund balance at end of year
See accompam ing independent auditors' report.
Actual Variance
Original Ficial (Budgetary Positive
Budget Budget Basis) (Negative)
$ 5,364,437 $
121Y364,437
S 131Y696,868
$ 11)3321)431
71Y8001Y000
71Y8001Y000
5,331,390
531,390
161Y164,437
20,164,437
221Y028,258
11)8631)821
11,600,000
11,600,000
121Y330,433
730,433
1,603,567
21Y003,567
21Y7671Y052
7631Y485
5001Y000
5001Y000
248,221
(251,779)
1051Y000
1051Y000
1391Y415
341Y415
291Y9731Y004
341Y3731Y004
371Y5131Y379
31Y140,375
5,300
5,300
21Y559
2,741
71Y733,541
5,943,541
5,3571Y003
5861Y538
11,552,326
121Y951,126
101Y0651Y161
21Y8851Y965
71Y2001Y000
81Y2001Y000
71Y520,612
6791Y388
21Y5751Y000
21Y5751Y000
21Y4161Y652
1581)348
1,400,000
1,400,000
1,082,575
317,425
1,146,837
1,946,837
1,126,680
820,157
31,6131Y004
361Y0211Y804
30,571,242
5,450,562
(1,640,000)
(1,648,800)
61Y942,137
5,590,937
51Y500
51Y500
(3,500,000)
(3,500,000)
(3,500,000)
(5,140,000)
(5,140,000)
31Y450,937
5,590,937
61Y514,624
61Y514,624
61Y814,624
$ 1,674,624 $
1,674,624
L10,265,561
$ 5,590,937
-121-
COUNTY OF HAWAII
Sewer Fund
Schedule of Revenues'. Expenditures, and Charges in Fuad Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended Jure 34, 2418
Revenue s :
Intergovernmental
Charges for services - sewer 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
Excess (deficiency) of revenues and other
sources over (under) expenditures
Fund balance at beginning of year
Fund balance at end of year
See accompam ing independent auditors' report.
Actual Variance
Original Ficial (Budgetary Positive
Budget Budget Basis) (Negative)
$ -
$ 5,540
5,540
71Y3861Y127
71Y3861Y127
7,451,791
65,664
-
21Y097
21Y097
71Y3861Y127
71Y3861Y127
71Y462,428
761)301
11,942,524
11,942,524
8,4751Y496
31Y467,428
8921Y333
8921Y333
7941Y292
981Y441
325,626
3231Y626
2641Y427
631Y599
7501Y000
7521Y000
5171Y226
2341Y774
131Y9101Y483
131Y9101Y483
101Y0461Y641
31Y563,842
(6,524,356)
(6,524,356)
(2,584,213)
31Y940,143
21Y268,837
21Y268,837
21Y268,837
(4,255,519)
(4,255,519)
(315,376)
31Y940,143
71Y546,436
71Y846,436
71Y546,436
-
3,590,917
31Y590,917
$ 71Y5311Y060
$ 31Y940,143
-122-
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 34, 2418
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
Excess (deficiency) of revenues and other
sources over (under) expenditures
Fund balance at beginning of year
Fund balance at end of year
See accompanying independent auditors' report
Actual Variance
Original Ficial (Budgetary Positive
Budget Budget Basis) (Negative)
$ 5121Y954
$ 5571Y954
$ 387,787
$ (170,197)
91Y019,200
91Y019,200
1 4331Y824
21Y4141Y624
2261Y144
226,104
225,986
(118)
91Y758,288
91Y8431Y288
121Y447,597
21Y244,349
29,319,631
291Y4121Y631
281Y087,126
1,325,545
1,594,000
1,742,000
1,744,844
11)196
7741Y000
7101Yo00
749,871
129
911,000
771,000
5441Y283
2261Y717
321Y594,631
321Y635,631
31,082,084
1,553,547
(22,832,343)
(22,832,343)
(19,034,487)
31Y797,856
191Y483,277
191Y483,277
191Y483,277
(3,349,066)
(3,349,066)
448,794
31Y797,856
5,628,463
5,628,463
8,628,463
$ 5,279,397
$ 5,279,397
$ 9,077,253
$ 3,797,856
-123-
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, 2018
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.
11,250 117250
1307659 1307659 1307659
$ 1307659 $ 1307659 $ 1411909 5 11,259
-124-
Actual
Variance
Original
Final
(Budgetary
Positive
Budget
Budget
Basis)
(Negative)
$ 101)000
$ 101)000
$ 111250
$ 1,259
107000
107000
10;000
11,250 117250
1307659 1307659 1307659
$ 1307659 $ 1307659 $ 1411909 5 11,259
-124-
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 3 0, 2018
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.
-125-
Actual
Variance
Original
Final
(Budgetary
Positive
Budget
Budget
Basis
(Negative)
$
$ 17,131
$ 171131
171131
17,131
2611)634
2611)634
2611)634
-
$ 261,634
$ 2611)634
$ 275,765
171131
-125-
COUNTY OF HAWAII
Vehicle Disposal Fund
Schedule of Revenues'. Expenditures, and Charges in Fuad Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended Jure 34, 2418
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenue s :
Licenses and permits - vehicle disposal fee
$21Y1031Y984
$ 21Y103,984
$ 21Y3821Y252
$ 278,268
Charges for services - towing charges
1,000
11)000
31Y617
21Y617
Miscellaneous
20,700
24,700
361Y885
16,1 S5
Total revenues
21Y125,684
21Y125,684
21Y422,754
2971Y070
Expenditures:
Sanitation
31Y145,228
31Y145,228
1,188,456
1,957,172
Pension and retirement contributions
281Y900
281Y900
21,899
71)001
Employees' health insurance
281Y000
281Y000
161)167
111)533
Other
21Y000
21Y000
21Y000
Total expenditures
31Y2041Y128
31Y2441Y128
1,226,122
1,978,446
Excess (deficiency) of revenues
over (under) expenditures
(1,078,444)
(1,078,444)
1,196,632
21Y2751Y476
Fund balance at beginning of year
8,459,970
8,459,974
8,459,974
Fund balance at end of year
$ 71Y381,526
$ 71Y381,526
$ 91Y656,602
21Y2751Y076
See accompam ing independent auditors' report,
-126-
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, 2018
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) e ative
Revenues - licenses and permits - bicycle tax
$ 71,000
$ 71,000
$ 61,839
$ (9,161)
Expenditures - highways and streets
71A0
71A0
33,735
37,265
Excess (deficiency) of revenues over (under)
expenditures
28,1 04
28,1 04
Fund balance at beginning of year
62109
621,889
62109
Fund balance at end of year
$621,889
$621,889
$649,993
$28,104
See accompam ing independent auditors' report.
-127-
COUNTY OF HAWAII
Workforce Innovation & opportunity Act Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2018
Revenues - intergovernmental
Expenditures:
Health, education and welfare
Pension and retirement contributions
Total expenditures
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 (BudgetaryPositive
Budget Budget Basis) (Negative)
-128-
$ 2,836,232 $2,434,010 $ (402,222)
21Y834,732 21Y432,635 4021Y097
1,500 1,375 125
21Y836,232 21Y4341Y010 0
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, 2018
Revenues:
Charges for services
Expenditures:
Culture and recreation
Pension and retirement contributions
Emplovees' health insurance
Other
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
$ 734,600 $ 734,600 $ 652,794 $ (81,806)
1,17,417
1,40,417
197,386
215,386
11800
11800
521Y000
11 NO
984,663
55,754
21203
203
104,528
13,472
853
1,147
Total expenditures
1,384,83
1,384,83
1,302,737 82,66
Deficiencv of revenues under expenditures
(650,203)
(650,203)
(649,943) 260
Other financing sources:
Transfers in - General Fund
542,954
5421Y954
542,954
Excess of revenues and other sources
over expenditures
(107,249)
(107,249)
(106,989) 260
Fund balance at beginning of Near
74,719
74,719
74,719
Fund balance at end of Near
$ (32,530)
$ (32,530)
$ (32,270) $ 260
See accompanying independent auditors' report,
Note: "Fund balance at beginning of ,rear" in the above
schedule is on
the modified accrual and not budgetary basis, which
is resulting in the negatvie fund balance shown above.
-129-
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, 2018
Revenues
Miscellaneous:
Geothermal royalties
Sale of real property
Total revenues
Expenditures:
General government:
Planning and zoning
Excess (deficiency) of revenues over
(under) expenditures
Fund balance at beginning of year
Fund balance at end of year
See accompanying independent auditors' report.
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
$ 6007000
$ 6007000
5967237
$ (3,763)
467133
467133
6007000
6007000
6427370
427370
1,000, 000
170007000
97369
9907631
(400, 000)
(400, 000)
6337001
1;033;001
4,087,297
4,087,297
4,087,297
$ 3,687,297
$ 3,687,297
$ 4,720,298
$ 1,033,001
-130-
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, 2018
Actual
Variance
Original Final (Budgetary
Positive
Budget Budget Basis)
(Negative)
Revenues - licenses and permits - highway
beautification
$ 18900
$ 18900
$ 198,490
$ 9,490
Expenditures:
Highways and streets
226,300
226,300
213,968
12,332
Culture and recreation
128,300
128,300
124,792
3,508
Total expenditures
35400
3541Y600
338,760
15,840
Deficiency of revenues under expenditures
(165,600)
(165,600)
(140,270)
251Y330
Fund balance at beginning of year
642,719
6421Y719
6421Y719
Fund balance at end of year
$ 477,119
$ 477,119
$ 502,449
$ 251Y330
See accompanying independent auditors' report
- 131 -
See accompanying independent auditors' report.
- 132 -
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, 2018
Actual
Variance
Original
Final
(Budgetary
Positive
Budget
Budget
Basis)
( Negative
Revenues:
Intergovernmental -
Fedoral - HUD - Voucher program
$ 16,992,045
$ 19,492,045
18,702,884 $
(789,161)
Investment earnings
11600
11600
21861
11261
Resale of property
38,500
38,500
Other
481850
481850
141,619
92,769
Total revenues
17,042,495
19,542,495
18,885,864
(656,631)
Expenditures;
Health, education and welfare
18,148,556
2015971784
19,431,179
1,166,605
Pension and retirement contributions
7751649
7751649
708,013
67,636
Employees' health insurance
370,033
3701033
300,331
69,702
Total expenditures
19,294,238
2117431466
2014391523
1,303,943
Deficiency of revenues under expenditures
(21251,743)
(21200,971)
(11553,659)
6471312
Other financing sources - transfers in -
Transfers in - General Fund
211431350
210921578
1,173,675
(918,903)
Excess (deficiency) of revenues and other sources
over (under) expenditures
(108,393)
(108,393)
(379,984)
(271,591)
Fund balance at beginning of year
217331602
217331602
217331602
Fund balance at end of year
$ 21625,209
$ 21625,209
213531618 $
(271,591)
See accompanying independent auditors' report.
- 132 -
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, 2018
See accompanying independent auditors' report
-133-
Actual
Variance
Original
Final
(Budgetary
Positive
Budget
Budget
Basis)
(Negative)
Revenues - investment earnings
787 $
787
Excess of revenues over expenditures
787
787
Fund balance at beginning of year
88,426
88,426
88,426
Fund balance at end of year
$ 88,426
$ 88,426
$ 8%213 $
787
See accompanying independent auditors' report
-133-
Assets
Cash and cash equivalents
Investments
Due from other agency funds
Other receivables
Total assets
COUNTY OF HAWAII
Agency Funds
Combining Statement of Agency Funds Net Position
June 30, 2018
$271427521 $ 5417229 $ 3167273 $ 77857 $ 3187770
2467928 1667070
47168 3741 250
$271427521 $ 5457397 $ 5667942 1747177 3187770
Liabilities
Due to other agency funds 91 $ $ $ $ 5,625
Accrued liabilities 2,142,430 57682 5,181
Advances payable 12,136 87595 3137145
Assets held for the benefit of
i mprovement districts 5277579 5537166 1747177
Total liabilities $271427521 $ 545.397 $ 5667942 1747177 3187770
See accompanying independent auditors' report.
-134-
Performance
State
I mprovement
I mprovement
I mprovement
and
Weight
District
District
District
Refundable
Tax
No, 18
No. 19
Revolving
Deposits
Fund
Fund
Fund
Fund
Fund
$271427521 $ 5417229 $ 3167273 $ 77857 $ 3187770
2467928 1667070
47168 3741 250
$271427521 $ 5457397 $ 5667942 1747177 3187770
Liabilities
Due to other agency funds 91 $ $ $ $ 5,625
Accrued liabilities 2,142,430 57682 5,181
Advances payable 12,136 87595 3137145
Assets held for the benefit of
i mprovement districts 5277579 5537166 1747177
Total liabilities $271427521 $ 545.397 $ 5667942 1747177 3187770
See accompanying independent auditors' report.
-134-
-135-
Non -Profit
Organ and
Business
Payroll
Flexible
Lapsed
License
Tissue
Improvement
Clearance
Spending
Warrants
Plates
Education
District
Fund
Account
Fund
Fund
Fund
1 - l-ailua
Total
590,494
$ 370,548
$ 334,401
$ 13,775
$ 1,392
$ 301
$ 4,637,561
-
-
-
412,998
71Y270
7,270
71Y527
5,323
5,700
271Y009
$ 595,321
$ 370,548
$ 3461Y994
$ 13,775
1,392
$ 601
$ 51Y084,838
1,554
$ -
$ -
$
$ 7,270
5961Y767
370,548
3461Y994
13,775
1,392
301
31Y4831Y070
333,876
5,700
1,260,622
$ 595,321
$ 370,548
$ 3461Y994
13,775
1,392
601
$ 5,084,838
-135-
COUNTY OF HAWAII
Agency Funds
Combining Statement of Changes in Assets and Liabilities
For the Fiscal Year Ended June 30, 2018
Balance Balance
July I, June 30,
2017 Additions Deductions 2018
State Weight Tax Fund
Assets
Cash and cash equivalents
Liabilities
Vouchers payable
Due to other agency funds
Accrued liabilities - due to State of Hawaii
Total liabilities
Improvement District No. 18 Fund
Assets
Cash and cash equivalents
Other receivables
Total assets
Liabilities
Vouchers Payable
Due to other non -agency funds
Accrued liabilities
Advances payable
Assets held for the benefit
of improvement districts
Total liabilities
Improvement District No. 19 Fund
Assets
Cash and cash equivalents
Investments
Other receivables
Total assets
Liabilities
Vouchers Payable
Due to other non -agency funds
Accrued liabilities
Advances payable
Assets held for the benefit
of improvement districts
Total liabilities
$ 1,980, 809 $ 24, 963, 030 $ 24, 801, 318 $271427521
$ 24,769,706 $ 24,769,706 $ -
91 91
179807809 2479627979 2478017358 2,142,430
$ 179807809 $ 49.732.776 X49,571,064 $271427521
$ 478,889 $ 2307653 $ 1687313 $ 5417229
47252 2447191 2447275 47168
$ 4837141 $
474,844 $
4127588
$ 5457397
27400
1,440
$ $
943 $
943
$
17757
1514
1757
1514
4,252
191,801
191,885
47168
137737
12,136
13737
12,136
4637395
1917917
1277733
5277579
$ 4837141 $ 3987311 $ 3367055 $ 5457397
$ 2557131 $ 1327189 $ 717047 $ 3167273
252, 935 67007 2467928
1556 120,105 1177920 3741
$ 5097622 2527294 $ 1947974 $ 5667942
$ $
27338
27338
$
27400
1,440
27400
1,440
1556
1207105
1177920
3741
137069
87595
137069
87595
492597
1237594
637025
5537166
$ 5097622
2567072
1987752
$ 5667942
136
COUNTY OF HAWAII
Agency Funds
Combining Statement of Charges in Assets and Liabilities
For the Fiscal Year Ended Jure 34, 2018
Balance Balance
July 1, Jure 301,
2017 Additions Deductions 2018
Improvement District Revolving Fund
Assets
Cash and cash equivalents
$ 5,627
$ 21Y230
$
$
71Y557
Investments
1671)995
11)925
1661)070
Other receivables
250
250
Total assets
173.622
$ 21Y480
$ 11)925
$
1741)177
Liabilities.
Assets held for the benefit
of improvement districts
$ 173.622
$ 21Y416
$ 11)861
$
1741)177
Performance and Refundable
Deposits Fund
Assets
Cash and cash equivalents
$ 357,693
$ 5141Y905
$ 5531Y828
$
315,770
Due from other non -agency funds
105
105
Total assets
$ 357,795
5141Y905
5 5531Y933
$
318,770
Liabilities
Vouchers payable
$ 520,155
$ 520,155
Due to other agency funds
21Y925
5,625
21Y925
5,625
Advances payable
354,873
5091Y575
551,303
313,145
Total liabilities
357.798
1,035,355
1,074,383
$
318,770
Payroll Clearance Fund
Assets
Cash and cash equivalents
$ 85,426
$ 2861Y3481Y088
$ 285,8431Y020
$
590,494
Due from other non -agency funds
2741Y388,415
2741Y3851Y706
21Y709
Other receivables
431,320
41
4261Y243
51Y118
Total assets
$ 5161Y746
$ 560.736.544
L560,654,969
$
5951)321
Liabilities
Vouchers payable
$ 140,017,490
$ 140,017,490
$
Due to other agency funds
698
11)554
698
11)554
Due to other non -agency funds
964
964
Accrued liabilities
5161Y048
325,118,374
3251Y038,619
5951Y803
Total liabilities
$ 5161Y746
$ 4651Y138,382
$ 4651Y0561Y807
$
5951)321
-137-
COUNTY OF HAWAII
Agency Funds
Combining Statement of Changes in Assets and Liabilities
For the Fiscal Year Ended June 30, 2018
Balance Balance
Ju v 1, June 30,
2417 Additions Deductions 2415
Flexible Spending Account
As s ets
Cash and cash equivalents
$
354,575
$
3761Y559
$
3601Y886
$
370,545
Liabilities
Accrued liabilities
$
354,575
$
3761Y559
$
3601Y886
$
370,545
Lapsed Warrants Fund
As s ets
Cash and cash equivalents
$
3231Y234
$
12,317
$
1,150
$
334,401
Due from other agency funds
3,623
7,270
3,623
7,270
Other receivables
5,571
5,323
5,571
5,323
Total assets
$ 335.425
$
24,91
$
13,344
$ 346.994
Liabilities
Vouchers pavable
1,150
$
1,150
$
-
Accrued liabilities
3351Y428
70,512
59,246
346,994
Total liabilities
$ 335.425
71,962
$
60,396
$ 346.994
Non -Profit License Plates Fund
As s ets
Cash and cash equivalents
$
1,25
$
66,675
$
53,925
$
13,775
Liabilities
Vouchers pavable
$
53,925
$
53,925
$
Accrued liabilities:
Due to non-profit agency
1, 25
66,675
53,925
13,775
Total liabilities
1,25
$
12000
107,850
$
13,775
Organ and Tissue Education Fund
Assets
Cash and cash equivalents
$
1,160
4,595
$
4,663
$
1,392
Liabilities
Vouchers pavable
$
$
4,661
$
4,661
$
-
Accrued liabilities - due to State of Haxvaii
1,160
4,595
4,663
1,392
Total liabilities
$
1,160
91Y556
$
91Y324
1,392
138
COUNTY OF HAWAII
Agency Funds
Combining Statement of Changes in Assets and Liabilities
For the Fiscal Year Ended June 30, 2018
Balance Balance
JuIv 1, June 30,
2017 Additions Deductions 2018
Business Improvement District 1-Kailua
Assets
$
$ 166,171,093
$ 166,171,093
$
Cash and cash equivalents
55
$ 800,970
$ 800,724
$ 301
Other receivables - BID I-I_ailua Assessment
3,292
803,127
8OO,719
5,700
Due from other non -agency funds
278
325,877,715
278
1,321,31 S
Total assets
$ 3,625
$ 1,6 4,097
$ 101
601
Liabilities
1,951,969
241Y967,874
2406X1
21Y143,822
Vouchers pavable
333
$ 800,725
$ 800,725
$
Accrued liabilities - due to I�VBID
333
237
333
237
Accrued liabilities
64
64
Assets held for the benefit
1,132,906
1,1 17,742
99026
I ,260,622
of improvement districts
31Y292
799,515
7971Y407
5,700
Total liabilities
$ 3,625
1,6 OM1
$ 1,595,465
6M1
Total - All Agency Funds
Assets
Cash and cash equivalents
$3,843,924
$ 313,452,511
$ 312,658,874
$4,637,561
Investments
420,930
7,932
412,998
Due from other agency funds
3,623
7,270
3,623
7,270
Due from other non -agency funds
383
2741Y388,415
2741Y3861Y089
2,709
Other receivables - BID I-I_ailua Assessment
31Y292
803,127
800,719
5,700
Other receivables
4451Y699
3691Y910
7971Y009
1800
Total assets
$ 4,717,551
$ 5891Y021,233
$ 588,654,246
$ 5,84,838
Liabilities
Vouchers payable
$
$ 166,171,093
$ 166,171,093
$
Due to other agencv funds
3,623
7,270
3,623
7,270
Due to other non -agency funds
4,157
3,918
4,157
3,918
Accrued liabilities
1,212,159
325,877,715
325,768,556
1,321,31 S
Accrued liabilities - due to non-profit agency
1, 25
66,675
53,925
13,775
Accrued liabilities - due to State of Haxvaii
1,951,969
241Y967,874
2406X1
21Y143,822
Accrued liabilities - due to I�VBID
333
237
333
237
Advances payable
381,679
530,306
5781Y109
333,576
Assets held for the benefit
of improvement districts
1,132,906
1,1 17,742
99026
I ,260,622
Total liabilities
$ 4,717,551
$ 518.742.830
$ 518.375.843
$5.84.838
See accompanying independent auditors' report.
- 139-
COUNTY OF HAWAII
Private Purpose Trusts
Combining Statement of Private Purpose Trust Net Position
June 30, 2018
Assets
Cash and cash equivalents
Investments
Interest receivable
Tota I assets
Liabilities
Accounts Payable
Total liabilities
Net Position
Held in trust for other parties
Total net position
See accompanying independent auditors' report.
Shippers'
Geothermal Wharf
Asset Trust
Fund Fund
Total
Private
Purpose
Trusts
$ 813,981 $ 892,399 $ 1,706,380
1,525,845 1,606,656 3,132,501
2,294 2,294
L2.342.120 $ 2.499,055 $ 41841,175
$ 25,303 25,303
$ 25,303 $ 25,303
$ 2.316.817 $ 2.499.055 $ 41815,872
2,31 6,8� 7 � 2,499,055 $ 4815872
-140-
COUNTY OF HAWAII
Private Purpose Trusts
Combining Statement of Changes in Private Purpose Trust Net Position
For the Fiscal Year Ended June 30, 2018
Additions
Contributions:
Puna Geothermal Venture
Investment earnings:
Net increase (decrease) in fair value of
investments
Dividends
Interest
Total additions
Deductions
Consultant
Grant payments
Investment Fees
Total deductions
Change in net position
Net position, beginning of year
Net position, end of Near
See accompanying independent auditors' report,
Shippers'
Geothermal Wharf
Asset Trust
Fuad Fuad
Total
Private
Purpose
Trusts
5000 $ 5000
(17,093) 421Y549
25,456
- 37,134
371Y134
22,341 1458
231Y799
555248 81,141
136,389
25,303 25,303
60,92 601Y092
13,458 13,458
25,303
73,550
98,853
29,945
7,591
371Y536
21Y2861Y872
2,491,464
41Y778,336
1_2a316,817
$ 2.499.055
$ 4.815.872
- 141 -
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STATISTICAL SECTION
(iJNAUDITED)
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. 143
Revenue Capacity — These schedules contain information to help the reader assess the County's
most significant local revenue source, the property tax. 148
Debt Capacity — These schedules present information to help the reader assess the affordability of
the Countv's current levels of outstanding debt and the Count -\T's ability to issue additional debt in
the future. 154
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. 157
Operating Information — These schedules contain service and infrastructure data to help the
reader understand how the information in the Count -T's financial report relates to the services
provided and the activities performed by the County. 159
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Table 4
COUNTY OF HAWAII
Changes in Fund Balances, Governmental Funds
(Modified accrual basis of accounting)
Last Ten Fiscal Years
( Amounts in thous ands )
Unaudited -see accompanying independent auditors' report.
Amount for fiscal ti -ear 2014 has been changed for consistence-
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Revenues:
Property tax
$225,858
$215,548
$216,511
8208,231
$ 223,482
$ 236,190
$ 249,054
$266,517
$ 301,699
Public service company tax
10,229
9,647
9,297
9,897
10,766
10,380
10,386
9,801
8,423
7,612
Fuel tax
7,662
7,406
7,603
8,293
6,353
7,373
7,633
7,934
8,289
13,342
Public utility franchise tax
11,118
8,963
9,416
11,065
11,087
10,793
10,824
9,004
7,951
8,331
Licenses and permits
14,972
14,725
15,097
15,790
15,991
19,618
22,046
22,432
22,932
24,066
Intergovernmental
70,869
77,614
93,748
100,867
79,912
75,257
86,272
85,173
79,220
90,025
Charges for services
21,404
18,909
16,416
16,885
17,055
19,392
20,357
21,672
21,708
23,553
Investment earnings (loss)
8,914
2,253
510
406
(618)
1,704
716
614
632
1,592
Settlement contributions
-
-
-
12,500
-
-
-
Other
5,690
3,241
7,874
4,201
4,399
30,084
9,769
16,132
11,791
4,832
Total Revenues
376,716
358,306
376,472
375,635
358,646
398,083
404,193
421,816
427,463
475,052
Expenditures:
Current:
General government
45,882
40,586
34,251
35,088
33,360
36,679
40,805
40,488
40,819
41,571
Public safety
107,540
108,798
104,917
104,523
106,885
111,221
122,819
127,451
136,163
137,718
Highways and streets
17,159
20,222
17,114
17,338
17,923
20,270
20,984
22,479
20,329
21,401
Sanitation
35,025
35,675
28,424
29,511
30,672
29,949
31,464
34,015
38,671
39,352
Health, education and welfare
24,596
25,519
26,847
23,749
24,199
23,070
24,540
25,380
30,535
29,876
Culture and recreation
18,853
17,266
16,001
16,763
16,337
18,334
20,056
21,561
21,196
21,324
Pension and retirement contributions
28,870
28,509
27,284
27,773
29,816
33,032
38,485
41,359
43,718
49,494
Employees' health insurance
19,119
23,573
25,212
25,902
26,011
26,786
27,731
30,112
32,147
33,802
Other postemployment benefits
14,950
15,700
17,307
-
-
3,170
4,532
7,180
11,495
14,831
Other
6,257
4,773
4,758
4,183
2,991
3,238
4,686
3,931
3,839
4,622
Debt service:
Principal
19,749
20,720
42,233
24,834
25,718
19,013
22,004
22,432
22,032
86,906
Interest
12,790
14,584
14,841
15,032
14,345
14,644
13,871
12,974
17,289
17,739
Capital outlay
89,368
100,653
87,782
71,220
48,565
51,369
79,398
144,288
111,109
41,924
Total Expenditures
440,158
456,578
446,971
395,916
376,822
390,775
451,375
533,650
529,342
540,560
Revenues over (under) Expenditures
(63,442)
(98,272)
(70,499)
(20,281)
(18,176)
7,308
(47,182)
(111,834)
(101,879)
(65,508)
Other Financing Sources (Uses):
Sale of assets
58
10
6
153
I
10
25
66
21
23
Capital leases
1,026
1,948
47
2,521
1,307
14
1,971
3,389
3,769
3,809
State Revolving Fund loans
280
6,811
9,257
4,569
4,991
3,072
7,317
8,130
5,154
Sale of bonds
50,000
-
45,000
50,480
130,136
-
107,116
Issuance of bond anticipation totes (BANS)
19,000
-
-
59,800
-
Refuading bonds
47,510
106,254
48,784
Premium on bonds
185
2,078
17,570
23,174
5,998
Refunding bondslBANs issuance costs
(19)
(508)
(276)
Payment to refunded bond escrow agent
(45,352)
(128,920)
(54,537)
Retirement of refunded debt
-
(9,635)
-
Transfers in
56,697
61,495
56,099
59,971
51,356
61,238
59,394
57,412
66,864
75,711
Transfers out
(56,697)
(61,495)
(56,099)
(59,971)
(51,356)
(61,238)
(59,394)
(57,412)
(66,864)
(75,711)
Total other financing sources
51,549
27,750
56,388
7,243
66,872
3,096
1,996
140,908
71,720
116,1171
Net change At fund balances
$ (11,893)
$ (70,522)
$ (14,111)
$ (13,038)
$ 48,696
10,404
$ (45,186)
29,074
$ (30,159)
$ 50,563
Debt service as a percentage of
noncapital expenditures
9.0%
10.4%
15.9%
12.3%
13.9%
10.0%
9,3%
9.1%
9.4%
22.1%
Unaudited -see accompanying independent auditors' report.
Amount for fiscal ti -ear 2014 has been changed for consistence-
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Table 6
COUNTY OF HAWAII
Principal Taxpayers
June 30, 2018 and 2009
Fiscal Year 2018 Fiscal Year 2009
$1,602,028,000 5.1 % $ 1,640,785,400 4.8%
Note; Gross valuation at January 1, 2017; $30,456,6541447
Gross valuation at January 1, 2008; $34,434,334,300
Source: County of Hawa` i, Department of Finance, Real Property Tax Division
Unaudited - see accompanying independent auditors' report.
- 152-
Percentage
Percentage
2017
of Total
2008
of Total
Assessed
Assessed
Assessed
Assessed
Taxpayer
Business
Valuation
Rank
Valuation
Valuation
Rank
Valuation
Kohana ki Shores LLC
Developer
$ 404,680,800
1
1.3%
$
Hilton Resorts Corp.
Timeshare
28414271000
2
0.9%
Mauna Kea/Hapuna Beach Corps.
Developer/Hotel
17859235600
3
0.6%
Hualalai Investors LLC
Developer/Hotel
16555645700
4
0.5%
24014341900
0.7%
Hilton Land Investment I LLC
Hotel
13958895000
5
0.5%
23914331900
2
017%
MAPS Orchid Hotel LLC
Hotel
12550675600
6
0.4%
Mauna Lani Resort Inc.
Developer/Hotel
9815911400
7
0.3%
12459185100
7
0.4%
Raptor Residence LLC
Residential
7412491700
8
0.2%
6918701500
19
0.2%
Target Corporation
Retailer
6711741500
9
0.2%
SMG I Hotel Wa i koloa LLC
Hotel
63,459, 700
10
0.2%
Mauna Kea Development Corp
Hotels/Dev.
23712471300
3
0.7%
WB KD Acquisition LLC
Developer
19753825400
4
0.6%
1250 Oceanside Partners
Developer
19651885400
5
016%
WB-LCP Orchid Owner LLC
Hotel
17255465300
6
0.5%
Kona Coast Resort Ltd
Condo/Time Share
8217331300
8
0.2%
BREIWaikoloa LLC
Hotel
8050305300
9
0.2%
$1,602,028,000 5.1 % $ 1,640,785,400 4.8%
Note; Gross valuation at January 1, 2017; $30,456,6541447
Gross valuation at January 1, 2008; $34,434,334,300
Source: County of Hawa` i, Department of Finance, Real Property Tax Division
Unaudited - see accompanying independent auditors' report.
- 152-
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Table 9
COUNTY OF HAWAII
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
Debt
Percent of
Applicable to
Net Taxable
Fiscal Legal Debt
Property, Per
Year Margin (a)
Value (b) Capita (c)
2009
2961Y535,925
1.0%
1,667
2010
2771Y451,633
1.0%
1,549
2011
305,615,691
1.2%
1,636
2012
3173699,544
1.3%
1,679
2013
315,676,941
1.3%
1,654
2014
29537093020
1.3%
1,538
2015
312,032,049
1.2%
1,592
2016
362,963,113
1.4%
1,829
2017
40534553342
1.4%
21Y024
2015
414,4461Y063
1.4%
N/A
NOTES:
(a) See Table 10 for debt applicable to legal debt margin.
(b) See Table 5 for net taxable propertyvalues.
(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 accompanvmi g independent auditors' report.
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Table II
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 301, as of July 1 of dollars) Income Enrollment Rate
2005
181,506
$
5,899,236
$
32,502
30,405
5.7%
2009
183,629
$
5,517,497
$
30,047
30,135
9.9%
2010
1851Y381
$
5,717,555
$
30,544
291Y741
10.0%
2011
1571Y229
$
0,114,237
$
32,656
30,103
9.7%
2012
1891Y191
$
6,318,657
$
33,395
30,314
8.3%
2013
1901Y821
$
6,544,583
$
34,297
331Y945
61y6%
2014
194,190
$
0,771,329
$
34,570
291Y955
6.5%
2015
1961Y428
$
7,067,347
$
35,979
291Y865
5.2%
2016
195,449
$
7,618,924
$
35,392
291Y753
4.7%
2017
200,351
$
5,053,011
$
40,155
291Y666
3.5%
* Amounts reflect subsequent adjustments
Source: County of Haxvai'i i, Department of Research and Development, Bureau of Economic Analysis,
State of Hawaii Department of Labor, State of Hawaii DDE and Universityof Hawaii Hilo
Unaudited - see accompanying independent auditors' report.
- 157-
Table 12
COUNTY OF Hr1WAII
Principal Employers, County of Hawaii
June 30, 2018 and 2009
2018 2009
Total employee count
Source: County of Hawai' i, Department of Research and Development
Unaudited - see accompanying independent auditors' report.
- 158-
71,247
56,325
Percentage
Percentage
of Total County
of Total County
Employer
Employees
Rank
Employment
Emplovees
Rank
Employment
State of Hawai' I
1400
1
20.5%
5,115
1
9,4%
County of Hawaii I
2,800
2
3.9%
2,745
2
3,2%
Four Seasons Resort Hualalai
1,300
3
1.8%
562
9
O,7%
United States Government
1,200
4
1.7%
1,364
3
1,6%
Mauna Kea and Hapuna Prince Resorts
and Mauna Kea Services
L018
1.4%
Hilton Waikoloa Village
876
6
1.2%
984
4
151 %
IATA Super Stores
800
7
1.1 %
800
6
0.9%
The Fairmont Orchid, Hawaii I
715
8
1.0%
577
8
0.7%
Mauna Lam Resort (Operations), Inc.
515
9
0.7%
685
7
0.8%
North Hawaii Community Hospital
367
10
0.5%
Wal-Mart
852
3
1.0%
Hapuna Beach Prince Hotel
487
10
0.6%
Total
24,191
33.8%
17,171
19,9%
Total employee count
Source: County of Hawai' i, Department of Research and Development
Unaudited - see accompanying independent auditors' report.
- 158-
71,247
56,325
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