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CAFR FY2007�1 KODIAK ISLAND BOROUGH 1 Comprehensive Annual Financial Report June 30, 2007 Official Issuing Report Karleton G. Short Director of Finance 1 1 I n Ll 1� 1 1 KODIAK ISLAND BOROUGH TABLE OF CONTENTS June 30, 2007 1 Page INTRODUCTORY SECTION: Letter of Transmittal i -iv GFOA Certificate of Achievement v Organizational Chart vi Elected Officials (Photographs) vii Borough Officials viii Map of Kodiak Island Borough ix FINANCIAL SECTION: Independent Auditors' Report 1 -2 Management's Discussion and Analysis 3 -12 Basic Financial Statements: Government -wide Financial Statements: Statement of Net Assets 13 Statement of Activities 14 Fund Financial Statements: Balance Sheet — Governmental Funds 15 Reconciliation of Net Assets Between the Government -Wide and Fund Financial Statements 16 Statement of Revenues, Expenditures, and Changes in Fund Balances — Governmental Funds 1'7 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 18 Balance Sheet — Proprietary Funds — Business -Type Activities — Enterprise Funds 19 Statement of Revenues, Expenses, and Changes in Fund Equity — Proprietary Funds — Business -Type Activities — Enterprise Funds 20 Statement of Cash Flows — Proprietary Funds — Business -Type Activities — Enterprise Funds 21 -22 Notes to Financial Statements 23 -56 Required Supplementary Information: Schedule of Funding Progress — PERS 57 Budgetary Comparison Schedule — General Fund 58 -59 Budgetary Comparison Schedule — Special Revenue Fund — Facilities 60 Notes to Required Supplementary Information — Budgetary Comparison Schedules 61 Additional Supplementary Information: Budgetary Comparison Schedule — Debt Service Fund — Education and Health 62 Nonmajor Governmental Funds: Combining Balance Sheet 63 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 64 Nonmajor Special Revenue Funds: Combining Balance Sheet 65 -68 1 KODIAK ISLAND BOROUGH TABLE OF CONTENTS I June 30, 2007 , Page Additional Supplementary Information, continued Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Deficits) 69 -72 Schedules of Revenues, Expenditures, Transfers, and Changes in Fund Balances ' (Deficit) — Budget and Actual: Fire and Road Service Areas: Fire: Fire Protection Area No. 1 73 Women's Bay Fire Department 74 Kodiak Airport Fire District 75 Road: Monashka Bay Road Service Area 76 Service Area No. 1 77 Women's Bay Road Service Area 78 ' Bay View Road Service Area 79 Service Area No. 2 80 Coastal Management 81 ' Child Care Assistance Program 82 L.E.P.C. Land Sales 83 84 ' Buildings and Grounds 85 Woodland Acres Street Light Service Area 86 Trinity Islands Street Light Service Area 87 Kodiak Arts Council 88 Tourism Development 89 Mission Lake Tide Gate 90 Fern Fuller Trust 91 , Trinity Islands Paving 92 Debt Service Fund: Balance Sheet — Other ' 93 Schedule of Revenues, Expenditures, and Changes in Fund Balance — Budget and Actual — Other 94 Nonmajor Capital Project Funds: ' Combining Balance Sheet 95 Combining Schedule of Revenues, Expenditures and Changes in Fund Balances 96 Schedule of Revenues, Expenditures, and Changes in Fund Balance (Deficit): Various Borough Projects 97 State Capital Grants 98 Supplemental Schedule of Capital Projects: Capital Project Funds 99 -100 ' (continued) KODIAK ISLAND BOROUGH I Table of Contents Enterprise Funds: ' Statement of Revenues, Expenses, and Changes in Fund Equity — Budget and Actual: Municipal Solid Waste Collection and Disposal Hospital Facilities Kodiak Fisheries Research Center 911 Services Fund 1 i Supplementary Schedules: Summary of Bonded Debt Service Requirements to Maturity General Obligation Refunding Bonds, 1998 Series A — Retirement Schedule General Obligation Bonds, 2000 Series E — Retirement Schedule General Obligation Bonds, 2000 Series F — Retirement Schedule General Obligation Bonds, 2004 Series C — Retirement Schedule General Obligation Bonds, 2004 Series D — Retirement Schedule STATISTICAL SECTION: Net Assets by Component — Last Three Fiscal Years Changes in Net Assets — Last Three Fiscal Years Fund Balances of Governmental Funds — Last Three Fiscal Years Changes in Fund Balances of Governmental Funds — Last Four Fiscal Years General Revenues by Source — Last Ten Fiscal Years Assessed and Estimated Actual Value of Taxable Property — Last Ten Fiscal Years Direct and Overlapping Property Tax Rates and Contributions to the School District Principal Property Tax Payers — Current Year and Nine Years Ago Property Tax Levies and Collections — Last Ten Years Ratios of Net General Bonded Debt Outstanding — Last Ten Fiscal Years Computation of Direct and Overlapping Debt Legal Debt Margin Information — Last Two Fiscal Years Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Governmental Expenditures and Transfers — Last Ten Fiscal Years Ratios of Outstanding Debt by Type — Last Ten Fiscal Years Demographic and Economic Statistics — Last Ten Fiscal Years Average Monthly Employment & Earnings 2006 Miscellaneous Statistical Data Property Value, Construction and Bank Deposits Full -Time Equivalent Borough Employees by Function/Program — Last Three Fiscal Years 101 102 103 104 105 106 107 108 109 110 111 112 -113 114 115 116 117 118 119 120 121 122 123 124 125 -126 127 128 129 130 131 INTRODUCTORY SECTION 1 u t r-� L Kodiak Island Borough Finance Department 710 Mill Bay Road Kodiak, Alaska 99615 Phone (907) 486 -9320 Fax (907) 486 -9399 December 21, 2007 Members of the Assembly Kodiak Island Borough, Alaska State of Alaska statutes and local charter provisions require that all general - purpose local governments publish a complete set of financial statements presented in conformity with accounting principles generally accepted in the United States of America (GAAP) and audited in accordance with auditing standards generally accepted in the United States of America by a firm of licensed certified public accountants. Pursuant to that requirement, we hereby issue the comprehensive annual financial report of the Kodiak Island Borough (Borough) for the fiscal year ended June 30, 2007. This report consists of management's representations concerning the finances of the Borough. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of the Borough has established a comprehensive internal control framework that is designed both to protect the government's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the Borough's financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the Borough's comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The Borough's financial statements have been audited by Altman, Rogers & Co., a firm of licensed certified public accountants. The goal of the independent audit was to form an opinion on whether the financial statements of the Borough, for the fiscal year ended June 30, 2007, are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of ' America. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor ' issued an unqualified opinion on the Borough's financial statements for the fiscal year ended June 30, 2007. The independent auditors' report is presented as the first component of the financial section of this report. L Members of the Assembly Kodiak Island Borough, Alaska The independent audit of the financial statements of the Borough was part of broader, State and federally mandated "Single Audits" designed to meet the special needs of State and federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government's internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of State and federal awards. These reports are available in the Borough's separately issued Single Audit Report. GAAP require that management provide a narrative introduction, overview, and analysis to accompany the , basic financial statements in the form of Management's Discussion and Analysis (MD &A). This letter of transmittal is designed to complement MD &A and should be read in conjunction with it. The Borough's MD &A be found immediately following the report of the independent auditors. can Profile of the Government The Kodiak Island Borough lies at the western border of the Gulf of Alaska, approximately 40 miles south , of the Kenai Peninsula. Kodiak Island is the largest island in Alaska and the second largest in the United States. About two- thirds of the Borough lies in the Kodiak archipelago with the remaining third on the Alaska Peninsula, across the Shelikof Strait from Kodiak Island. The Shelikof Strait is only 20 miles wide , in places. The Borough encompasses 7,130 square miles, making it slightly smaller than the State of Massachusetts and serves a population of 13,811. The Borough was incorporated September 30, 1963, as a Second Class Borough by Chapter 146 Sessions, Laws of Alaska 1961, as amended. The powers granted to the Borough include area -wide powers and non area -wide powers. Area -wide powers are health, education, assessment and collection of taxes for both the Non Borough and cities within the Borough, planning and zoning, and general administrative services. ' area -wide powers include parks and recreation, economic development, solid waste disposal, and animal control. Service districts within the Kodiak Island Borough provide fire protection, road maintenance and construction, and street lighting. A Mayor/Manager form of government governs the Borough. The Mayor is elected at large while the Borough Assembly appoints the Manager. The Assembly is composed of seven ' members who are elected at- large. The Borough provides a full range of services including fire protection, the construction and maintenance of roads and other infrastructure, community and economic development, health and sanitation, culture and recreation and solid waste collection and disposal. The Borough also is financially accountable for a legally separate school district which is reported separately within the Borough's financial statements. Additional , information on this legally separate entity can be found in the basic financial statements. The annual budget serves as the foundation for the Borough's financial planning and control. All departments of the Borough are required to submit requests for appropriation to the Borough manager. The Borough manager uses these requests as the starting point for developing a proposed budget. The Borough Manager then presents this proposed budget to the assembly for review by April 30. The assembly is , required to hold public hearings on the proposed budget and to adopt a final budget by no later than June 10. The appropriated budget is prepared by fund and department. The Assembly makes appropriation transfers between funds and /or departments only after the adoption of an ordinance. Borough staff may execute transfers between line items within a department. Amendments to the budget can occur anytime ' during the fiscal year through the Borough Assembly or administrative action. Expenditures may not legally exceed appropriations at the following levels: Capital Project Funds — project level, all other funds — department level. All funds, except Capital Project Funds, are budgeted on an annual basis encompassing ' a fiscal year. Budgets of Capital Project Funds generally encompass the period from start-up to project completion, which is generally greater than one year. Budget -to- actual comparisons are provided in this report for each individual governmental and proprietary fund for which an appropriated annual budget has ' been adopted. For the general fund and the facilities special revenue fund, this comparison is presented on ii I Members of the Assembly Kodiak Island Borough, Alaska pages 58 -61 as part of required supplementary information. For governmental funds, other than the general ' fund and the facilities special revenue fund, this comparison is presented in the additional supplementary information subsection of this report, which starts on page 62 . Also included in the additional supplementary information subsection are the education and health debt service fund budget to actual and ' project - length budget -to- actual comparisons for each of the capital projects. For proprietary funds, this comparison is presented in the proprietary funds subsection of this report, which starts on page 102. Factors Affecting Financial Condition The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the Borough operates. Local economy. The economic condition of the Kodiak Island Borough remains healthy. The main industries of the Borough are commercial fishing, logging, and tourism. While some segments of the ' commercial fishing industry have declined, others have grown. There have been large cutbacks in the logging industry, which can be attributed to the slowdown in the Asian economy. Tourism continues to grow in Kodiak with an increased number of visitors each year. To accommodate this demand, ' construction of fishing lodges, bed and breakfast accommodations and recreational facilities has increased along with an increase in charter boat and guide operations. There has also been an increase in the number of cruise ships visiting Kodiak in recent years as the cruise ship companies have expanded their tours of Alaska's coastal communities. Relatively new to the Kodiak Island Borough is the aerospace industry, which began with construction of the Kodiak Launch Complex in 1998. Owned by the Alaska Aerospace Development Corporation ' (AADC), a public corporation of the State of Alaska, the Kodiak Launch complex is the first complete launch facility built in the United States since the 1960's and the first not owned by the Federal Government. The state -of -the -art facility includes a launch control center, payload processing facility, ' spacecraft assembly building and launch pad. It is designed to handle small to medium sized rockets used to launch low earth orbit satellites, as well as military, scientific and research missions. 1 Kodiak is home to the largest U.S. Coast Guard base in the country, employing nearly 1,400 people and providing vital services to the marine industries that are an integral part of Kodiak's make -up as well as making a significant contribution to the Kodiak community. ' The Seafood industry is by far the largest industry in the Kodiak Island Borough. This industry includes commercial fishing, fisheries research, management and enforcement, seafood processing, and maintenance and support services. Kodiak is home to the largest port in the State, housing over 700 commercial vessels and consistently ranks among the top ten ports in the United States in terms of amount and value of product delivered. Employment varies throughout the year with July, August, and September being the peak months due to the increased activity in the fisheries and related businesses, and then declines in November and December when fishing quotas are reached. The local unemployment rate has fluctuated from 5.1 % to 14.9% over the ' last five years, but the overall average has remained around 9 %. Long -term financial planning. Every year the Borough adopts a five-year strategic plan. In this plan the Borough decides what its' goals and objectives are for the next five years. The Borough breaks these goals 1 out based on our Mandatory and Adopted powers. To view the complete Strategic plan you can visit our web site at www.kodiakak.us. Iiii Members of the Assembly Kodiak Island Borough, Alaska Cash management policies and practices. Operating funds of the Borough are invested in interest producing instruments in accordance with the Borough's investment code. Cash forecasts are prepared to enhance investment income and reduce market risk by matching investment maturities to anticipated cash flows. Investment income includes appreciation or depreciation in the fair value of investments. Risk management. The Borough maintains adequate fund balance in the General Fund, plus certain other funds where the liability may arise, to cover potential losses that may not be covered by insurance or the deductible portion of claims that are covered by insurance. In addition, various control techniques, including employee accident prevention training, have been implemented to minimize accident - related losses. Third party coverage is currently maintained for all of the Borough's property and activities. Additional information on the Borough's risk management activity can be found in note 10 of the notes to the financial statements. Pension and other post employment benefits. The Borough participates in the Alaska Public Employees Retirement System (PERS), which includes both a defined contribution and a defined benefit agent, multiple employer public employee retirement system. PERS was established and is administered by the State of Alaska to provide pension, post employment healthcare, death, and disability benefits to eligible participants. At June 30, 2006 (date of most recent actuarial analysis), the actuarial value of liabilities exceeded the actuarial value of assets by $8.2 million. Effective July 1, 2006, the PERS retirement plan was closed by senate Bill 141. A new defined contribution plan for members first hired on or after July 1, 2006 was established. The Borough also administers a Section 457 deferred compensation arrangement for eligible Borough employees. Additional information on the Borough's pension arrangements and post employment benefits can be found in Note 13 in the notes to the financial statements. Awards and Acknowledgements The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the Borough for its comprehensive annual financial report (CAFR) for the fiscal year ended June 30, 2006. This was the seventeenth consecutive year that the Borough has received this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff of the administration and finance department. We would like to express our appreciation to all members of the department who assisted and contributed to the preparation of this report. Credit must be given to the mayor and the assembly for their unfailing support for maintaining the highest standards of professionalism in the management of the Borough's finances. Respectfully submitted, I-A Rick L. Gifford Karleton G. Short Borough Manager Director of Finance ry 1 1 � Certificate of � Achievement for Excellence � in Financial � Reporting � Presented to Kodiak Island Borough I Alaska ' For its Comprehensive Annual Financial Report ' for the Fiscal Year Ended June 30, 2006 ' A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting ' and financial reporting. T cox ~ to an MM ,Nr s President ' *14 44- Executive Director Kodiak Island Borough Fiscal Year 2007 Borough Attorney Assistant Fire Chief Engineering/ Facilities Director KFRC Environmental Maintenance Specialist Engineer KFRC Receptionist Baler/Landfill Supervisor Project Manager/ Inspector Baler Operator 11 Project Assistant Baler Operator I Maintenance Baler Operator I Worker Baler Operator I Secretary III Baler Operator 11 Borough Manager Assistant Community Development Director Assessor Associate Planner LRP Associate Planner Enforcement Drafting Technician Secretary III Property Appraiser Appraiser Technician Assessment Clerk I V1 Borough Clerk Assistant Clerk Deputy Clerk Arts Council Director 1 IF Finance[MIS Director General Accountant Accounting Tech Accounts Payable Accounting Tech Payroll Childcare Assistance Administrator Revenue Accountant Cashier Secretary III MIS Programmer/ Analyst MIS Operations Supervisor MIS Network Adrrdnistrator MAYOR AND ASSEMBLY MEMBERS Tom Abell Deputy Presiding Officer, At Large, 2008 Jerome Selby Mayor, 2007 Sue .kffrey At Large, 2008 Pat Branson At Large, 2007 Jerrot Friend At Large, 2009 Chris Lynch At Large, 2009 Reed Oswalt At Large, 2008 vii Barbara WKU&ms At Large, 2007 KODIAK ISLAND BOROUGH KODIAK, ALASKA BOROUGH OFFICIALS YEAR ENDED JUNE 30, 2007 MAYOR Jerome Selby `07 ASSEMBLY Tom Abell '08 Sue Jeffrey `08 Jerrol Friend `09 Barbara Williams `07 Patricia Branson `07 Reed Oswalt `08 Chris Lynch `09 MANAGEMENT RickGifford .................................................... ............................... ........................Borough Manager Karleton G. Short ............................. ............................... .........................Finance Director /Treasurer Woody Koning ............................................. ............................... Engineering and Facilities Director NovaJavier, CIVIC ........................................................................ ............................... Borough Clerk Bud Cassidy ............................ ............................... ......................Community Development Director TomAnderson ................................................................. ............................... .......................Assessor Robert A. Himes ................................................................... ............................... Assistant Fire Chief Jamin, Schmitt, St. John ............................ ............................... Borough Attorney (Contracted Firm) Larry LeDoux ..................................................... ............................... Superintendent, School District Dria Bray Holloway ............................................................. ............................... General Accountant Cassandra Juenger ....................................... ............................... ........................Revenue Accountant Lauri Whiddon ..................................................... .............................HR Officer/Executive Assistant Viii m I m m m r m m m m m r m m r r m m m m ARCTIC OCEAN V P;,� BARROW PRUDHOE BAY b ZINKI OOIAK KARLUK E MY �D HINW( HARE AKHKIK o� a KODIAK ISLAND BOROUGH d NOME "1'�NORTON SOUND BETHEL DILLINGHAM BRISTOL BAY WE _ ARCTIC GRCIE 1 CANADA FAIRBANKS ALASKA VALDEZ GULF OF ALASKA KODIAK ISLAND EAU NORTH PACIFIC OCEAN FINANCIAL SECTION Altman, &grs CERTIFIED &;—,Co. I PUBLIC ACCOUNTANTS Independent Auditors' Report The Honorable Mayor and Members of the Assembly Kodiak Island Borough: 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 Kodiak Island Borough, Alaska, as of and for the year ended June 30, 2007, which collectively comprise the Borough's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Kodiak Island Borough, Alaska's management. Our responsibility is to express opinions on these financial statements based on our audit. ' We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material ' misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the Kodiak Island Borough, Alaska, as of June 30, 2007, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated December 21, 2007 on our consideration of the Kodiak Island Borough, Alaska's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. The management's discussion and analysis on pages 3 through 12, the schedule of funding progress for PERS on page 57 and the budgetary comparison information on pages 58 through 61 are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation ' of the required supplementary information. However, we did not audit the information and express no opinion on it. 425 G Street Suite 500 Anchorage, Alaska 99$01 Phone 907 - 274 -2992 Fax 907 - 274 -2993 Offices in Kodiak, Juneau and Soldotna A Professional Corporation The Honorable Mayor and Members of the Assembly Kodiak Island Borough 1 Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Kodiak Island Borough, Alaska's basic financial statements. The accompanying additional supplementary information, as identified in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory section and statistical tables, as identified in the table of contents, have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. December 21, 2007 fl l 1 KODIAK ISLAND BOROUGH Management's Discussion and Analysis June 30, 2007 ' As management of the Kodiak Island Borough, we offer readers of these financial statements this narrative overview and analysis of the financial activities of the Kodiak Island Borough for the fiscal year ended June 30, 2007. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages i - iv of this report. Financial Highlights • The assets of the Kodiak Island Borough exceeded its liabilities at the close of FY2007 by $144,186,510. Of this amount, $32,137,354 (unrestricted net assets) may be used to meet the Borough's ongoing obligations to citizens and creditors. • In FY2007 the Borough's total net assets increased by $3,362,170. •• At the end of the current fiscal year, the Borough's governmental funds reported combined fund balances of $67,289,953, an increase of $1,821,438 in comparison with the prior year. At the end of the FY2007, unreserved fund balance for the general fund was $2,793,313, 23% of total general fund expenditures. • The Borough's bonds payable decreased by $1,070,361 or 4% due to the payment of principal and no new bond issues. Overview of the Financial Statements Government -wide Financial Statements The government -wide financial statements are designed to provide readers with a broad overview of the Kodiak 1 Island Borough's finances, in a manner similar to a private- sector business. The statement of net assets presents information on all of the Kodiak Island Borough's assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the Kodiak Island Borough is improving or deteriorating. J The statement of activities presents information showing how the government's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods. Both of the government -wide financial statements distinguish functions of the Kodiak Island Borough that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the Kodiak Island Borough include general government, emergency preparedness, community and economic development, health and sanitation, education, culture and recreation, service district maintenance and primary and secondary education. The business -type activities of the Kodiak Island Borough include a solid waste collection and disposal facility, a Borough owned hospital, the Kodiak Fisheries Research Center and a 911 emergency system. The government -wide financial statements include not only the Kodiak Island Borough itself (known as the primary government), but also the legally separate school district for which the Kodiak Island Borough is financially accountable. Financial information for this component unit is reported separately from the financial information presented for the primary government itself. The government -wide financial statements can be found on pages 13 -14 of this report. 1 3 (Continued) i KODIAK ISLAND BOROUGH Management's Discussion and Analysis June 30, 2007 Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Kodiak Island Borough, 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 Kodiak Island Borough can be divided into two categories: governmental funds and proprietary funds. Governmental Funds — Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide statements, governmental fund financial statements focus on near -term inflows and outflows of spendable resources as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near -term financing requirements. 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 fund balance sheet and governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The Kodiak Island Borough maintains 27 individual governmental funds. Information is presented separately in the governmental fund balance sheet and 'in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, the facilities special revenue fund and the education and health debt service fund, which are all considered to be major funds. Data from the other nonmajor funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in the supplementary information section of this report. The Kodiak Island Borough adopts an annual appropriated budget for its general fund, special revenue funds and debt service funds. Budgetary comparison statements have been provided for the funds to demonstrate compliance with this budget. The basic governmental financial statements can be found on pages 15 -18 of this report. Proprietary Funds — The only proprietary fund type that the Kodiak Island Borough uses is enterprise funds. Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial statements. Proprietary funds provide the same type of information as government -wide financial statements, only in more detail. The Kodiak Island Borough uses enterprise funds to account for a solid waste collection and disposal facility, a Borough -owned hospital leased to the Sisters of Providence d.b.a. Providence Kodiak Island Medical Center, rents and utilities of the Borough -owned Kodiak Fisheries Research Center, and 911 phone charges and expenses. The Kodiak Island Borough adopts an annual appropriated budget for its proprietary funds. Budgetary comparison statements have been provided for the funds to demonstrate compliance with the budget. The basic proprietary fund financial statements can be found on pages 19 -22 of this report. Notes to the Financial Statements — The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. The notes to the financial statements can be found on pages 23 -56 of this report. (Continued) fl L I KODIAK ISLAND BOROUGH ' Management's Discussion and Analysis June 30, 2007 Other Information — In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the Kodiak Island Borough's progress in funding its obligation to provide pension benefits to its employees and budgetary comparison schedules for the general ' fund and the facilities special revenue fund. Required supplementary information can be found on pages 57 -61 of this report. Government -wide Financial Analysis Statement of Net Assets As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of the Kodiak Island Borough assets exceeded liabilities by $144,186,510 at the close of FY2007, the most recent fiscal year. The largest portion of the Kodiak Island Borough's net assets ($112,049,156 or 78 %) reflects its investment in capital assets (e.g. land, buildings, equipment and infrastructure) net of related debt. The Kodiak Island Borough uses these capital assets to provide services to citizens; consequently, these capital assets are not available for ' future spending. Although the Borough's investment in capital assets is reported net of 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. Current and other assets Capital assets Total assets 1 Long -term liabilities Other liabilities Total liabilities �J 1 Net assets: Invested in capital assets, net of related debt Unrestricted Total net assets Governmental Business -type Activities Activities Total 2007 2006 2007 2006 2007 2006 $ 64,724,043 62,586,633 8,524,715 6,545,189 73,248,758 69,131,822 73,425,394 74,210,255 38,053,625 39,858,719 111,479,019 114,068,974 $ 138,149,437 136,796,888 46,578,340 46,403,908 184,727,777 183,200,796 $ 29,807,910 31,947,050 5,199,972 4,661,685 35,007,882 36,608,735 (2,724,583) (3,519,845) 8,257,968 9,287,566 5,533,385 5,767,721 $ 27,083,327 28,427,205 13,457,940 13,949,251 40,541,267 42,376,456 $ 73,425,394 62,716,326 38,623,762 38,588,510 112,049,156 101,304,836 37,640,716 45,653,357 (5,503,362) (6,133,853) 32,137,354 39,519,504 $ 111,066,110 108,369,683 33,120,400 32,454,657 144,186,510 140,824,340 For more detailed information see the statement of net assets on page 13. The remaining balance of unrestricted net assets, $32,137,354, may be used to meet the Borough's ongoing obligations to citizens and creditors. 1 5 (Continued) KODIAK ISLAND BOROUGH I government of $771,364 and $409,873 in interest on long -term debt. t 6 (Continued) I Management's Discussion and Analysis June 30, 2007 Statement of Activities The following condensed table of changes in net assets displays the revenues and expenses for the current and prior year. , Governmental activities Business -type activities Total 2007 2006 2007 2006 2007 2006 Revenues: Program revenues: Charges for services $ 1,147,212 535,045 6,658,643 6,456,710 7,805,855 6,991,755 Operating grants and contributions 1,935,687 1,240,547 - - 1,935,687 1,240,547 Capital grants 184,922 298,852 - - 184,922 298,852 General revenues: Property taxes 9,754,916 9,807,551 - - 9,754,916 9,807,551 Grants and entid ements not restricted to specific programs 3,242,740 3,482,351 3,242,740 3,482,351 Land sale 11,745 363,389 - - 11 ,745 363,389 Severance taxes 1,316,689 1,186,908 - - 1,316,689 1,186,908 Other (237,381) 415,939 35,747 391,895 (201,634) 807,834 Investment earnings 3,745,990 2,798,391 274,126 161,892 4,020,116 2,960,283 Total revenues 21,102,520 20,128,973 6,968,516 7,010,497 28,071,036 27,139,470 , Expenses: General gpvemment 4,755,754 3,984,390 - - 4,755,754 3,984,390 Emergency preparedness 10,384 8,598 - - 10,384 8,598 Community and economic development 786,614 784,002 - - 786,614 784,002 Health and sanitation department 414,144 403,866 - - 414,144 403,866 Education, cultun;, and recreation 161,247 164,053 - - 161,247 164,053 Servicedistrict maintenance 362,189 336,385 - - 362,189 336,385 Education 10,788,188 10,831,588 - - 10,788,188 10,831,588 Interest on long -term debt 1,290,216 1,700,089 - - 1,290,216 1,700,089 Municipal solid waste colle ct ion - - 2,888,821 3,446,453 2,888,821 3,446,453 Hospital facilities - - 1,297,419 1,304,583 1,297,419 1,304,583 Kodiak fisheri es research center - - 1,889,750 1,856,875 1,889,750 1,856,875 911 services - - 64,140 57,194 64,140 57,194 Total expenses 18,568,736 18,212,971 6,140,130 6,665,105 24,708,866 24,878,076 Change in net assets before transfers 2,533,784 1,916,002 828,386 345,392 3,362,170 2,261,394 Transfers 162,643 247,280 (162,643) (247,280) - - Change in net assets 2,696,427 2,163,282 665,743 98,112 3,362,170 2,261,394 Net assets, beginning of year 108,369,683 106,206,401 32,454,657 32,614,835 140,824,340 138,562,946 Net assets, end of)car $ 111,066,110 108,369,683 33,120,400 32,712,947 144,186,510 140,824,340 ' Governmental activities increased the Kodiak Island Borough's net assets by $2,696,427. The major differences were an increase of $612,167 in charges for services, $695,140 in operating grants and contributions, and $947,599 in interest earnings. There were some major changes in expenses including a decrease in general government of $771,364 and $409,873 in interest on long -term debt. t 6 (Continued) I 1 L I l KODIAK ISLAND BOROUGH Management's Discussion and Analysis June 30, 2007 Business -type activities increased the Kodiak Island Borough's net assets by $665,743. The major differences were a $201,933 increase in charges for services and a $112,234 increase in interest earnings and a decrease in municipal solid waste collection of $557,632. The proprietary funds had an operating gain of $828,386 before transfers. 2007 Program Revenue vs. Expense by Governmental Activities 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 1 0 1 G ° �e��� e � ` Qt eQ a � a � eSS �e \ ° d Sa��� a`` ° � a Q.ec� ea � ` ° �� a ��� e � a � `e Ea� cati` ° ��� ae � % ncy N o ,\e \N' �� \ %��eia� 6 \ce a` 5 --e1 * - G � o Set`s \, ■ Revenues ■ Expenses For more detailed information see the statement of activities on page 14. Financial Analysis of the Government's Funds As noted earlier, the Kodiak Island Borough uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. Governmental Funds — The focus of the Kodiak Island Borough's governmental funds is to provide information on near -term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Kodiak Island Borough's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the Kodiak Island Borough's governmental funds reported combined ending fund balances of $67,289,953, an increase of $1,821,438 in comparison to the beginning of the year. $59,922,309 of this total amount constitutes unreserved fund balance, of which $726,775 is designated for 1 7 (Continued) KODIAK ISLAND BOROUGH Management's Discussion and Analysis June 30, 2007 subsequent year expenditures and $59,195,534 is undesignated. The remaining $7,367,644 of fund balance is reserved for long -term interfund borrowings. The main reasons for this increase are as follows: • General fund severance taxes exceeded projections by $299,896. • General fund state revenues exceeded projections by $148,876. • Expenditures in the General fund were lower than projections by $342,174. • Interest earnings in the Facilities fund exceeded transfers out by $1,103,564. • Revenues in the Land Sales fund exceeded expenditures by $81,381. • Revenues in the Fern Fuller Trust fund exceeded expenses by $461,666. The general fund is the main operating fund of the Kodiak Island Borough. At the end of the current fiscal year, unreserved fund balance of the general fund was $2,793,313 with $554,975 reserved for subsequent year's expenditures. As a measure of the general fund's liquidity, it may be useful to compare fund balance to total expenditures. Unreserved fund balance represents 23% of total general fund expenditures. The fund balance of the Kodiak Island Borough's general fund increased by $767,200 during the current fiscal year. The key factors leading to this increase were severance taxes coming in $299,896 over budget, the MIS department coming in $129,579 under budget, and the Community Development Department coming in $124,891 under budget. The facilities fund had a total fund balance of $39,638,397, $32,270,753 of which is unreserved. Fund balance increased $1,103,564 during the year because amounts transferred out were less than investment earnings. Proprietary Funds — The Kodiak Island Borough's proprietary funds provide the same type of information found in the government -wide financial statements, but in more detail. Net assets of the municipal solid waste collection and disposal fund amounted to $4,815,573, the Hospital Facilities fund amounted to $17,490,139, the Kodiak Fisheries Research Center fund amounted to $10,773,726 and the 911 Services fund amounted to $40,962. There was an adjustment made to beginning fund equity to correct an error previously reported in the Municipal Solid Waste Collection and Disposal fund. Proceeds from a State loan were incorrectly reported as revenue in 2006. This correction reduces fund equity and a related receivable by $258,290 in 2006 in accordance with generally accepted accounting principals. 8 (Continued) F u n II KODIAK ISLAND BOROUGH ' Management's Discussion and Analysis June 30, 2007 1 The total increase in net assets for municipal solid waste collection and disposal was $1,208,766. The total decrease in net assets for the hospital facilities fund was$378,357, for the Kodiak Fisheries Research Center it was $164,564 and for the 911 services fund it was $102. Other factors concerning the finances ' of these four funds have already been addressed in the discussion of the Kodiak Island Borough's business -type activities. 3 2 1 0 ■program revenue (in millions) ■expenses (in millions) J u 1 1 General Fund Budgetary Highlights Differences between the original budget and final amended budget can be briefly summarized as follows: • The revenue budget for personal property tax was decreased by $58,000. • The revenue budget for raw fish tax was increased by $158,960. • The revenue budget for the Health and Sanitation Department was increased by $12,380. • The expenditure budget of the Borough Manager's Department was decreased by $67,172. Differences between the final amended budget and actual can be summarized as follows: • Property taxes were $31,645 over budget. This happened because the actual assessed values were higher than what was estimated in the budget. • The State fish revitalization program revenue was $4,235 over budget. This was also due to fish catch exceeding budget projections. • Severance taxes were $299,896 over budget. This was due to fish catches exceeding budget projections, especially ground fish. Z (Continued) Municipal Solid Hospital Facilities 911 Service Kodiak Fisheries Waste Research Center KODIAK ISLAND BOROUGH Management's Discussion and Analysis June 30, 2007 • The Borough Assembly department came in $25,804 under budget. This was due to travel and per diem coming in under budget. • The Borough Clerk's department was $17,185 over budget. This was due to PERS (Public Employee Retirement System) costs coming in over budget. • The Finance department was $11,284 over budget. This was due to PERS costs coming in over budget. • The Management Information Budget came in $129,579 under budget. This was due to computer software and maintenance agreements coming in under budget. • The Engineering/Facilities department came in $39,546 under budget. This was due to personnel services and contracted services coming in under budget. • General and administration was $43,760 under budget. This was due to bad debt expense and bank fees coming in under budget. Capital Asset and Debt Administration Capital Assets — The Kodiak Island Borough's investment in capital assets for its governmental and business type activities as of June 30, 2007, amounted to $111,479,019 (net of accumulated depreciation). This investment in capital assets includes, land, buildings and improvements, improvements other than buildings, machinery and equipment, and construction work -in- progress. The total net decrease in the Kodiak Island Borough's investments in capital assets for the current fiscal year was $2,589,955 which was mostly due to current year depreciation. The following table displays the capital assets (net of depreciation) for the current year. Additional information on the Kodiak Island Borough's capital assets can be found in note 6 on pages 33- 37 of this report. 10 (Continued) 1 1 1 L it 1 Governmental Business -type activities activities Total 200 2006 2007 20 06 2007 2006 Artwork $ — — 16,091 16,091 16,091 16,091 Land 23,187,184 23,187,184 1,661,499 1,661,499 24,848,683 24,848,683 Cons ttuctionwork -in- progress 6,626,411 4,680,384 743,494 491,754 7,369,905 5,172,138 Bui Wings and improve men ts 40,206,914 42,518,781 30,134,142 31,631,807 70,341,056 74,150,588 Improvements otherthan buildings 909,653 1,210,447 2,801,249 3,042,789 3,710,902 4,253,236 Equipment 655,495 629,654 1,423,675 1,760,160 2,079,170 2,389,814 infrastructure 1,839,737 1,983,805 — — 1,839,737 1,983,805 Unclassified plant in service — — 1,273,475 1,254,619 1,273,475 1,254,619 $ 73,425,394 74,210,255 38,053,625 39,858,719 111,479,019 114,068,974 Additional information on the Kodiak Island Borough's capital assets can be found in note 6 on pages 33- 37 of this report. 10 (Continued) 1 1 1 L it 1 1 KODIAK ISLAND BOROUGH ' Management's Discussion and Analysis June 30, 2007 ' Long -term Debt — At the end of the current fiscal year, the Kodiak Island Borough had total bonded debt outstanding of $29,060,000. This entire amount is backed by the full faith and credit of the Borough. The remainder of the Kodiak Island Borough's debt represents capital leases, and landfill closure and post - closure costs. The following table displays the long -term debt for the current year. t The Kodiak Island Borough's total debt decreased $2,146,115 during the current fiscal year. This decrease was due to principal payments throughout the year. ' No major long -term debt activity occurred during the year. The last time the Borough received a rating on a bond issue (General Obligation Refunding Bonds, 1998 Series A) the Borough received an A- rating from Fitch Investors Service. Currently, general obligation bonds are insured to a AAA rating at the time of issuance. There is no general obligation debt limit imposed on the Kodiak Island Borough by the State Constitution, state statutes or the Borough's charter or code. Additional information on the Kodiak Island Borough's long -term debt can be found in note 8 on pages 40 -46 of this report. Economic Factors and Next Year's Budgets and Rates • At June 30, 2007, the unemployment rate for the Kodiak Island Borough was 6.9 %, which is 1.8% lower than last year's rate of 8.7 %. The average unemployment rate for the last 10 years has been 9.9 %. • Property tax revenues received are projected to increase in future years as the Kodiak Island Borough's assessed valuation continues to increase. • The PERS (Public Employees Retirement System) rate has increased from 0% in FY2004 to 22% for FY2008. 11 (Continued) Governmental Business -type activities activities Total 2007 2006 2007 2006 2007 2 General obligation bonds, including premium $ 29,060,000 31,155,000 = = 29,060,000 31,155,000 ' ADEC loans 77,470 83,690 77,470 83,690 Landfill post closure care costs 3,222,587 3,258,937 3,222,587 3,258,937 Long term interfund borrowings — — 7,367,644 7,742,903 7,367,644 7,742,903 Notes payable — — 1,636,924 1,270,210 1,636,924 1,270,210 1 $ 29,137,470 31,238,690 12,227,155 12,272,050 41,364,625 43,510,740 t The Kodiak Island Borough's total debt decreased $2,146,115 during the current fiscal year. This decrease was due to principal payments throughout the year. ' No major long -term debt activity occurred during the year. The last time the Borough received a rating on a bond issue (General Obligation Refunding Bonds, 1998 Series A) the Borough received an A- rating from Fitch Investors Service. Currently, general obligation bonds are insured to a AAA rating at the time of issuance. There is no general obligation debt limit imposed on the Kodiak Island Borough by the State Constitution, state statutes or the Borough's charter or code. Additional information on the Kodiak Island Borough's long -term debt can be found in note 8 on pages 40 -46 of this report. Economic Factors and Next Year's Budgets and Rates • At June 30, 2007, the unemployment rate for the Kodiak Island Borough was 6.9 %, which is 1.8% lower than last year's rate of 8.7 %. The average unemployment rate for the last 10 years has been 9.9 %. • Property tax revenues received are projected to increase in future years as the Kodiak Island Borough's assessed valuation continues to increase. • The PERS (Public Employees Retirement System) rate has increased from 0% in FY2004 to 22% for FY2008. 11 (Continued) � I KODIAK ISLAND BOROUGH , Management's Discussion and Analysis , June 30, 2007 Requests for Information , This financial report is designed to provide a general overview of the Kodiak Island Borough's finances for all those with an interest. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the Kodiak Island Borough, Director of Finance, 710 Mill Bay , Kodiak, Alaska 99615. I.1 Cl J L n I 12 1 ' KODIAK ISLAND BOROUGH Statement of Net Assets ' June 30, 2007 (With summarized financial information for June 30, 2006) IF1 1 13 Component ' Primary government unit Total reporting entity Governmental Business -type School Assets activities activities Total district 2007 2006 Equity in central treasury $ 62,790,419 7,664,499 70,454,918 39,004 70,493,922 65,594,217 Due from primary government - - - 3,450,419 3,450,419 3,493,790 Receivables: State of Alaska 604,827 100,000 704,827 - 704,827 1,102,354 Federal Government 11,093 11,093 11,093 6,355 Property taxes, net of allowance of $15,828 566,740 - 566,740 - 566,740 355,780 ' Severance taxes Deferred charges 37,112 V - - - 37 ,112 - - - 37,112 295,309 39,295 689,654 Inventories 277,007 277,007 377,574 654,581 Prepaid expenses - - - 6,656 6,656 Land sales contracts receivable 231,463 - 231,463 - 231,463 230,034 ' Notes receivable 448,533 - 448,533 - 448,533 501,889 Accounts and other receivables, net 33,856 483,209 517,065 1,367,472 1,884,537 1,888,913 Capital assets: Non - depreciable 29,813,595 2,421,084 32,234,679 - 32 30,036,912 Depreciable, net 43,611,799 35,632,541 79,244,340 286,561 79,530,901 84,164,695 Total $ 138,149,437 46,578,340 184,727,777 5,527,686 190,255,463 188,399,197 Liabilities and Net Assets ' Liabilities: Accounts payable $ 642,679 420,997 1,063,676 274,735 1,338,411 925,800 Retainages payable 11,904 V - 11,904 - 11,904 22,270 ' Accrued compensation and related liabilities 165,935 40,967 206,902 3,501,881 3,708,783 2,791,404 Other accrued liabilities 429,302 168,021 597,323 - 597,323 990,065 Customer deposits 828 V - 828 - 828 678 Unearned revenues 46,907 \/ 155,426 202,333 7,437 209,770 446,995 Due to component units 3,450,419 ✓ - 3,450,419 3,450,419 3,493,790 Internal balances (7,472,557) 7,472,557 _ Noncurrent liabilities: Due within one year 2,278,934 218,150 2,497,084 284,082 2,781,166 2,664,202 ' Due in more than one year Landfill 27,134,297 - 1,636,924 3,222,587 28,771,221 3,222,587 75,610 - 28,846,831 3,222,587 34,120,169 - closure costs Net Pension and OPEB � 3 obligation 394,679 122,311 516,990 919,640 1,436,630 1,210,526 ' Total liabilities 27,083,327 13,457,940 40,541,267 5,063,385 45,604,652 46,665,899 Net assets: Invested in capital assets, net of related debt 73,425,394 38,623,762 112,049,156 286,561 112,335,717 101,437,469 Unrestricted 37,640,716 (5,503,362) 32,137,354 177,740 32,315,094 40,295,829 ' Net assets 111,066,110 33,120,400 144,186,5) 0 464,301 144,650,811 141,733,298 Total $ 138,149,437 46,578,340 184,727,777 5,527,686 190,255,463 188,399,197 t See accompanying notes to financial statements. IF1 1 13 KODIAK ISLAND BOROUGH Statement of Activities Year ended June 30, 2007 (With summarized financial information for the year ended June 30, 2006) See accompanying notes to financial statements. 14 M = = M M M Program revenues Net(expense)revenue and changes in net assets Operating Primary government Component Charges for grants and Capital Governmental Business -type unit school Total reporting entity Functions/Programs Expenses services contributions grants activities activities Total district 2007 2006 Primary government: Governmental activities: General government $ 4,755,754 1,058,330 53,248 151,826 (3,492,350) - (3,492,350) - (3,492,350) (3,571,198) Emergency preparedness 10,384 - - - (10,384) - (10,384) - (10,384) (8,598) Community and economic development 786,614 68,867 25,112 - (692,635) - (692,635) - (692,635) (727,806) Health and sanitation department 414,144 - 77,107 - (337,037) - (337,037) - (337,037) (329,716) Education, culture and recreation 161,247 - - - (161,247) - (161,247) - (161,247) (55,835) Service district maintenance 362,189 20,015 165 - (342,009) - (342,009) - (342,009) (316,385) Primary and secondary education 10,788,188 - - 33,096 (10,755,092) - (10,755,092) - (10,755,092) (10,437,711) Interest on long -term debt 1,290,216 - 1,780,055 - 489,839 - 489,839 - 489,839 (691,278) Total governmental activities 18,568,736 1,147,212 1,935,687 184,922 (15,300,915) - (15,300,915) - (15,300,915) (16,138,527) Business -type activities: Municipal solid waste collection and disposal 2,888,821 3,932,985 - - - 1,044,164 1,044,164 - 1,044,164 218,836 Hospital facilities 1,297,419 1,081,110 - - - (216,309) (216,309) - (216,309) (151,250) Kodiak fisheries research center 1,889,750 1,581,850 - - - (307,900) (307,900) - (307,900) (284,401) 911 services 64,140 62,698 (1,442) (1,442) - (1,442) 8,420 Total business-type activities 6,140,130 6,658,643 - - - 518,513 518,513 - 518,513 (208,395) Total primary government 24,708,866 7,805,855 1,935,687 184,922 (15,300,915) 518,513 (14,782,402) - (14,782,402) (16,346,922) Component units: School district 37,453,349 228,177 4,465,460 (32,759,712) (32,759,712) (30,963,241) Totals - component units 37,453,349 228,177 4,465,460 - (32,759,712) (32,759,712) (30,963,241) General revenues: Property taxes 9,754,916 - 9,754,916 - 9,754,916 9,807,551 Grants and entitlements not restricted to specific programs 3,242,740 - 3,242,740 23,308,352 26,551,092 24,191,994 Land sale 11,745 - 11,745 - 11,745 363,389 Severance taxes 1,316,689 - 1,316,689 - 1,316,689 1,186,908 Support from primary government - - - 8,671,260 8,671,260 8,632,440 Other (237,381) 35,747 (201,634) 335,443 133,809 1,197,927 Investment earnings 3,745,990 274,126 4,020,116 - 4,020,116 2,960,554 Transfers 162,643 (162,643) - Total general revenues and transfers 17,997,342 147,230 18,144,572 32,315,055 50,459,627 48,340,763 Change in net assets 2,696,427 665,743 3,362,170 (444,657) 2,917,513 1,030,600 Net assets, at beginning of year, as restated (see footnote 12). 108,369,683 32,454,657 140,824,340 908,958 141,733,298 140,702,698 Net assets, at end ofyear $ 111,066,110 33,12 144,186,510 464,301 144,650,811 1 See accompanying notes to financial statements. 14 M = = M M M KODIAK ISLAND BOROUGH Balance Sheet Governmental Funds June 30, 2007 (With summarized financial information for June 30, 2006) See accompanying notes to financial statements. 15 Facilities Education and School Bond Other Special Health Debt Capital Governmental Totals Assets General Revenue Fund Service Fund Projects Funds 2007 2 Assets: Cash and investments S 5,666,479 32,076,971 - 20,657,681 4,389,288 62,790,419 59,809,103 Receivables: State of Alaska 45,895 - 347,553 - 211,379 604,827 957,693 Federal Government - - - - 11,093 11,093 6,355 Property taxes, net of allowance ofS15,828 551,732 - - - 15,008 566,740 355,780 Severance taxes - - - - - - 295,309 Land sales contracts - - - - 38,308 38,308 1,538 Notes receivable - - 448,533 448,533 501,889 Accounts and other receivables, net 8,271 - - - 25,585 33,856 391,175 Due from other funds 573,780 298,695 - 872,475 3,427,042 Land sales contracts, due after one year - - - - 193,155 193,155 228,496 Advances to other funds - 7,367,644 - 7,367,644 7,742,903 Total S 6,846,157 39,743,310 347,553 20,657,681 5,332,349 72,927,050 73,717,283 Liabilities and Fund Balances Liabilities: Accounts payable 203,706 - 2,600 200,018 236,355 642,679 V 467,332 Retainages payable - - - - 11,904 11,904 22,270 Accrued compensation and related liabilities 165,935 - - 165,935 V 89,881 Customer deposits - 828 828 V 3,450,419 ✓ 678 3,493,790 Due to component unit 3,450,419 - - - - Due to other funds 14 - 405,333 - 362,215 767,562 3,086,617 Unearned revenues 232,770 104,913 - - 260,087 597,770 1,088,200 Total liabilities 4,052,844 104,913 407,933 200,018 871,389 5,637,097 8,248,768 Fund balances: Reserved: Long -term interfund borrowings - 7,367,644 - - - 7,367 644 7,742,903 Unreserved: General fund: Designated for subsequent year expenditures 554,975 - - - - 554,975 154,296 Undesignated 2,238,338 - - - - 2,238,338 1,871,817 Special revenue funds: Designated for subsequent year expenditures - - 171,800 171,800 420,400 Undesignated - 32,270,753 2,873,768 35,144,521 33,454,865 Debt service funds: Undesignated - - (60,380) - 161,470 101,090 76,898 Capital projects funds: Undesignated - - - 20,457,663 1,253,922 21,711,585 21,747,336 Total fund balances 2,793,313 39,638,397 (60,380) 20,457,663 4,460,960 67,289,953 65,468,515 Total S 6,846,157 39,743,310 347,553 20,657,681 5,332,349 72,927,050 73,717,283 See accompanying notes to financial statements. 15 KODIAK ISLAND BOROUGH Reconciliation of Net Assets Between the Government -wide and Fund Financial Statements Year ended June 30, 2007 Amount reported as fund balance on the governmental funds balance sheet Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. Long -term receivables, delinquent property taxes and loans are not available to pay for current- period expenditures and, therefore, are deferred in the funds: Property taxes Interest receivable Fern Fuller Trust - note receivable Notes receivable - land sales Deferred charges Long -term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds: General obligation bonds payable Bond premium ADEC loans Net pension and OPEB obligation Accrued interest expense Compensated absences Net assets of governmental activities See accompanying notes to the financial statements. $ 67,289,953 ' 73,425,394 $ 232,770 104,913 CS 20,025 ] 193,155 37,112 587,975 (29,060,000) (103,349) (77,470) (394,679) (429,302) (172,412) (30,237,212) $ 111,066,110 1 [I 16 1 I KODIAK ISLAND BOROUGH See accompanying notes to financial statements. Z 3 63� 1 c 373 a3 � I gDq'� - 1 17 Statement of Revenues, Expenditures, and Changes in Fund Balances (Deficit) ' Governmental Funds Year ended June 30, 2007 (With summarized financial information for the year ended June 30, 2006) ' Facilities Education and School Bond Other Special Health Debt Capital Governmental Totals General Revenue Fund Service Fund Projects Funds 2007 2 6 Revenues: Property taxes $ 8,901,327 - 849,355 9,750,682 9,833,846 ' Intergovernmental: State sources 2,175,706 - 1,780,055 - 56,886 4,012,647 3,368,491 Federal sources 1,150,193 - - - 267,210 1,417,403 1,766,926 Land sale proceeds - - - - 47,087 47,087 177,164 Severance taxes 1,316,689 - 1,316,689 1,186,908 ' Licenses, permits, fees, and = _ _ other local revenues 78,720 612,242 690,962 820,286 Investment income 399,149 2,192,964 25,750 900,362 233,384 3,751,609 2,803,466 Other 82,604 - - - 551,321 633,925 125,040 Total revenues 14,104,388 2,192,964 1,805,805 900,362 2,617,485 21,621,004 20,082,127 Expenditures: Current: General government 2,632,127 - 2,650 - 1,869,275 4,504,052 3,950,927 ' Community and economic development Emergency preparedness 702,901 7,884 - - - 83,713 - 786,614 7,884 784,002 6,098 Health and sanitation department 289,503 - - - 83,629 373,132 363,520 Education, culture and 158,161 158,161 161,633 cedist t Service district maintenance - _ _ 498,539 498,539 336,385 Primary and secondary education 8,387,440 8,387,440 8,430,840 Capital outlay: Schools - - - 1,253,518 183,121 1,436,639 464,142 ' General Debt service: = _ 373,038 373,038 2,100,361 332,398 1,814,5 53 Principal 2,100,361 Interest 1,326,806 - 9,543 1,336,349 1,584,763 Total expenditures 12,178,016 - 3,429,817 1,253,518 3,100,858 19,962,209 18,229,261 Excess of revenue over ' (under) expenditures 1,926,372 2,192,964 (1,624,012) (353,156) (483,373) 1,658,795 1,852,866 Other financing (uses) sources: Transfers in - - 1,645,143 - 981,710 2,626,853 1,751,182 Transfers out (1,159,172) (1,089,400) - - (215,638) (2,464,210) (1,503902) ' Net other financing sources (uses) (1,159,172) (1,089,400) 1,645,143 - 766,072 162,643 247,280 Net change in fund balances 767,200 1,103,564 21,131 (353,156) 282,699 1,821,438 2,100,146 Fund balances (deficit),at beginning ofyear 2,026,113 38,534,833 (81,511) 20,810,819 4,178,261 65,468,515 63,368,369 ' Fund balances (deficit), at end of the year $ 2,793,313 39,638,397 (60,380) 20,457,663 4,460,960 67,289,953 65,468,515 See accompanying notes to financial statements. Z 3 63� 1 c 373 a3 � I gDq'� - 1 17 I � KODIAK ISLAND BOROUGH Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Year ended June 30, 2007 Net change in fund balances — total governmental funds $ 1,821,438 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense: Capital outlay $ 2,065,574 Depreciation expense (2,850,435) (784,861) Revenues in the statement of activities that do not provide current financial resources and are deferred in the funds: Deferred property tax 232,770 Interest income 104,913 Land sale proceeds 193,155 Note receivable 20,025 550,863 Revenues that were earned in a prior year and provide current financial resources: Accrued interest income (110,425) Land sale contracts (228,497) Note receivable - Fern Fuller Trust (501,889) Other revenue (228,536) (1,069,347) The issuance of long -term debt provides current financial resources to governmental funds, while the repayment of the principal of long -term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. Also, governmental funds do not report the accrual of interest expense on debt when it is not payable from currently available resources: Accrued interest expense 41,377 Principal repayments 2,101,220 Amortized debt issuance costs (2,183) Bond premium amortization 6,080 2,146,494 Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds: Net pension and OPEB decrease in expense 32,383 Compensated absences, net change (543) 31,840 Change in net assets of governmental activities See accompanying notes to the financial statements. 18 Fj lI 1 I 1 $ 2,696,427 1 1 3 b o ��os _ /sue ' I 1 r 1 S :rprise Funds ' US 1i 30, 2006) ' Municipal Kodiak Other Solid Waste Fisheries Nonmajor Collection and Hospital Research Enterprise Totals ' Assets Disposal Facilities Center Fund 2007 2006 Current assets: Equity in central treasury $ 4,166,043 325,482 3,083,332 89,642 7,664,499 5,722,911 Accrued interest receivable - - - 9,320 9,320 37,886 ' Customer receivables 473,889 = - 473,889 362,723 Due from other funds 40,000 Accounts receivable - State of Alaska 100,000 100,000 144,661 Total current assets 4,739,932 325,482 3,083,332 98,962 8,247,708 6,308,181 ' Inventories - 277,007 - - 277,007 277,008 Capital assets: Non - depreciable 2,135,500 285,584 - - 2,421,084 2,169,344 Depreciable, net 3,634,774 17,975,758 14,022,009 - 35,632,541 37,689,375 Total capital assets 5,770,274 18,261,342 14,022,009 - 38,053,625 39,858,719 Total noncurrent assets 5,770,274 18,538,349 14,022,009 38,330,632 40,135,727 Total $ 10,510,206 18,863,831 17,105,341 98,962 46,578,340 46,443,908 ' Liabilities and Fund Equities Current liabilities: Accounts payable $ 327,895 1,048 34,054 58,000 420,997 224,495 Deferred revenue - - 155,426 - 155,426 421,110 Accrued compensation and - 40,967 39,247 - - related liabilities 25,947 15,020 Other accrued liabilities 168,021 - 168,021 246,945 Current portion of capital lease obligations 218,150 - - 218,150 272,441 ' Current portion of advances - from other funds - 62,693 335,000 397,693 375,259 Due to other funds - 104,913 - 104,913 380,425 ' Total current liabilities 740,013 63,741 644,413 58,000 1,506,167 1,959,922 Noncurrent liabilities: Notes payable 1,636,924 1,636,924 1,270,210 Advances from other funds - 1,309,951 5,660,000 - 6,969,951 7,367,644 Net pension and OPEB obligation 95,109 - 27,202 - 122,311 132,538 ' Accrual for landfill closure and postclosure costs 3,222,587 - - - 3,222,587 3,258,937 ' Total noncurrent liabilities 4,954,620 1,309,951 5,687,202 - 11,951,773 12,029,329 Total liabilities 5,694,633 1,373,692 6,331,615 58,000 13,457,940 13,989,251 Fund equities: Invested in capital assets, ' net of related debt 4,133,350 20,468,403 14,022,009 - 38,623,762 38,588,510 Unrestricted 682,223 (2,978,264) (3,248,283) 40,962 (5,503,362) (6,133,853) Total fund equities 4,815,573 17,490,139 10,773,726 40,962 33,120,400 32,454,657 Total $ 10,510,206 18,863,831 17,105,341 98,962 46,578,340 46,443,908 ' See accompanying notes to financial statements. { l S ktig` � I1 19 Operating revenues: Solid waste collection Solid waste disposal Charges for services /customer charges Lease income Other Total operating revenues Operating expenses: Personnel services Solid waste collection Refuse disposal Contracted services Maintenance and repairs Landfill closure and postclosure costs Depreciation General and administration Miscellaneous Telephone services Recycling services Contributions Total operating expenses Operating income (loss) Nonoperating revenues (expenses): Loss on disposal of capital assets Contribution to Providence Hospital Investment income Interest expense Income (loss) before transfers Transfers in Transfers out Net other financing sources (uses) Net change in fund equity Fund equity, at beginning of year as originally stated Prior period adjustment Fund equity, at beginning of year, as restated (see footnote 12) Fund equity, at end of year KODIAK ISLAND BOROUGH Statement of Revenues, Expenses, and Changes in Fund Equity Proprietary Funds - Business -type Activities - Enterprise Funds Year ended June 30, 2007 (With summarized financial information for the year ended June 30, 2006) Municipal Kodiak Other Solid Waste Fisheries Nonmajor Collection and Hospital Research Enterprise Totals Disposal Facilities Center Fund 2007 2006 $ 2,748,563 - - - 2,748,563 2,720,454 1,184,422 - - - 1,184,422 944,835 - 62,698 62,698 65,614 1,081,110 1,579,600 - 2,660,710 2,725,807 27,771 - - - 27,771 409,595 3,960,756 1,081,110 1,579,600 62,698 6,684,164 6,866,305 672, 140 5,000 227,139 3,000 907,279 954,186 1,123,231 - - - 1,123,231 1,352,618 265,315 - - - 265,315 306,150 176,045 - - - 176,045 261,073 29,535 12,425 - - 41,960 47,367 (36,350) - - - (36,350) 245,006 271,947 1,073,275 742,613 - 2,087,835 2,067,594 198,236 - 420,542 - 618,778 561,833 - - 72,043 178 72,221 64,186 60,962 60,962 54,000 168,963 - - - 168,963 90,000 11,783 - - - 11,783 5,258 2,880,845 1,090,700 1,462,337 64,140 5,498,022 6,009,271 1,079,911 (9,590) 117,263 (1,442) 1,186,142 857,034 - - - (17,700) (150,000) - - (150,000) (150,000) 122,405 7,045 143,336 1,340 274,126 161,892 - (56,719) (425,163) - (481,882) (505,834) 1,202,316 (209,264) (164,564) (102) 828,386 345,392 6,450 66,500 - - 72,950 72,950 - (235,593) - - (235,593) (320,230) 6 (169,093) - - (162,643) (247,280) 1,208,766 (378,357) (164,564) (102) 665,743 98,112 3,606,807 17,868,496 10,938,290 41,064 32,454,657 32,614,835 - - (258,290) r. 1 1 n 3,606,807 17,868,496 10,938,290 41,064 32,454,657 32,356,545 $ 4,815,573 17,490,139 10,773,726 40,962 33,120,400 32,454,657 ' See accompanying notes to financial statements. 20 KODIAK ISLAND BOROUGH Statement of Cash Flows Proprietary Funds - Business -type Activities - Enterprise Funds Year ended June 30, 2007 (With summarized financial information for the year ended June 30, 2006) Cash flows from operating activities: Cash received from customers Payments to suppliers Payments to employees Internal activity - payments to /from other funds Net cash provided (used) by operating activities Cash flows from noncapital financing activities: Contribution to Providence Hospital Transfers in Transfers out Net cash provided (used) by noncapital financing activities Cash flows from capital and related financing activities: Acquisition and construction of capital assets Loss on disposal of assets Interest paid on notes payable, capital leases, and interfund borrowings Principal payments on long -term interfund borrowing Proceeds from issuance of notes payable Principal payments on capital lease obligation Net cash provided (used) by capital and related financing activities Cash flows from investing activities: Interest and dividends on investments Net (increase) decrease in investments Net cash provided (used) by investing activities Net change in cash and cash equivalents Cash and equivalents, at beginning of year Cash and equivalents, at the end ofyear Municipal Kodiak Other Solid Waste Fisheries Nonmajor Collection and Hospital Research Enterprise Totals Disposal Facilities Center Fund 2007 2006 $ 4,152,541 660,000 1,735,026 62,698 6,610,265 6,102,469 (1,783,147) (12,999) (622,393) (3,140) (2,421,679) (2,826,035) (681,222) (5,000) (226,563) (3,000) (915,785) (764,052) - (35,000) 134,488 - 99,488 224,925 1,688,172 607,001 1,020,558 56,558 3,372,289 2,737,307 - (150,000) (150,000) (150,000) 6,450 66,500 72,950 72,950 - (235,593) - - (235,593) (320,230) 6,450 (319,093) (312,643) (397,280) (127,534) (155,207) (282,741) (777,320) - (17,700) - (56,719) (425,163) - (481,882) (505,834) - (60,259) (650,000) - (710,259) (347,919) 108,424 - - - 108,424 - (54,291) - (54,291) - (73,401) (272,185) (1,075,163) - (1,420,749) (1,648,773) 132,480 7,045 166,231 (3,065) 302,691 161,892 132,480 7,045 166,231 (3,065) 302,691 161,892 1,753,701 22,768 111,626 53,493 1941,588 853,146 2,412,342 302,714 2,971,706 36,149 5,722,911 4,869,765 $ 4,166,043 325,482 3,083,332 89,642 7,664,499 5,722,911 (continued) 21 KODIAK ISLAND BOROUGH Statement of Cash Flows Proprietary Funds – Business -type Activities – Enterprise Funds, Continued See accompanying notes to financial statements. 22 Municipal Kodiak Other Solid Waste Fisheries Nonmajor Collection and Hospital Research Enterprise Totals Disposal Facilities Center Fund 2007 2 Reconciliation of operating income (loss) to net cash provided by operating activities: Operating income (loss) S 1,079,911 (9,590) 117,263 (1,442) 1,186,142 857,034 Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation 271,947 1,073,275 742,613 — 2,087,835 2,067,594 Changes in assets and liabilities that provided (used) cash: Customer receivables 191,785 191,785 (330,503) Due to /from other funds — (35,000) 134,488 — 99,488 224,925 Accounts payable 134,364 (574) 4,713 58,000 196,503 (132,032) Unearned revenues — (421,110) 155,426 — (265,684) (433,334) Accrual for landfill closure and postclosure costs (36,350) (36,350) 245,006 Accrued compensation and related liabilities (9,082) — 576 — (8,506) 139,523 Other accrued liabilities 55,597 — (134,521) — (78,924) 99,094 Net cash provided (used) by operating activities S 1,688,172 607,001 1,020,558 56,558 3,372,289 2,737,307 Noncash capital and related financing activities: Interest S — (56,719) (425,163) — (481,882) 18,132 See accompanying notes to financial statements. 22 1 L� r� 1 1 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements June 30, 2007 (1) Summary of Significant Accounting Policies (a) Reporting Entity The Kodiak Island Borough (the Borough), Alaska, was organized to perform the municipal duties allowed by Alaska Statutes and as directed by its residents. As required by accounting principles generally accepted in the United States of America, these financial statements present the government and its component unit, an entity for which the government is considered to be financially accountable. The discretely presented component unit is reported in a separate column in both the government -wide and fund financial statements to emphasize it is legally separate from the government. The Borough reviewed its relationship with other organizations and determined that the following organization is a component unit. Discretely Presented Component Unit The Borough has delegated the operating responsibility for public education to the Kodiak Island Borough School District (School District). In accordance with statutes, the Borough retains ownership of the education related capital assets and incurs the debt, if necessary, to finance the acquisition and construction of school facilities. The Borough Assembly approves the total annual budget of the School District and may, during the year, increase or decrease the total appropriation. Complete financial statements for the component unit may be obtained at the entity's administrative offices for the Kodiak Island Borough School District. Kodiak Island Borough School District 722 Mill Bay Road Kodiak, Alaska 99615 (b) Government -Wide and Fund Financial Statements h 1 1 The government -wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the activities of the primary government and its component unit. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from the legally separate component unit 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 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. 23 1 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements June 30, 2007 Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds, if applicable, are reported as separate columns in the fund financial statements. (c) Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period except for grant revenues which are recognized when the related expenditure is incurred irrespective of when the cash is received. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes and interest associated with the current fiscal period are all considered to be susceptible to accrual and have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the government. The government reports the following major governmental funds: The General Fund is the government's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Facilities Special Revenue Fund accounts for the proceeds from the sale of Shuyak Island. The single most important goal is to preserve the principal of the fund. Interest earnings, after inflation proofing, can be used for debt service, building insurance and capital projects. I II 1 I C I LJ The Education and Health Debt Service Fund was established to finance and account for the payment of interest and principal on all general obligation debts, serial and term, other than that , payable exclusively from special assessments and revenue debt issued for and serviced by a government enterprise fund. The School Bond Capital Projects Fund accounts for the construction and major maintenance ' activities for the Borough's educational facilities funded by school bonds. f 24 (Continued) I ' KODIAK ISLAND BOROUGH ' Notes to Basic Financial Statements June 30, 2007 25 (Continued) The government reports the,following major proprietary funds: ' The Municipal Solid Waste Collection and Disposal Fund accounts for the collection and disposal of solid waste and recycling services for the Kodiak Island Borough. The Hospital Facilities Fund accounts for rents on the Borough -owned hospital; hospital related ' state revenue sharing; and other hospital related revenue. In turn, it purchases hospital equipment and makes debt service payments on hospital related debt. The Kodiak Fisheries Research Center Fund accounts for rents and expenses on the Borough -owned Kodiak Fisheries Research Center. The three tenants: NOAA, Alaska Department of Fish & Game and University of Alaska, Fairbanks pay lease funds to participate in this multi - agency research ' facility committed to the preservation of the North Pacific marine ecosystem and resources. Private - sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government -wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private- sector guidance for their business -type activities and enterprise funds, subject to this same limitation. The government has elected not to follow subsequent private- sector guidance. As a general rule the effect of interfund and activity has been eliminated from the government -wide ' financial statements. Exceptions to this general rule are charges between various functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. ' Amounts reported as program revenues include (1) charges to customers or applicants for goods, services, or privileges provided, (2) operating grants and contributions, and (3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the enterprise funds are charges to customers for sales and services and lease revenues. ' Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. ' When both restricted and unrestricted resources are available for use, it is the government's policy to use restricted resources first, then unrestricted resources as they are needed. 25 (Continued) 1 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements June 30, 2007 (d) Assets, Liabilities, and Fund Equity/Net Assets Cash and Investments Cash and temporary investments of Borough funds are pooled in a central treasury. Each fund's portion of this pool is displayed on the balance sheet as "Cash and Temporary Investments ". Investments are carried at fair value, as determined by quoted market prices. The Alaska Municipal League Investment Pool (AMLIP) is considered to be an external investment pool as defined by GASB Statement No. 31. AMLIP is not SEC - registered. Alaska Statute 37.23 establishes regulatory oversight of the pool. The law sets forth numerous requirements regarding authorized investments and reporting. The pool is incorporated in the State of Alaska as a nonprofit corporation and reports to its Board of Directors. Alaska Statute 37.23.050 requires the retention of an investment manager. The manager is required to produce monthly disclosure statements to the pool. The pool has also retained an investment advisor to ensure compliance with investment policies. All participation in the pool is voluntary. The pool must maintain a dollar- weighted average maturity of 90 days or less, and only purchase instruments having remaining maturities of 397 days or less. On a monthly basis, the investments in the pool are reviewed for fair value by an independent pricing service. All highly liquid investments, excluding restricted assets, with original maturities of ninety days or less are considered to be cash equivalents. For purposes of the Statements of Cash Flows, equity in central treasury held by enterprise funds are treated as cash equivalents. Investments for the government, as well as the component unit, are reported at fair value, as determined by quoted market prices. The reported value of the pool is the same as the fair value of the pool shares. Receivables and Payables Activity between funds that are representative of lending /borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to /from other funds" (i.e., the current portion of interfund loans) or "advances to /from other funds" (i.e., the noncurrent portion of interfund loans). Any residual balances outstanding between the governmental activities and business -type activities are reported in the government -wide financial statements as "internal balances." Internal balances used to acquire capital assets are eliminated from the invested in capital assets, net of related debt, portion of net assets. Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources. Inventories and Prepaid Items Expendable operating supplies of the Borough are accounted for using the purchase method. There are no significant amounts of such inventories on hand at year end. All of the Hospital Facilities Enterprise Fund inventory is assigned to Providence as of April 21, 1997 which, by the terms of the 1 J 1 1 1 C 0 26 (Continued) I 1 ' KODIAK ISLAND BOROUGH ' Notes to Basic Financial Statements June 30, 2007 lease agreement for the hospital facilities (see note 11 a), are required to be returned to the Borough at the termination of the lease in at least equal value. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the government -wide and fund financial statements. ' Capital Assets ' Compensated Absences It is the Borough's policy to permit employees to accumulate earned but unused annual leave benefits. All annual leave pay is accrued when incurred in the government -wide and proprietary fund ' financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. ' Long -Term Obligations In the government -wide financial statements, long -term debt and other long -term obligations are reported as liabilities in the applicable governmental activities, business -type activities, or ' proprietary fund balance sheet. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as I deferred charges and amortized over the term of the related debt. 1 27 (Continued) Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, street ' lights, and similar items including those acquired prior to fiscal years ended after June 30, 1980), are reported in the applicable governmental or business -type activities columns in the government -wide financial statements. Capital assets are defined by the Borough as assets with an initial, individual ' cost of more than $5,000 (amount not rounded) and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives 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. There was no interest capitalized during the year. Property, plant, and equipment of the primary government is depreciated using the straight line method over the following estimated useful lives: Buildings and improvements 10 -40 years Improvements other than buildings 10 -15 years Equipment 5 -10 years ' Infrastructure 40 years ' Compensated Absences It is the Borough's policy to permit employees to accumulate earned but unused annual leave benefits. All annual leave pay is accrued when incurred in the government -wide and proprietary fund ' financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. ' Long -Term Obligations In the government -wide financial statements, long -term debt and other long -term obligations are reported as liabilities in the applicable governmental activities, business -type activities, or ' proprietary fund balance sheet. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as I deferred charges and amortized over the term of the related debt. 1 27 (Continued) KODIAK ISLAND BOROUGH Notes to Basic Financial Statements June 30, 2007 In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Interest on long -term obligations is recorded as an expenditure when due. Fund Equity In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change. Net Assets In the government -wide financial statements, net assets are reported in three categories; net assets invested in capital assets, net of related debt; restricted net assets; and unrestricted net assets. Net assets are reported as restricted when constraints placed on net asset use are either externally imposed by creditors (such as through debt covenants), grantors, contributors provisions or laws or regulations of other governments or imposed by law through constitutional provisions or enabling legislation. (e) Revenues, Expenditures, and Expenses Property Taxes Property taxes are based on the assessed value of taxable property as of January 1. Pursuant to Alaska Statute 29.45.240, the Borough establishes the mill rate on or before June 15th. Tax bills are then mailed on or before July 1 st. Taxes are due when billed and generally become delinquent on or after October 16th. The Borough code also provides for split payments. If a taxpayer avails himself of this provision, one -half must be paid on or before August 15th and the remainder becomes due on or before November 15th (in lieu of October 15th). Borough property tax revenues are recognized in the fiscal year in which they become measurable and available, which is generally the year following the year the tax bills are mailed. All taxes are delinquent on November 16th, and a tax foreclosure process may commence as outlined in Alaska Statutes Title 29. Briefly, this entails the petition for Judgment of Foreclosure signed by the District Court Judge and the publication of all delinquent taxes in the local newspaper for four consecutive weeks. Real property tax liens are enforced by one general foreclosure proceeding against the delinquent properties. 28 (Continued) 1 1 p 1 1 0 t KODIAK ISLAND BOROUGH Notes to Basic Financial Statements June 30, 2007 Severance Taxes Severance taxes are based on the amount and value of natural resources severed from the environment. Types of resources taxed include seafood, gravel and mineral resources, and timber. Severance tax returns are sent to appropriate companies (as determined by the Borough Assessor) 1 and are returned to the Borough Finance Department. The returns are filed quarterly, and are due by the end of the month following the quarter's end. Borough severance tax revenues are recognized in the fiscal year in which they become measurable and available. ' Intergovernmental Revenue State - shared revenues, safe communities, State - education related entitlement programs and 1 State - levied taxes, the proceeds of which are distributed to local governments, are recorded in the fiscal year to which they relate, including accrual at year end if final payments due are measurable and received within approximately two months after year end. State of Alaska and Federal government cost reimbursable grants and contracts are recorded to the extent of allowable expenditures in the period in which the expenditures were incurred. ' Operating and Nonoperating Revenue Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods ' in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the Municipal Solid Waste Collection and Disposal Fund and 911 Services Fund are charges to customers for services. The principal operating revenues of the Hospital Facilities Fund and the Kodiak Fisheries Research Center Fund are rents from customers. Operating expenses for proprietary funds include costs of services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. Revenue from Investments and Property ' Amounts earned on investment of available cash balances and the rental of building facilities are recorded in the period to which they relate, including accrual at year end of the balance due, and unrealized gains and losses on investments held at fiscal year end. t Land Sales Proceeds and Other Local Revenues Amounts received pursuant to land sale contracts are recorded on the accrual basis. ' Other local revenues are recorded on a basis consistent with their nature in relation to measurement and availability standards. ' (fl Cash Flows All highly liquid investments, excluding restricted assets, with original maturities of three months or less are considered cash equivalents for purposes of the statement of cash flows. 1 29 (Continued) 1 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements June 30, 2007 (g) Use of Estimates Preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in these financial statements. Actual results may differ from the estimates. Significant estimates include the allowance for doubtful accounts, the useful lives of assets and related accumulated depreciation, and accrued landfill closure and post - closure care costs. (2) Stewardship, Compliance, and Accountability (a) Excess of Expenditures over Appropriations General Fund The following department expenditures exceeded their appropriations: Department Excess General government: 18,936 Borough manager $ 4,949 Borough clerk 17,185 Finance department 11,284 Assessing department 1,467 Community and Economic Development: 13,225 Building official 8,916 Economic development 2,816 $ 46,617 Special Revenue Funds The following fund expenditures exceeded their budget: Fund Excess Kodiak Airport Fire District $ 1 Monashka Bay Road Service Area 18,936 Service Area No.1 76,350 Womens Bay Road Service Area 11,931 Bay View Road Service Area 1,570 Kodiak Arts Council 1,079 Tourism Development 13,225 $ 123,092 t 1 fl 1 1 I 1 30 (Continued) I 1 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements June 30, 2007 C L 11 1 In addition to the investments listed above, Kodiak Island Borough also had cash equivalents of $70,454,918. Interest Rate Risk The Borough does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. Credit Risk Statutes authorize the Borough to invest in obligations of the United States, the State of Alaska and its political subdivisions, savings accounts, certificates of deposit, banker's acceptances, repurchase agreements, and such other legal security instruments. The Borough Code requires all investments to be collateralized and /or insured. 31 (Continued) (b) Deficit Fund Equity The individual fund deficits at June 30, 2007, are as follows: Special Revenue Funds: Education and Health Debt Service Fund $ 60,380 Bay View Road Service Area 1,133 Child Care Assistance Program 1,260 L.E.P.C. 15,096 Trinity Acres Paving 140,212 $ 218,081 ' The deficit in the Trinity Acres Paving Special Revenue Fund is anticipated to be funded by a special ' assessment that began in 2006. (3) Cash and Investments ' As of June 30, 2007, the Borough had the following investments: Investment maturities (in years) Fair Less Investment type value than 1 1 to 5 5 to 10 U.S. agency securities: Federal Home Loan Bank $ 27,151,917 15,156,567 11,995,350 — 1 Federal Home Loan Mortgage Corporation 11,817,527 8,992,670 2,824,857 Federal National Mortgage Association 13,883,120 9,921,880 3,961,240 Federal Farm Credit Bank 3,916 3,916,240 — — 1 Alaska Municipal League Investment Pool 11,442,800 11,442,800 $ 68,211,604 49,430,157 18,781,447 C L 11 1 In addition to the investments listed above, Kodiak Island Borough also had cash equivalents of $70,454,918. Interest Rate Risk The Borough does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. Credit Risk Statutes authorize the Borough to invest in obligations of the United States, the State of Alaska and its political subdivisions, savings accounts, certificates of deposit, banker's acceptances, repurchase agreements, and such other legal security instruments. The Borough Code requires all investments to be collateralized and /or insured. 31 (Continued) i KODIAK ISLAND BOROUGH Notes to Basic Financial Statements June 30, 2007 At June 30 2007 the Borough's U.S. agencies bonds were rated AAA b Standard & Poor and Fitch ' g g Y Ratings, and Aaa by Moody's Investor Service. At June 30, 2007, the Borough's investment in the Alaska Municipal League Investment Pool was unrated. Concentration of Credit Risk The Borough places no limit on the amount the Borough may invest in any one issuer. At June 30, 2007, r the Borough had 72 percent of its investments in U.S. Government agency securities. Custodial Credit Risk — Deposits In the case of deposits, this is the risk that in the event of a bank failure, the Borough's deposits may not be returned to it. The Borough requires all deposits to be insured or collateralized. At June 30, 2007, the ' carrying amount of the Borough deposits was $1,075,000 and the corresponding bank balance was $478,499. The Federal Deposit Insurance Corporation insures $100,000 of the Borough's bank balance. Government and Agency Obligations and General Obligation Bonds of a Municipality collateralize the remaining $378,499. Collateral, in the amount of $1,076,812, is held by Bank of New York, the pledging ' financial institution's agent, in the Borough's name. Custodial Credit Risk — Investments ' For an investment, this is a risk that, in the event of the failure of the counterparty, the Borough will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The Borough had no debt securities exposed to custodial credit risk at June 30, 2007. (4) Annual Appropriation to the School District An annual appropriation is made to the School District. In addition to the annual appropriation, the ' Borough provides the School District, without charge, general liability and property insurance, data processing services, the annual independent audit, mental health services, and grounds maintenance services. , (5) Receivables Education and Other General Health Debt Governmental Enterprise Fund Service Fund Funds Funds Total Receivables: Grants $ 45,895 347,553 222,472 — 615,920 — Taxes 567,560 — 15,008 582,568 Customers and other 8,271 — 63,893 483,209 555,373 Notes receivable — — 448,533 — 448,533 Gross receivables 621,726 347,553 749,906 483,209 2,202.394 Less: allowance for uncollectibles (15,828) — — — (15,828) Net total receivables $ 605,898 347,553 749,906 483,209 2,186,566 32 (Continued) I KODIAK ISLAND BOROUGH Notes to Basic Financial Statements June 30, 2007 (6) Capital Assets As noted in Footnote (11), the Borough leases the Kodiak Island Hospital and Care Center to Sister of Providence. The value of the leased assets and associated depreciation are reflected below in the Hospital Facilities Fund on page 35. Capital asset activity for the year ended June 30, 2007 was as follows: Beginning Ending Balance Increase Decrease Balance Governmental activities: Capital assets, not being depreciated: Land Construction work -in- progress Total Capital assets, being depreciated: Buildings and improvements Improvements other than buildings Equipment Infrastructure Total Less accumulated depreciation for: Buildings and improvements Improvements other than buildings Equipment Infrastructure Total Total capital assets being depreciated Total governmental activities, net $ 23,187,184 23,187,184 4,680,384 1,946,027 — 6,626,411 27,867,568 1,946,027 — 29,813,595 90,579,601 — — 90,579,601 3,964,683 — — 3,964,683 1,929,238 119,547 — 2,048,785 5,762,722 — — 5,762,722 102,236,244 119,547 — 102,355,791 48,060,820 2,311,867 — 50,372,687 2,754,236 300,794 — 3,055,030 1,299,584 93,706 — 1,393,290 3,778,917 144,068 — 3,922,985 55,893,557 2,850,435 — 58,743,992 46,342,687 (2,730,888) — 43,611,799 $ 74,210,255 (784,861) — 73,425,394 33 (Continued) KODIAK ISLAND BOROUGH Notes to Basic Financial Statements June 30, 2007 Business -type activities: Municipal Solid Waste Collection and Disposal Fund capital assets, not being depreciated: Land Construction work -in- progress Total Capital assets, being depreciated: Unclassified utility plant in service Improvements other than buildings Machinery and equipment Total Less accumulated depreciation for: Unclassified utility plant in service Improvements other than buildings Machinery and equipment Total Total capital assets being depreciated, net Total Municipal Solid Waste Collection and Disposal Fund, net Beginning Increase Ending Decrease Balance $ 1,651,248 — — 1,651,248 387,719 96,533 — 484,252 2,038,967 96,533 — 2,135,500 2,178,733 — — 2,178,733 2,288,438 — — 2,288,438 1,745,408 31,001 — 1,776,409 6,212,579 31,001 — 6,243,580 858,138 47,120 — 905,258 410,875 127,321 — 538,196 1,067,846 97,506 — 1,165,352 2,336,859 271,947 — 2,608,806 3,875,720 (240,946) — 3,634,774 $ 5,914,687 (144,413) — 5,770,274 34 (Continued) KODIAK ISLAND BOROUGH Notes to Basic Financial Statements June 30, 2007 35 (Continued) Beginning Ending Balance Increase Decrease Balance Hospital Facilities Fund capital assets, not being depreciated: Artwork $ 16,091 16,091 Land 10,251 — — 10,251 Construction work -in- progress 104,035 155,207 — 259,242 Total 130,377 155,207 — 285,584 Capital assets, being depreciated: Buildings 27,131,044 — — 27,131,044 Improvements other than buildings 401,046 — — 401,046 Machinery and equipment 4,876,849 — (1,270,311) 3,606,538 Total 32,408,939 — (1,270,311) 31,138,628 Less accumulated depreciation for: Buildings 9,178,646 902,985 — 10,081,631 Improvements other than buildings 85,328 14,176 — 99,504 Machinery and equipment 4,095,932 135,854 (1,250,051) 2,981,735 Total 13,359,906 1,053,015 (1,250,051) 13,162,870 Total capital assets being depreciated, net 19,049,033 (1,053,015) (20,260) 17,975,758 Total Hospital Facilities Fund, net $ 19,179,410 (897,808) (20,260) 18,261,342 Kodiak Fisheries Research Center Fund capital assets, being depreciated: Buildings $ 17,840,410 — — 17,840,410 Improvements other than buildings 1,021,998 — — 1,021,998 Machinery and equipment 1,157,540 — — 1,157,540 Total 20,019,948 — — 20,019,948 Less accumulated depreciation for: Buildings 4,161,001 594,680 — 4,755,681 Improvements other than buildings 238,466 34,067 — 272,533 Machinery and equipment 855,859 113,866 — 969,725 Total 5,255,326 742,613 — 5,997,939 Total Kodiak Fisheries $ 14,764,622 (742,613) — 14,022,009 35 (Continued) KODIAK ISLAND BOROUGH Notes to Basic Financial Statements June 30, 2007 36 (Continued) Beginning Ending Balance Increase Decrease Balance Total business -type activities: Capital assets, not being depreciated: Artwork $ 16,091 — — 16,091 Land 1,661,499 — — 1,661,499 Construction work -in- progress 491,754 251,740 — 743,494 Total 2,169,344 251,740 — 2,421,084 Capital assets, being depreciated: Unclassified utility plant in service 2,178,733 2,178,733 Buildings 44,971,454 — — 44,971,454 Improvements other than buildings 3,711,482 3,711,482 Machinery and equipment 7,779,798 31,001 (1,270,311) 6,540,488 Total 58,641,467 31,001 (1,270,311) 57,402,157 Less accumulated depreciation for: Unclassified utility plant in service 858,138 47,120 — 905,258 Buildings 13,339,647 1,497,665 — 14,837,312 Improvements other than buildings 734,669 175,564 — 910,233 Machinery and equipment 6,019,638 347,226 (1,250,051) 5,116,813 Total 20,952,092 2,067,575 (1,250,051) 21,769,616 Total capital assets being depreciated, net 37,689,375 (2,036,574) (20,260) 35,632,541 Total business -type activities, net $ 39,858,719 (1,784,834) (20,260) 38,053,625 36 (Continued) 1 ' KODIAK ISLAND BOROUGH ' Notes to Basic Financial Statements June 30, 2007 ' w departments and functions of the primary Depreciation expense as charged to the dep n s eta p ry overnment g as - follows: Governmental activities: General government $ 331,479 Fire services 77,782 Emergency preparedness 2,500 Health and sanitation department 37,926 Primary and secondary education 2,400,748 Total — governmental activities 2,850,435 Business -type activities: Municipal Solid Waste Collection and ' Disposal 271,947 Hospital Facilities 1,073,275 Kodiak Fisheries Research Center 742,613 Total — business -type activities 2,087,835 Total $ 4,938,270 (7) Interfund Receivables, Payables and Transfers (a) Interfund Receivables and Payables Interfund receivables and payables at June 30, 2007 consisted of the balances of short-term interfund loans all of which are expected to be paid within one year. A summary of interfund payables at June 30, 2007, is as follows: receivables and Receivable Fund Payable Fund Amount General Fund Education and Health Debt Service Fund $ 405,333 Facilities Special Revenue Fund Other Governmental Funds 362,215 General Fund 14 Kodiak Fisheries Center 104,913 $ 872,475 ' Advances from/to other funds: ' Receivable Fund Payable Fund Facilities Special Revenue Fund Hospital Facilities Fund Amount $ 1,372,644 Kodiak Fisheries Research Center 5,995,000 $ 7,367,644 ' 37 (Continued) KODIAK ISLAND BOROUGH Notes to Basic Financial Statements June 30, 2007 The outstanding balances between funds result from the time lag between the dates that (1) interfund goods and services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting system, and (3) payments between funds are made. (b) Long -Term Interfund Borrowings In October 1997 the Facilities Special Revenue Fund loaned $8,000,000 to the Kodiak Fisheries Research Center Enterprise Fund. The loan from the Facilities Special Revenue Fund is accounted for as a long -term interfund advance, while the liability in the Kodiak Fisheries Research Center Enterprise Fund is accounted for as a long -term interfund borrowing. The advance bears interest at 7 %, and the scheduled payments for the next five fiscal years ended and thereafter are as follows: Principal Interest Year ending June 30: 2008 2009 2010 2011 2012 2013 -2017 2018 -2019 335,000 360,000 385,000 410,000 440,000 2,700,000 1,365,000 $ 5,995,000 407,925 383,600 357,525 329,700 299,950 975,800 97,125 2,851,625 Total 742,925 743,600 742,525 739,700 739,950 3,675,800 1,462,125 8,846,625 In July 2003, the Facilities Special Revenue Fund loaned $1,600,000 to the Hospital Facilities Enterprise Fund in order to help fund current operations. The loan from the Facilities Special Revenue Fund is accounted for as a long -term interfund advance, while the liability in the Hospital Facilities Enterprise Fund is accounted for as a long -term interfund borrowing. The advance bears interest at 4 %, and the scheduled payments for the next five fiscal years and thereafter are as follows: Total 116,978 116,978 116,978 116,978 116,978 584,892 584,892 116,979 1 1 $ 1,372,644 499,009 1,871,653 I i kV (Continued) I Principal Interest Year ending June 30: 2008 62,693 54,285 2009 65,226 51,752 2010 67,861 49,117 2011 70,603 46,375 2012 73,455 43,523 2013 -2017 414,262 170,630 2018 -2022 504,983 79,909 2023 113 ,561 3,418 Total 116,978 116,978 116,978 116,978 116,978 584,892 584,892 116,979 1 1 $ 1,372,644 499,009 1,871,653 I i kV (Continued) I 1 ' KODIAK ISLAND BOROUGH Notes to Basic Financial Statements June 30, 2007 (c) Transfers Interfund transfers been made in accordance with budget ordinances. Funds are transferred from one fund to support expenditures of other funds in accordance with the authority established for the individual fund. Transfers between fund types during the year ended June 30, 2007, were as follows: Transfers In Transfers Out Governmental Funds Enterprise Funds Education Municipal and Health Other Solid Waste Hospital Debt Service Governmental Collection and Facilities Fund Funds Disposal Fund Fund ' Major Governmental Funds: — General Fund $ 695,550 457,172 6,450 1,159,172 Facilities Special Revenue Fund 714,000 375,400 — — 1,089,400 Other Governmental Funds — 149,138 — 66,500 215,638 Major Enterprise Fund: Hospital Facility Fund 235,593 — 235,593 Total transfers $ 1,645,143 981,710 6,450 66,500 2,699,803 1 A summary of significant transfers are as follows: • The General Fund transferred $695,550 to the Education and Health Debt Service Fund to pay for debt service on general government debt. • The General Fund transferred $390,000 to the Borough Capital Projects Fund to pay for seismic repairs to school buildings • The Facilities Special Revenue Fund transferred $185,400 to the Building and Grounds Special Revenue Fund to pay for building insurance. • The Facilities Special Revenue Fund transferred $714,000 to the Education and Health Debt Service Fund for debt service on hospital bonds. • The Facilities Special Revenue Fund transferred $130,000 to the State Capital Grants fund for the Coastal Impact Program. • The Borough Capital Projects fund transferred $136,350 to the State Capital Grants fund for the East Elementary School Seismic Upgrade. • The Hospital Facilities Enterprise Fund transferred $235,593 to the Education and Health Debt Service Fund to pay for debt service on hospital related debt. Totals 1 39 (Continued) KODIAK ISLAND BOROUGH Notes to Basic Financial Statements June 30, 2007 (8) Long Term Debt (a) General Obligation Bonds and other debt The Borough issues general obligation bonds and other debt to provide funds for the acquisition and construction of major capital facilities. General obligation bonds are direct obligations and pledge the full faith and credit of the Borough. General obligation bonds and other debt currently outstanding are as follows: Interest Principal payments Type of debt Rates Dates Issue date Maturity dates Dates Amount General obligation , bonds— 1998 Series 3.25 -4.30% 8/15 -2/15 12/22/1998 2/15/2014 2/15/2008 1,150,000 2/15/2009 1,200,000 2/15/2010 1,250,000 ' 2/15/2011 1,305,000 2/15/2012 1,360,000 2/15/2013 1,420,000 2/15/2014 1,480,000 , 9,165,000 General obligation bonds — 2000 E Series 4.75 -5.0% 8/1 -2/1 12/12/2000 2/1/2011 2/1/2008 160,000 2/l/2009 165,000 2/1/2010 175,000 2/1/2011 180,000 680,000 General obligation bonds -2000 F Series 6.9 -9.0% 8/1 -2/1 12/12/2000 2/1/2011 2/1/2008 130,000 2/l/2009 140,000 2/1/2010 2/1/2011 150,000 160,000 , 580,000 i I 40 (Continued) , Retired/ Balance at Issued Refunded June 30, 2007 60,000 9,165,000 150,000 680,000 120,000 580,000 (Continued) KODIAK ISLAND BOROUGH Notes to Basic Financial Statements June 30, 2007 Authorized Prior years Balance at ' Fiscal year Amount Issued Retired June 30, 2006 1999 9,740,000 9,740,000 515,000 9,225,000 2001 1,485,000 1,485,000 655,000 830,000 2001 1,175,000 1,175,000 475,000 700,000 t ' 41 Retired/ Balance at Issued Refunded June 30, 2007 60,000 9,165,000 150,000 680,000 120,000 580,000 (Continued) Type of debt General Obligation bonds - 2004 C Series General obligation bonds - 2004 D Series KODIAK ISLAND BOROUGH Notes to Basic Financial Statements June 30, 2007 I nterest Rates Dates Issue date 4.0 -5.0% l /1 -7/ 1 7/21/2004 3.0 -5.0% 5 /1 -11 /1 12/1/2004 42 t i Principal payments Maturity dates Dates Amount 7/1/2024 7/1/2008 340,000 ' 7/1/2009 350,000 7/1/2010 365,000 7/1/2011 385,000 , 7/1/2012 400,000 7/1/2013 415,000 7/1/2014 435,000 7/1/2015 450,000 7/1/2016 470,000 7/1/2017 485,000 7/l/2018 510,000 ' 7/1/2019 530,000 7/1/2020 555,000 7/l/2021 5 80,000 7/1/2022 605,000 7/1/2023 635,000 7/1/2024 665,000 ' 8,175,000 H/1/2024 l l / 1 /2007 420,000 i ll /1/2008 435,000 11/1/2009 445,000 H/1/2010 460,000 11/1/2011 475,000 , 11/1/2012 490,000 11/1/2013 510,000 11/1/2014 530,000 11/1/2015 550,000 11/1/2016 570,000 11/1/2017 11/1/2018 595,000 620,000 , 11/1/2019 650,000 11/1/2020 675,000 11/1/2021 705,000 11/1/2022 740,000 11/1/2023 775,000 l l / 1 /2024 815,000 10,460,000 ' (Continued) , KODIAK ISLAND BOROUGH Notes to Basic Financial Statements June 30, 2007 Authorized Prior years Balance at Retired/ Balance at Fiscal year Amount Issued Retired June 30, 2006 Issued Refunded June 30, 2007 2004 9,300,000 9,300,000 800,000 8,500,000 — 325,000 8,175,000 2004 11,050,000 11,050,000 180,000 10,870,000 — 410,000 10,460,000 43 (Continued) i Type of debt ADEC loans Clean water — Karluk KODIAK ISLAND BOROUGH Notes to Basic Financial Statements June 30, 2007 Interest Rates Dates 1.5-4.05% 6/1 44 Issue date 4/25/1997 Principal payments 1 1 k Maturity dates Dates Amount 6/1/2020 6/1/2008 5,442 6/1/2009 5,523 6/1/2010 5,606 6/1/2011 5,690 6/1/2012 5,775 6/1/2013 5,862 6/1/2014 5,950 g 6/1/2015 6,039 i 6/1/2016 6,130 6/1/2017 6,222 6/1/2018 6,315 6/1/2019 6,410 6/1/2020 6,506 77,470 1 $ 29,137,470 , 1 r 1 i i I i (Continued) A f KODIAK ISLAND BOROUGH Notes to Basic Financial Statements June 30, 2007 Authorized Prior _years Balance at Retired/ Balance at Fiscal year Amount Issued Retired June 30, 2006 Issued Refunded June 30, 2007 1998 400,000 105,329 22,498 82,831 — 5,361 77,470 $ 33,150,000 32,855,329 2,647,498 30,207,831 — 1,070,361 29,137,470 45 (Continued) KODIAK ISLAND BOROUGH Notes to Basic Financial Statements June 30, 2007 The annual requirements to amortize all general obligation bonded debt and the ADEC loan payable outstanding as of June 30, 2007, are as follows: There were no amounts available in the Debt Service Funds to service the general obligation bonds. There are a number of limitations and restrictions contained in the various bond indentures. The Borough is in compliance with all significant limitations and restrictions. (b) Note Payable As of June 30, 2007, the Borough had the following note payable outstanding in the Enterprise Funds: Note payable to Alaska Department of Environmental Conservation (ADEC), to be paid within 20 years. From June 2, 1999 until April 28, 2005 interest accrued at 2.5 %. From April 29, 2005 to June 30, 2007 interest accrued at 1.5 %. The first loan payment is due one year following substantial completion and initiation of operation of the facility $ 1,636,924 (9) Solid Waste Landfill Closure and Postelosure Care Costs State and federal laws and regulations require that the Kodiak Island Borough place a final cover on its landfill when closed and perform certain maintenance for a number of years after closure. In addition to operating expenses related to current activities of the landfill, an expense provision and related liability are recognized based on the future closure and postclosure care costs that will be incurred based on the date the landfill no longer accepts waste. The recognition of these landfill closure and postclosure care costs is based on the amount of the landfill used during the year. The estimated liability of landfill closure and postclosure care costs is $3,222,587 as of June 30, 2007, which is based on 70% usage (filled) of the landfill. The landfill is estimated to be filled and unusable by the year 2020. Of the total liability at June 30, 2007, a decrease of $36,350 was recorded in the current year based on current year usage and changes in estimates. An estimated additional $1,381,109 will be recognized as closure and postclosure care expenses between the date of the 1 i �J 1 46 (Continued) I General ADEC obligation loan payable Interest Total Year ending June 30: 2008 2,200,000 5,442 1,261,613 2,205,442 2009 2,290,000 5,523 1,167,932 2,295,523 2010 2,385,000 5,606 1,070,204 2,390,606 2011 2,490,000 5,690 968,107 2,495,690 2012 2,235,000 5,775 859,004 2,240,775 2013 -2017 7,805,000 23,981 3,029,941 7,828,981 2018 -2022 6,025,000 25,453 1,728,769 6,050,453 2023 -2025 3,630,000 — 330,753 3,630,000 S 29,060,000 77,470 10,416,323 29,137,470 There were no amounts available in the Debt Service Funds to service the general obligation bonds. There are a number of limitations and restrictions contained in the various bond indentures. The Borough is in compliance with all significant limitations and restrictions. (b) Note Payable As of June 30, 2007, the Borough had the following note payable outstanding in the Enterprise Funds: Note payable to Alaska Department of Environmental Conservation (ADEC), to be paid within 20 years. From June 2, 1999 until April 28, 2005 interest accrued at 2.5 %. From April 29, 2005 to June 30, 2007 interest accrued at 1.5 %. The first loan payment is due one year following substantial completion and initiation of operation of the facility $ 1,636,924 (9) Solid Waste Landfill Closure and Postelosure Care Costs State and federal laws and regulations require that the Kodiak Island Borough place a final cover on its landfill when closed and perform certain maintenance for a number of years after closure. In addition to operating expenses related to current activities of the landfill, an expense provision and related liability are recognized based on the future closure and postclosure care costs that will be incurred based on the date the landfill no longer accepts waste. The recognition of these landfill closure and postclosure care costs is based on the amount of the landfill used during the year. The estimated liability of landfill closure and postclosure care costs is $3,222,587 as of June 30, 2007, which is based on 70% usage (filled) of the landfill. The landfill is estimated to be filled and unusable by the year 2020. Of the total liability at June 30, 2007, a decrease of $36,350 was recorded in the current year based on current year usage and changes in estimates. An estimated additional $1,381,109 will be recognized as closure and postclosure care expenses between the date of the 1 i �J 1 46 (Continued) I 1 r I L II u KODIAK ISLAND BOROUGH Notes to Basic Financial Statements June 30, 2007 balance sheet and the date the landfill is expected to be filled to capacity. The estimated total current cost of the landfill closure and postclosure care of $4,603,696 is based on the amount that would be paid if the landfill were closed as of June 30, 2007. However, the actual cost of closure and postclosure care may be higher due to inflation, changes in technology, or changes in landfill laws and regulations. The Kodiak Island Borough is required by state and federal laws and regulations to make annual contributions to finance closure and postclosure care. The Kodiak Island Borough complies with these requirements by annually recording the liability based on the estimates provided by the Kodiak Island Borough's Engineering/Facilities Director. It is anticipated that future inflation costs and additional costs that might arise from changes in postclosure requirements, due to changes in technology or more rigorous environmental regulations, for example, will be financed primarily by charges to future landfill users and secondarily by taxpayers. 1 47 (Continued) 1 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements June 30, 2007 (a) Changes in Long -Term Liabilities Long -term liability activity for the year ended June 30, 2007, was as follows: Balance June 30, Governmental activities: Bonds payable: General obligation bonds Bond premium ADEC loans Compensated absences Total Business -type activities: Municipal Solid Waste Collection and Disposal: Landfill closure and post - closure costs Notes payable Total r�� IL Balance ' June 30, Due within 2007 one year ' $ 31,155,000 - 2,095,000 29,060,000 2,095,000 109,429 - 6,080 103,349 6,080 , 31,264,429 - 2,101,080 29,163,349 2,101,080 82,831 - 5,361 77,470 5,442 ' 171,869 172,412 171,869 172,412 172,412 $ 31,519,129 172,412 2,278,310 29,413,231 2,278,934 ' Longterm interfund borrowings $ 6,310,000 $ 3,258,937 - 36,350 3,222,587 - 1,582,188 54,736 - 1,636,924 Landfill closure and post- $ 4,841,125 54,736 36,350 4,859,511 - $ 3,258,937 Hospital Facilities: Long term interfund , borrowings $ 1,432,903 - 60,259 1,372,644 62,693 Total Hospital Facilities $ 1,432,903 - 60,259 1,372,644 62,6 , Kodiak Fisheries Research Center: Longterm interfund borrowings $ 6,310,000 - 315,000 5,995,000 335,000 , Business -type activities: Landfill closure and post- closure costs $ 3,258,937 - 36,350 3,222,587 - ' Long tam interfund borrowings 7,742,903 - 375,259 7,367,644 397,693 Notes payable 1,582,188 54,736 - 1,636,924 - ' Total $ 12,584,028 54,736 411,609 12,227,155 397,693 f� For governmental activities, compensated absences are generally liquidated by the General Fund. I 48 (Continued) I 1 1 LJ KODIAK ISLAND BOROUGH Notes to Basic Financial Statements June 30, 2007 (10) Insurance and Risk Retention The Kodiak Island Borough is exposed to numerous risks of loss associated with the operations of a government. These potential losses include, but are not limited to, employee relations and injuries, contracts, theft, loss or damage of property and general liability. The Borough manages its risks from these potential losses by participating in the Alaska Municipal League Joint Insurance Association, as well as purchasing commercial insurance coverage. This insurance has provided the Borough with adequate coverage in the past. There were no significant changes in insurance coverage obtained and there were no claims or settlements that exceeded insurance coverage in any of the past three fiscal years. The Borough is a member in good standing of the Alaska Municipal League Joint Insurance Association (JIA), a governmental insurance pool established by the Alaska Municipal League. Claims are covered on an occurrence basis. JIA provides risk management services, appraisal services and there is also a separate pool for policy liability. The Kodiak Island Borough Finance Director is a member of the Board of Directors of the JIA. The responsibilities of both JIA and the participants are as follows: (a) Responsibilities of JIA JIA shall perform the following instructions in discharging its responsibilities: • Provide insurance coverage as necessary for property, including building and contents, automobile, mobile equipment and data processing equipment, casualty, including general liability, public officials' and employees' liability, auto liability and employee benefit liability; workers' compensation, including employers' liability; commercial blanket bond; and time element. • Assist each participant's assigned risk manager with the implementation of that function. • Provide loss prevention and safety and consulting services to participants as required. • Provide claims adjusting and subrogation services for claims covered by the association's joint ' insurance arrangement. (b) Responsibilities of the Participants The Participants shall have the following responsibilities: • The Borough Assembly or appointing official of each participant shall appoint a representative as provided in Article 5, Section 2 of the bylaws and at least one alternate representative to ' attend member meetings. • Each participant shall appoint an employee of the participant to be responsible for the risk management function within that entity and to serve as a liaison between the participant and JIA with respect to risk management. • Each participant shall maintain an active safety officer and /or committee, and shall comply with all recommendations of JIA concerning the development and implementation of a loss control policy to prevent unsafe practices. ' 49 (Continued) 1 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements June 30, 2007 Each participant shall maintain its own set of records as a loss log, in all categories of loss to insure accuracy of JIA's loss reporting system. (11) Rental Revenues (a) Hospital Facilities Enterprise Fund The Kodiak Island Borough Assembly leases the Kodiak Island Hospital and Care Center premise and equipment to Sisters of Providence d.b.a. Providence Alaska Medical Center who assumed responsibility for the hospital's operations as of April 21, 1997. The lease agreement is effective for a term of twenty years from that date. The lease is cancelable by either party with a one year notice. The hospital capital assets, the lease income, and all other costs relating to the agreement are accounted for by the Borough in the Hospital Facilities Enterprise Fund. The agreement with Providence specifies that the Borough will contribute at least $150,000 per year for the purchase of new and replacement equipment for the hospital. The Borough is also required to fund any major maintenance and repairs projects exceeding $25,000 in cost. The Borough receives $60,000 per month in rental revenue. In August 2003, the lease was amended that required Providence to pay an additional lease payment of $1,300,000 in 2004.1n October 2005 the lease was amended to remove the requirement that Providence had to pay 50% of the net revenues of the hospital, up to $600,000, in rental revenues. Providence now has to spend 50% or more of their net profit, up to $200,000, on equipment. The lease was also amended to have the $150,000 of equipment which the Borough was required to purchase become Providence property rather than Borough property. (b) Kodiak Fisheries Research Center The Kodiak Fisheries Research Center (KFRC) leases its premise to the General Services Administration (GSA), Alaska Department of Fish and Game (ADF &G), the GSA on behalf of Department of Commerce, National Oceanic and Atmospheric Administration (NOAA), and the University of Alaska Fairbanks (UAF). The lease with the GSA is from March 1, 2003, through September 30, 2018, cancelable with 120 days notice. Annual rent varies from $33,333 in 2007 to $41,000 in 2018. The lease with ADF &G is from October 1, 1998 through September 30, 2018, with an option to extend for up to two additional five year periods. Annual rent varies from $33,600 in 2007 to $52,800 in 2011. The annual rent from 2012 through 2018 will be based on $52,800 and adjusted for the tenant's proportionate share of building expenses and utilization of the seawater system. The lease with NOAA is from October 1, 1998 through September 30, 2018, with an option to extend for up to four additional five year periods. Annual rent is $756,000 plus operational and maintenance expenses of $699,076. Operational and maintenance expenses are adjusted every five years to actual costs. The lease with UAF is from October 1, 1998 through September 30, 2018, cancelable with 30 days notice, with an option to extend for up to two additional five year periods. Annual rent varies from $90,000 in 2006 to $143,601 in 2018. 1 1 1 n fl 50 (Continued) I 1 1 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements June 30, 2007 (12) Prior Period Adjustment There was a prior period adjustment recorded in the current year related to loan proceeds for the expansion of the landfill. Loan proceeds were incorrectly recorded as revenues. The net effect of this entry was to decrease accounts receivable and fund equity in the proprietary funds and the Statement of Activities for 2006 by $258,290. (13) Retirement Commitments 51 (Continued) The Alaska Public Employees' Retirement System (PERS) is a defined benefit agent ' multiple- employer public employee retirement system that acts as a common investment and administrative agent for political subdivisions within the State of Alaska. The plans are administered by the Commissioner of Administration and the Alaska Retirement Management Board (ARMB). Benefit and contribution provisions are established by Chapter 35 of Alaska Statute Title 39, and may be amended only by state legislature. Employee participation in the plan is mandatory for ' permanent employees scheduled to work at least 15 hours a week. There is no optional participation for other employees. The plan provides pension and other postemployment healthcare, death and disability benefits. ' During 2005, the Borough adopted Governmental Accounting Standards Board Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. ' During the 2005 legislative session, a law was enacted that closed the defined benefit retirement plan. Senate Bill 141, signed into law on July 27, 2005 and effective July 1, 2006 closed the plan to ' new members and created a new defined contribution plan for members first hired on or after July 1, 2006. As part of this legislation, active nonvested members may have the option to convert their defined benefit plan to the new PERS Defined Contribution Retirement Plan if their employer decides to participate in the conversion option. PERS issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to State of Alaska, Department of Administration, Division of Retirement and Benefits, P.O. Box 110203, Juneau, ' Alaska 99811 -0203, by calling (907) 465 -4460 or online at http://www.state.ak.us/drb/pers/actuarial- valuation.shtml ' At June 30, 2006, the number of participating employers was: State of Alaska 3 ' Municipalities 77 School Districts 53 Other 27 ' Total employers 160 51 (Continued) KODIAK ISLAND BOROUGH ' Notes to Basic Financial Statements June 30, 2007 ' (a) PERS — Defined Benefit Plan Under state law, covered employees are required to contribute 6.75% (7.5% for police and fire personnel) of their annual covered payroll and the Borough is required to contribute an actuarially ' determined rate that, expressed as a percentage of annual covered payroll, sufficient to accumulate assets to pay pension and other postemployment benefits (OPEB) when due. The actuarial determined rate for the Borough was 15% for the year ended June 30, 2007. The contribution requirements of plan members and the Borough are established and may be amended by the ARMB. Benefits vest after five years of credited service. Employees enrolled prior to July 1, 1986 with five or more years of credited service are entitled to annual pension benefits beginning at normal ' retirement age 55 or early retirement age 50. For employees enrolled after June 30, 1986 the normal and early retirement ages are 60 and 55, respectively. Employees with 30 or more years of credited service may retire at any age and receive a normal benefit. , Retirement benefits are calculated by multiplying the average monthly compensation (AMC) times credited PERS service times the percentage multiplier. The AMC is determined by averaging the salaries earned during the five highest (three highest for Police /Fire members or members hired prior ' to July 1, 1996) consecutive payroll years. Members must earn at least 115 days of credit in the last year worked to include it in the AMC calculation. The PERS pays a minimum benefit of $25.00 per month for each year of service when the calculated benefit is less. The percentage multipliers for police /fire personnel are 2% for the first ten years of service and 2.5% for all service over 10 years. The percentage multipliers for all other participants are 2% for the first ten years, 2.25% for the next ten years, and 2.5% for all remaining service earned on or after July 1, ' 1986. All service before that date is calculated at 2 %. The system also provides death and disability benefits and major medical benefits. Major medical , benefits are provided without cost to all members first enrolled before July 1, 1986. Members first enrolled after June 30, 1986 may elect to pay for major medical benefits. , Pennon benefits are adjusted each year based upon increases in the Consumer Price Index (CPI) for the prior year. The increase in the benefits is 75% of the CPI increase up to a 9% maximum for recipients who are at least age 65 or on disability or 50% of the increase up to a 6% maximum for , recipients who are at least age 60 but under 65 or who have been receiving benefits for at least five years. Starting at age 65, or at any age for those employed before July 1, 1986, a retired employee who remains in Alaska is eligible for an additional allowance equal to 10% of the base benefit or $50 a month, whichever is greater. , Annual Cost and Net Obligation ' The Borough's annual costs (expense) are calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is ' projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding 52 (Continued) , ' KODIAK ISLAND BOROUGH ' Notes to Basic Financial Statements June 30, 2007 ' Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. ' Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. 1 53 (Continued) excess) over a period not to exceed twenty years. The following table shows the components of the Borough's annual cost, the amount actually contributed to the plan, and changes in the ' Borough's net obligation to PERS: Pension OPEB Total ' Annual required contribution (ARC) $ 240,517 88,958 329,475 Interest on net pension obligation (NPO) 30,163 16,003 46,166 ' Adjustment to the ARC (58,002) (30,773) (88,775) Annual pension cost (APC) 212,678 74,188 286,866 Contributions made 240,517 88,958 329,475 Decrease in NPO (27,839) (14,770) (42,609) NPO, beginning of year 365,618 193,982 559,600 NPO, end of year $ 337,779 179,212 516,991 ress g Funded Status and Funding Progress ' The funded status of the plan as of June 30, 2006, was as follows: Pension OPEB Total Actuarial accrued liability (AAL) $ 12,732,609 11, 640,541 24 , 373,150 Actuarial value of plan assets 10,390,807 4,447,507 14,838,314 Unfunded actuarial accrued liability (UAAL) $ 2,341,802 7,193,034 9,534,836 Funded ratio (actuarial value of plan assets /AAL) 82% 38% Covered payroll (active plan members) $ 2,230,259 2,230,259 ' UAAL as a percentage of covered payroll 105% 323% ' Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. ' Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. 1 53 (Continued) KODIAK ISLAND BOROUGH Notes to Basic Financial Statements June 30, 2007 Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long -term perspective of the calculations. Significant actuarial methods and assumptions were as follows: Contribution rates: Pension Employee: Peace officers and firefighters 4.50% Other employees 4.05% Employer 10.95% Actuarial assumptions: Actuarial valuation date June 30, 2006 Actuarial cost method Projected unit credit Amortization method Percent of pay, 64% open Remaining amortization period 20 years Asset valuation method 5 -year Inflation rate 3.50% Investment return 8.25% Projected salary increase: Inflation 3.50% Productivity and merit: Peace officers and firefighters 2.50% Others 2.00% Health cost trend N/A 1 1 OPEB I 3.00% 2.70% 4.05% June 30, 2006 Projected unit credit Percent of pay, open 20 years 5 -year 3.50% 8.25% N/A N/A N/A 12.00% The legislature appropriated money from the General Fund to the Department of Administration in 2006 and 2007 to help reduce the liability to PERS brought on by the increased employer cost due to the employer contribution rate increases. The appropriations are intended to help reduce the cost based on the estimates but will not fully eliminate the increased employer costs. The amount allocated to the Kodiak Island Borough for 2007 was $118,047. The Borough's annual pension cost, the percentage of annual pension cost contributed to the plan, and the net pension obligation for 2007 and the two preceding years were as follows: Year ended 6/30/2005 6/30/2006 6/30/2007 APC $ 273,669 424,032 211,278 54 Percentage of APC Net pension contributed obligation 22% 213,916 64% 365,618 100% 336,379 J I 1 t (Continued) 1 1 1 1 1 1 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements June 30, 2007 The Borough's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2007 and the two preceding years were as follows: (a) PERS — Defined Contribution Plan Plan Description and Funding Requirements. Cities and Public Employers in the State of Alaska have a defined contribution retirement plan for new hires first enrolled on or after July 1, 2006. Plan members make mandatory contributions of 8% of gross eligible compensation. State statutes require the employer to contribute 5% of employees' eligible compensation. Additionally, employers are required to contribute 1.75% to the retiree medical plan, 0.3% for occupational and death and disability benefits and 3% of employers average annual employee compensation to the health reimbursement arrangement (HRA). Plan members are 100% vested with their contributions. Members become vested in employers' contributions as follows: 2 years of service — 25% 3 years of service — 50% 4 years of service — 75% 5 years of service — 100% Plan provisions and contribution requirements and amendments are established by the Alaska Retirement Management Board (ARMB). Total contributions for the year ended June 30, 2007 are as follows: Employer Employee 1 Defined contribution $ 2,348 3,757 Retiree medical plan 822 - Occupational health and disability benefits 141 - Health reimbursement agreement (HRA) per employee, per pay period 53 Actual contributions were equal to the annual required contributions. 1 55 (Continued) Annual Percentage of OPEB Annual OPEB Net OPEB Year ended June 30 Cost Cost Contributed Obligation 2005 $ 182,920 22% 142,981 2006 151,726 64% 193,982 2007 74,188 100% 179,212 (a) PERS — Defined Contribution Plan Plan Description and Funding Requirements. Cities and Public Employers in the State of Alaska have a defined contribution retirement plan for new hires first enrolled on or after July 1, 2006. Plan members make mandatory contributions of 8% of gross eligible compensation. State statutes require the employer to contribute 5% of employees' eligible compensation. Additionally, employers are required to contribute 1.75% to the retiree medical plan, 0.3% for occupational and death and disability benefits and 3% of employers average annual employee compensation to the health reimbursement arrangement (HRA). Plan members are 100% vested with their contributions. Members become vested in employers' contributions as follows: 2 years of service — 25% 3 years of service — 50% 4 years of service — 75% 5 years of service — 100% Plan provisions and contribution requirements and amendments are established by the Alaska Retirement Management Board (ARMB). Total contributions for the year ended June 30, 2007 are as follows: Employer Employee 1 Defined contribution $ 2,348 3,757 Retiree medical plan 822 - Occupational health and disability benefits 141 - Health reimbursement agreement (HRA) per employee, per pay period 53 Actual contributions were equal to the annual required contributions. 1 55 (Continued) C KODIAK ISLAND BOROUGH Notes to Basic Financial Statements June 30, 2007 (b) Deferred Compensation Plan The Kodiak Island Borough has two deferred compensation plans created and amended in accordance with Internal Revenue Code Section 457. The plans are available to all regular Borough employees. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. All amounts deferred under these plans are held in trusts that were established for the exclusive benefit of plan participants. Amounts contributed to the plans by participants during the year ended June 30, 2007, was $105,902. The first plan is managed by the International City Managers Association Retirement Corporation. $88,647 was contributed to this plan during the year ended June 30, 2007. The Borough believes that the plan does not meet the criteria for inclusion as a fiduciary fund. The second plan is managed by the Hartford Insurance Company. $17,255 was contributed to this plan during the year ended June 30, 2007. The Borough believes that the plan does not meet the criteria for inclusion as a fiduciary fund. (14) Contingencies (a) General The Borough, in the normal course of its activities, is involved in various claims and pending litigation. After consultation with legal counsel, management estimates that these matters will be resolved without material adverse effect on the Borough's future financial position or results of operations. (b) Grants Amounts received or receivable from grantor agencies are subject to audit and adjustment by the grantor agencies. Any disallowed claims, including amounts already collected, would become a liability of the General or other applicable funds. In management's opinion, disallowances, if any, will not be material. (c) Litigation The Borough is a member of a mandatory class action lawsuit which resulted in a verdict against Exxon Corporation in August 1994 in the amount of $5 billion for punitive damages and was later reduced to $4.5 billion. The matter is now on appeal to the Ninth Circuit Court of Appeals. The share of the settlement, if any, has not been recognized in the financial statements as the settlement is in the appeals process. The ultimate outcome of the matter and the amount to be realized by the Borough upon final settlement is indeterminable at this time. 041 r 1 u n REQUIRED SUPPLEMENTARY INFORMATION KODIAK ISLAND BOROUGH Required Supplementary Information Schedule of Funding Progress for PERS June 30, 2007 Three -year historical trend information presenting the Borough's progress in accumulating sufficient assets to pay pension and OPEB benefits under the PERS when due is presented as follows (dollar amounts in thousands): (AAL) UAL /FE as a Actuarial (UAAL) percentage Actuarial Actuarial accrued Funding of covered valuation value of liability excess Funding Covered payroll date assets (a) (AAL) (b) (FE) (a -b) ratio (a /b) payroll (c) ((a -b) /c) Pension: 6/30/2004 8,543 12,055 (3,512) 71% 1,953 (180)% 6/30/2005 7,428 11,527 (4,099) 64% 2,132 (192)% 6/30/2006 10,391 12,733 (2,342) 82% 2,230 (105)% OPEB: 6/30/2004 6,024 8,501 (2,477) 71% 1,953 (127)% 6/30/2005 7,401 11,485 (4,084) 64% 2,132 (192)% 6/30/2006 4,448 11,641 (7,193) 38% 2,230 (323)% 57 1 KODIAK ISLAND BOROUGH Budgetary Comparison Schedule General Fund Year ended June 30, 2007 (With financial information for the year ended June 30, 2006) Revenues: Property taxes: Real Personal Boat Motor vehicle Penalty and interest Total property taxes Intergovernmental: State sources: Tax Payer Relief Raw fish tax Fish revitalization Electric Co -op tax On behalf PERS payment Total state sources Federal sources: Payments in lieu of taxes Fish and Wildlife revenue sharing Total federal sources Total intergovernmental revenue Severance taxes: Fish Mining Logging Total severance taxes Licenses, permits, fees, and other local revenues: Building and trailer permits Subdivision and zoning fees Sale of copies Miscellaneous Total licenses, permits, fees, and other local revenues Investment income Total revenues n u 58 1 2007 Variance with Final Budget - Budget Positive 2006 Original Final Actual (Negative) Actual $ 7,464,057 7,464,057 7,445,150 (18,907) 7,790,275 1,032,925 974,925 990,141 15,216 1,107,316 26,700 26,700 26,217 (483) 7,546 250,000 250,000 225,046 (24,954) 181,632 150,000 154,000 214,773 60,773 164,978 8,923,682 8,869,682 8,901,327 31,645 9,251,747 1,039,870 1,039,870 1,039,873 3 - 800,000 958,960 958,965 5 802,313 2,000 2,000 66,235 64,235 62,877 26,000 26,000 27,474 1,474 26,680 - - 83,159 83.159 113,667 1,867,870 2,026,830 2,175,706 148,876 1,005,537 750,000 750,000 800,081 50,081 803,246 350,075 350,075 350,112 37 378,770 1,100,075 1,100,075 1,150,193 50,118 1,182,016 2,967,945 3,126,905 3,325,899 198,994 2,187,553 949,960 949,960 1,285,298 335,338 1,108,742 9,555 9,555 11,401 1,846 15.426 57,278 57,278 19,990 (37,288) 62,740 1,016,793 1,016,793 1,316,689 299,896 1,186,908 80,000 80,000 58,630 (21,370) 69,670 7,000 7,000 4,600 (2.400) 6,525 15,000 15,000 15,490 490 13,470 77,700 77,700 82,604 4,904 82.297 179,700 179,700 161,324 (18,376) 171,962 400,000 400,000 399,149 (851) 469,913 13,488,120 13,593,080 14,104,388 511,308 13,268,083 (continued) n u 58 1 ' KODIAK ISLAND BOROUGH Budgetary Comparison Schedule ' General Fund Year ended June 30, 2007 ' (With financial information for the year ended June 30, 2006) See accompanying notes to required supplementary information i i 1 59 2007 Variance with Final Budget - Budget Positive 2006 Original Final Actual (Negative) Actual Expenditures: ' General government: General and administration $ 297,370 297,370 253,610 43,760 421,057 Borough assembly 161,790 161,790 135,986 25,804 139,053 Borough manager 256,253 189,081 194,030 (4,949) 252,118 Borough clerk 361,490 365,490 382,675 (17,185) 354,798 Borough attorney 130,000 130,000 128,087 1,913 74,638 Finance department 647,023 667,023 678,307 (11,284) 602,111 Management information systems 475,838 475,838 346,259 129,579 423,751 ' Assessing department 399,150 399,150 400,617 (1,467) 354,595 Engineering/facilities department 152,102 152,102 112,556 39,546 108,214 Total general government 2,881,016 2,837,844 2,632,127 205,717 2,730,335 ' Community and economic development: Community development department 613,420 613,420 488,529 124,891 497,036 Building official 132,640 132,640 141,556 (8,916) 163,829 Economic development 70,000 70,000 72,816 (2,816) 75,018 Total community and economic development 816,060 816,060 702,901 113,159 735,883 Emergency preparedness 8,800 8,800 7,884 916 6,098 Health and sanitation department 289,880 302,260 289,503 12,757 286,294 ' Education, culture, and recreation 167,220 167,786 158,161 9,625 161,633 Primary and secondary education 8,387,440 8,387,440 8,387,440 - 8,430,840 ' Total expenditures Excess of revenues 12,550,416 11.520,190 12,178,016 342,174 12,351,083 over expenditures 937,704 1,072,890 1,926,372 853,482 917,000 Other financing uses: ' Transfers out - (1,159,172) (1,159,172) - (703,900 Net change in fund balance $ 937,704 (86,282) 767,200 853,482 213,100 Fund balance, at beginning of year 2,026,113 1,813,013 Fund balance, at end of the year $ 2,793,313 2,026,113 See accompanying notes to required supplementary information i i 1 59 KODIAK ISLAND BOROUGH Budgetary Comparison Schedule Special Revenue Fund — Facilities Year ended June 30, 2007 (With financial information for the year ended June 30, 2006) Revenues: Investment income Expenditures: Contingencies Excess of revenues over expenditures Other financing sources (uses): Transfers out Net change in fund balance Fund balance, at beginning of year Fund balance, at end of year See accompanying notes to required supplementary information. 60 2007 Variance wit Final Budget — Budget Positive 2006 Original Final Actual (Negative) Actual $ 1,800,000 1,800,000 2,192,964 392,964 1,477,536 623,500 658,100 — 658,100 — 1,176,500 1,141,900 2,192,964 1,051,064 1,477,536 1,176,500 1,141,900 (1,089,400) (2,231,300) (717,035) $ 2,353,000 2,283,800 1,103,564 (1,180,236) 760.501 38,534,833 37,774,332 $ 39,638,397 38,534,833 See accompanying notes to required supplementary information. 60 1 1 1 KODIAK ISLAND BOROUGH Notes to Required Supplementary Information — Budgetary Comparison Schedules June 30, 2007 The Borough follows these procedures in establishing the budgetary data reflected in the fund financial statements: • The Borough Manager must submit to the Borough Assembly by April 30 a proposed operating budget for the fiscal year commencing the following July 1. The operating budget includes proposed expenditures and the means of financing them. • Public hearings are conducted by the Borough Assembly to obtain citizen comments. • By June 10, the budget is legally enacted through passage of an ordinance by Borough Assembly action. If the Borough Assembly fails to pass an ordinance, the budget submitted by the Borough Manager becomes the adopted budget. • Amendments to the budget can occur anytime during the fiscal year through the Borough Assembly or administrative action. Generally, the following actions are required at the level of the particular change: — All new appropriations are authorized by an appropriation ordinance that amends the annual budget ordinance. — A resolution of the Borough Assembly is required to move (appropriate) amounts between departments and projects. — The administration is authorized and directed by the Borough Assembly to effect the necessary line item changes within the limits established by Items (1) and (2) above by project or department to properly monitor, account, and report receipts and expenditures. • Expenditures may not legally exceed appropriations at the following levels: Capital Projects Funds — project level, all other funds — department level. • All funds, except Capital Projects Funds, are budgeted on an annual basis encompassing a fiscal year. Budgets of Capital Projects Funds generally encompass the period from start -up to project completion, which is generally greater than one year. • Appropriations lapse at year end to the extent that they have not been expended for all funds, except Capital Projects Funds, which lapse at project completion. • Budgets adopted by the Borough Assembly are in accordance with accounting principles generally accepted in the United States of America. • The Borough publishes a separate 2007 budget document. That document may be obtained from the Kodiak Island Borough, Director of Finance, 710 Mill Bay Road, Kodiak, Alaska 99615. 1 61 ADDITIONAL SUPPLEMENTARY INFOR.MA.TION KODIAK ISLAND BOROUGH Budgetary Comparison Schedule Debt Service Fund - Education and Health Year ended June 30, 2007 (With summarized financial information for the year ended June 30, 2006) Revenues: Intergovernmental: State sources Investment income Total revenues Expenditures: General government Debt service: Prinicpal Interest Total expenditures Deficiency of revenues over expenditures Other financing sources (uses): Transfers in Net change in fund balance Fund balance (deficit), at beginning of year Fund balance (deficit), at end of year 62 2007 V ariance v►-th Original Final Budget – and Final Positive 2006 Budget Actual (Negative) Actual $ 1,780,667 1,780,055 (612) 2,146,406 6,000 25,750 19,750 39,517 1,786,667 1,805,805 19,138 2,185,923 5,000 2,650 2,350 1,315 2,099,790 2,100,361 (571) 1,814,553 1,327,020 1,326,806 214 1,583,488 3� _ 3,399 (1,645,143) (1,624,012) (21,131) (1,213,433) 1,645,143 1,645,143 — 1,480,155 $ — 21,131 (21,131) 266,722 (81,511) (348,233) $ (60,380} (81,511) 62 NONMAJOR SPECIAL REVENUE FUNDS The Fire Protection Area No. 1 Fund accounts for the activities related to fire suppression and fire prevention services to the citizens of the service area. The Womens Bay Fire Department Fund accounts for the activities related to fire suppression and fire prevention services to the citizens of the service area. The Kodiak Airport Fire District Fund accounts for the activities related to fire suppression and fire prevention services to the citizens of the service area. The Monashka Bay Road Service Area Fund accounts for the activities related to road services within the service area. The Service District No.1 Fund accounts for the activities related to maintenance service to roads within the district, including snow removal, ditching and grading. The Womens Bay Service Area Fund accounts for the activities related to maintenance service to roads within the service area, including snow and ice removal, ditching and culvert work. The Bay View Road Service Area Fund accounts for the activities related to road services within the service area. The Service Area No. 2 Fund accounts for the activities related to water and sewer services in the service area. This fund is in the design stage at present. The Coastal Management Fund accounts for State of Alaska and Federal grants related to the effects of coastal energy development impacts. Expenditures of these grants are for comprehensive plans, coastal sensitivity analysis, outer continental shelf impact analysis, ordinance update, and planning and zoning. The Childcare Assistance Fund accounts for a State of Alaska grant to finance day care for children of low- income employed families. NONMAJOR SPECIAL REVENUE FUNDS The Local Emergency Planning Committee Fund accounts for State of Alaska grants provided for regional emergency preparation, response, and mitigation planning. The Land Sales Fund accounts for the disposal of Borough -owned lands. The proceeds of land disposals are generally used for the management of Borough lands and the repairs and maintenance of Borough school buildings. The Building and Grounds Fund accounts for the operations and maintenance of certain buildings and grounds owned by the Borough that are jointly shared with the City of Kodiak, the Kodiak Island Borough School District and certain nonprofit community organizations. The Woodland Acres Street Light Service Area Fund accounts for activities related to the provision of street lighting within the service area. The Kodiak Arts Council Fund accounts for activities related to the facilitation of the arts in the Kodiak community. The Tourism Development Fund accounts for the collection of the Borough Transient Accommodation Tax (Bed Tax) and its subsequent transfer to the Kodiak Island Convention and Visitor Bureau. The Trinity Islands Lighting District Fund accounts for activities related to the provision of street lighting within the service area. The Trinity Islands Paving District Fund accounts for activities related to paving the dirt roads within the subdivision. The Mission Lake Tide Gate Fund accounts for activities related to maintaining the tide gate for the residents of the service area. The Fern Fuller Trust Fund accounts for the distribution of funds to the beneficiaries of the trust KODIAK ISLAND BOROUGH Combining Balance Sheets Nonmajor Governmental Funds June 30, 2007 (With summarized financial information at June 30, 2006) 1 I . 1 1 63 Special Debt Capital Totals Assets Revenue Service Project 2007 2 Equity in central treasury $ 2,978,491 161,470 1,249,327 4,389,288 711,760 Temporary investments - - - - 3,281,685 Receivables: State of Alaska 12,650 - 198,729 211,379 440,083 Federal Government 11,093 11,093 6,355 Property taxes 15,008 - - 15,008 28,509 Land sales contracts, due within one year 38,308 38,308 1,538 Notes receivable 448,533 - - 448,533 501,889 Other 25,585 - - 25,585 21,689 Due from other funds - - 756,500 Land sale contracts, due after one year 193,155 _ _ 193,155 228,496 Total $ 3,722,823 161,470 1,448,056 5,332,349 5,978,504 Liabilities and Fund Balances Liabilities: Accounts payable $ 224,945 - 11,410 236,355 236,889 Retainages payable - - 11,904 11,904 22,270 Customer deposits 828 - - 828 678 Due to other funds 238,302 123,913 362,215 808,907 Unearned revenues 213,180 - 46,907 260,087 731,499 Total liabilities Fund Balances: 677,255 - 194,134 871,389 1,800,243 Unreserved: Designated for subsequent ' year expenditures Undesignated 171,800 2,873,768 - 161,470 - 1,253,922 171,800 4,289,160 420,400 3,757,861 Total fund balances 3,045,568 161,470 1,253,922 4,460,960 4,178,261 Totals $ 3,722,823 161,470 1,448,056 5,332,349 5,978,504 1 I . 1 1 63 KODIAK ISLAND BOROUGH Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds Year ended June 30, 2007 (With summarized financial information for year ended June 30, 2006) Revenues: Property taxes and assessments Intergovernmental: State sources Federal sources Land sale proceeds Licenses, permits, fees, and other local revenues Investment income Other Total revenues Expenditures: General government Community and economic development Health and sanitation department Service district maintenance Capital improvements: Schools General Debt service Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Transfers in Transfers out Net other financing sources Net change in fund balances Fund balances, at beginning of year Fund balances, at end of year Special Debt Capital Totals Revenue Service Projects 2007 2006 $ 849,355 - - 849,355 763,731 28,482 - 28,404 56,886 34,916 127,043 - 140,167 267,210 584,910 47,087 - - 47,087 177,164 612,242 - - 612,242 648,324 188,853 3,061 41,470 233,384 127,323 534,970 - 16,351 551,321 125,040 2,388,032 3,061 226,392 2,617,485 2,461,408 1,869,275 - - 1,869,275 1,219,277 83,713 - - 83,713 48,119 83,629 - - 83,629 77,226 498,539 - - 498,539 336,385 - - 183,121 183,121 24,950 - - 373,038 373,038 332,398 9,543 - - 9,543 1,275 2,544,699 - 556,159 3,100,858 2,039,630 (156,667) 3,061 (329,767) (483,373) 421,778 198,188 - 783,522 981,710 271,027 (79,288) - (136,350) (215,638) (82,967) 118,900 - 647,172 766,072 188,060 (37,767) 3,061 317,405 282,699 609,838 3,083,335 158,409 936,517 4,178,261 3,568,423 $ 3,045,568 161,470 1,253,922 4,460,960 4,178,261 f 1 64 1 1 1 Total KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Combining Balance Sheet June 30, 2007 (With summarized financial information at June 30, 2006) Fire and Road Service Areas Assets 191 Equity in central treasury Fire Temporary investments Kodiak Receivables: Protection State of Alaska Airport Fire Federal Government Area No. I Property taxes District Land sales contracts, due within one year $ 523,137 Notes receivable 29,023 Other 137,377 Due from other funds 500 Notes receivable, due after one year - Land sale contracts, due after one year - Total Liabilities and Fund Balances (Deficits) - Liabilities: - Accounts payable 21,838 Employee benefits accrued and withheld 7,465 Customer deposits Due to other funds Unearned revenues Total liabilities Fund balances (deficits): 1 Unreserved (deficits): 29,214 Designated for subsequent year expenditures 187,222 Undesignated 177,513 Total fund balances (deficits) 1 1 Total KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Combining Balance Sheet June 30, 2007 (With summarized financial information at June 30, 2006) Fire and Road Service Areas 6,433 Fire 191 Road Fire Womens Kodiak Monashka Protection Bay Fire Airport Fire Bay Road Service Area No. I Department District Service Area Area No. 1 $ 523,137 197,750 29,023 45,020 321,554 6,433 1,601 191 882 3,045 199,351 45,902 $ 529,570 29,214 324,599 3,196 406 - 7,465 137,377 - 500 - - - - 20,932 - - - 3,196 21,838 - 7,465 137,377 45,000 _ 481,374 177,513 29,214 38,437 187,222 526,374 177,513 29,214 38,437 187,222 $ 529,570 199,351 29,214 45,902 324,599 65 I Fire and Road Service Areas Road Federal and State Grant Pro rams hid Care Womens Bay Bay View Road Service Area Coastal Assistance Service Area Service Area No. 2 Management Program L.E.P.C. Land Sales 151,156 - 4,900 24,968 101 1,045,766 - - - - 11,093 - - 12,650 - - 2,562 294 - - - - - - 18,820 - 19,488 - - - - - - 1,186 - - - - - - 193,155 153,718 294 4,900 36,06] 18,820 12,751 1,259,595 6.774 - - 2,359 154 11,118 3,546 - 1.427 - - 19,926 16,729 - - - - - - - 193,155 6,774 1,427 - 2,359 20,080 27,847 196,701 146,944 (1,133) 4,900 33,702 (1,260) (15,096) 1,062,894 146,944 (1,133) 4,900 33,702 (1,260) (15,096) 1,062,894 153,718 294 4,900 36,061 18,820 12,751 1,259,595 (Continued) I 66 1 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Combining Balance Sheet, (continued) June 30, 2007 67 Street Lighting Districts Woodland Buildings Acres Street Trinity Islands and Light Service Street Light Kodiak Arts Tourism Assets Grounds Area Service Area Council Development Equity in central treasury $ 348,135 9,322 513 — 1,497 Temporary investments — — — _ — Receivables: State of Alaska — Federal Government — _ Property taxes — — — — — Land sales contracts, due within one year — Notes receivable — — — Other — — — 10,021 14,378 Due from other funds — — Notes receivable, due after one year — — — _ — Land sale contracts, due after one year — — — — — Total $ 348,135 9,322 513 10,021 15,875 Liabilities and Fund Balances (Deficits) Liabilities: Accounts payable 48,905 464 162 — — Employee benefits accrued and withheld — — — — — Customer deposits — — 328 Due to other funds — — — 6,437 — Uneamed revenues — — — — Total liabilities 48,905 464 162 6,437 328 Fund balances (deficits): Unreserved (deficits): Designated for subsequent year expenditures 121,400 5,400 — — — Undesignated 177,830 3,458 351 3,584 15,547 Total fund balances (deficits) 299,230 8,858 351 3,584 15,547 Total $ 348,135 9,322 513 10,021 15,875 67 Mission lake Fern Fuller Trinity Islands Totals Tide Gate Trust Paving 2007 2006 7,965 235,026 32,658 2,978,491 857,787 - - - - 2,012,699 - - - 12,650 20,030 - - - 11,093 20,030 - - - 15,008 14,479 - - - 38,308 8,000 - 448,533 - 448,533 53,374 - - - 25,585 25,105 - - - - 93,244 - - - - 487,271 - - - 193,155 34,272 7,965 683,559 32,658 __L626,291 - 3,000 19 224,945 96,631 _ - - - 156 - - - 828 1,203 - - 172,851 238,302 350,543 - 20,025 - 213,180 599,136 - 23,025 172,870 677,255 1,047,669 171,800 143,676 7,965 660,534 (140,212) 2,873,768 2,414,916 7,965 660,534 (140,212) 3,045,568 2,558,592 7,965 683,559 32,658 3,722,823 3,606,261 68 1 1 1 69 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Deficits) Year ended June 30, 2007 (With summarized financial information for the year ended June 30, 2006) Fire and Road Service Areas Fire Road Fire Womens Kodiak Monas6ka Protection Bay Fire Airport Fire Bay Road Area No. 1 Department District Service Ares ' Revenues: Property taxes and assessments $ 362,301 65,598 12,788 39,807 Intergovernmental: State sources 4,344 - - - Federal sources - 24,931 - - Land sale proceeds - Licenses, permits, fees, = _ _ and other local revenues 9,252 Investment income 60,483 10,862 2,093 3,905 Other 3,710 - - - Total revenues 430,838 110,643 14,881 43,712 Expenditures: General government 978,252 85,138 31 1,589 Community and economic development - Health and sanitation department _ Service district maintenance - - 60,522 Debt service - 971 - - Total expenditures 978,252 86,109 31 62,111 Excess (deficiency) of revenues over expenditures (547,414) 24,534 14,850 (18,399) Other financing sources (uses): Transfers 12,788 Transfers out = (12,7 _ Net other financing sources (uses) 12,788 (12,788) Net change in fund balance (547,414) 37,322 2,062 (18,399) ' Fund balances (deficits), at beginning of year 1,073,788 140,191 27,152 56,836 Fund balances (deficits), at end of year $ 526,374 177,513 29,214 38,437 1 1 69 1 I L J I 70 Fire and Road Service Areas Road Federal and State Grant Programs Child Care Service Womens Bay Bay View Road Service Coastal Assistance Area No. 1 Service Area Service Area Area No. 2 Management Program L.E.P.C. Land Sales 213,004 101,057 5,491 - - - - - 165 - - - - - 17,800 - - - - - 25,112 77,000 - - - - - - - - - 47,087 - 20,015 - - - - - 17,159 24,676 13,127 413 569 - 107 - 45,771 - - - - - - - 80 237,845 134,199 5,904 569 25,112 77,107 17,800 110,097 10,120 6,066 48 - - - 17,901 28,716 - - - - 25,488 - - - 83,629 281,230 - 150,465 - 6,322 - - - - - - - = _ - 291,350 156,531 6,370 - 25,488 83,629 17,901 28,716 569 (376) (6,522) (101) 81,381 , (53,505) (22,332) (466) (53,505) (22,332) (466) 569 (376) (6,522) (101) 81,381 240,727 169,276 (667) 4,331 34,078 5,262 (14,995) 981,513 , 187,222 146,944 (1,133) 4,900 33,702 (1,260) (15,096) 1,062,894 (continued) I 70 1 9- KI Ll 71 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Deficits), (continued) Year ended June 30, 2007 (With summarized financial information for the year ended June 30, 2006) Street Lighting Districts Woodland Acres Trinity Islands Buildings and Street Light Street Light Kodiak Arts Grounds Service Area Service Area Council Revenues: 1 Property taxes and assessments $ — — 3,825 — Intergovernmental: State sources 3,444 — — 2,729 Federal sources — — — — Land sale proceeds — Licenses, permits, fees, and other local revenues 425,717 — — 71,232 Investment income 19,289 748 21 — Other — — — — 1 Total revenues 448,450 748 3,846 73,961 Expenditures: General government 658,293 5,561 1,928 66,859 Community and economic development Health and sanitation department — _ _ _ ' Service district maintenance Debt service — — — — Total expenditures 658,293 5,561 1,928 66,859 Excess (deficiency) of revenues over expenditures (209,843) (4,813) 1,918 7,102 Other financing sources (uses): Transfers Tran out 185,400 = _ _ Net other financing sources (uses) 185,400 Net change in fund balance (24,443) (4,813) 1,918 7,102 Fund balances (deficits), at beginning of year 323,673 13,671 (1,567) (3,518) Fund balances (deficits), at end of year $ 299,230 8,858 351 3,584 9- KI Ll 71 1 1 Tourism Mission Lake Fern Fuller Trinity Islands Totals Development Tide Gate Trust Paving 2007 2006 - 3,115 - 42,369 849,355 690,452 , - - - - 28,482 95,528 - - - - 127,043 142,371 - 68,867 - - - - - - 47,087 612,242 22,738 530,379 812 175 5,099 703 188,853 52,826 - - 531,180 - 534,970 75,094 69,679 3,290 536,279 43,072 2,388,032 1,609,388 - 505 8,113 155 1,869,275 1,222,923 58,225 - - - 83,713 65,804 - - - - 83,629 75,425 - - - 498,539 347,934 - - - 8,572 9,543 1,571 58,225 505 8,113 8,727 2,544,699 1,713,657 11,454 2,785 528,166 34,345 (156,667) (104,269) , - - - - 198,188 227,637 - - (66,500) - (79,288) (235,265) - - (66,500) - 118,900 (7,628) 11,454 2,785 461,666 34,345 (37,767) (111,897) 4,093 5,180 198,868 (174,557) 3,083,335 2,670,489 15,547 7,965 660,534 (140,212) 3,045,568 2,558,592 C 72 i KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Fire and Road Service Areas - Fire Protection Area No. I Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2007 (With financial information for the year ended June 30, 2006) 73 2007 Variance with Final Budget Final Positive 2006 Budget Actual (Negative) Actual Revenues: Property taxes $ 346,000 362,301 16,301 345,423 Intergovernmental: State sources - 4,344 4,344 - Licenses, permits, fees, and other local revenues - - - 6,909 Investment income - 60,483 60,483 43,172 Miscellaneous 5,500 3,710 (1,790) - Total revenues 351,500 430,838 79,338 395,504 Expenditures: General government: Personnel 73,340 77,469 (4,129) 67,653 Volunteers 24,000 21,420 2,580 23,295 Fringe benefits 30,020 35,200 (5,180) 24,192 Professional services 13,000 900 12,100 5,123 Support goods and services 140,800 117,353 23,447 99,444 Capital outlay 815,000 725,910 89,090 35,033 Depreciation 40,000 - 40,000 - Total expenditures 1,136,160 978,252 157,908 254,740 Excess (deficiency) of revenues over expenditures (784,660) (547,414) 237,246 140,764 Fund balance, at beginning of year 1,073,788 933,024 Fund balance, at end of year $ 526,374 1,073,788 73 I I J 1 74 1 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Fire and Road Service Areas - Womens Bay Fire Department Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2007 (With financial information for the year ended June 30, 2006) 2007 Variance with Final Budget Final Positive 2006 Budget Actual (Negative) Actual ff Revenues: Property taxes $ 63,000 65,598 2,598 62,475 Intergovernmental: State sources - Federal sources 146,000 24,931 (121,069) 222,457 Licenses, permits, fees, and other local revenues 9,000 9,252 252 9,535 Investment income 500 10,862 10,362 3,609 Total revenues 218,500 110,643 (107,857) 298,076 Expenditures: General government: Personnel services 3,000 919 2,081 1,670 ' Fringe benefits - 341 (341) 498 Professional services - _ Support goods and services 194,400 31,614 162,786 40,142 Capital outlay 27,800 52,264 (24,464) 222,457 Debt service: Interest 10,000 971 9,029 1,275 Total expenditures 235,200 86,109 149,091 266,042 r Excess (deficiency) of revenues over expenditures (16,700) 24,534 41,234 32,034 Other financing sources: Transfers in: Kodiak Airport Fire District Special Revenue Fund 16,700 12,788 (3,912) 16,467 Net in fund balance $ change - 37,322 37,322 48,501 Fund balance, at beginning of year 140,191 91,690 Fund balance, at end of year $ 177,513 140,191 ' i I I J 1 74 1 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Fire and Road Service Areas — Kodiak Airport Fire District Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2007 (With financial information for the year ended June 30, 2006) 75 2007 Variance with Final Budget Final Positive 2006 Budget Actual (Negative) Actual Revenues: Property taxes $ 15,390 12,788 (2,602) 15,205 Investment income 1,000 2,093 1,093 1 Total revenues 16,390 14,881 (1,509) 16,381 Expenditures: General government: Support goods and services 30 31 (1) 27 Excess of revenues over expenditures 16,360 14,850 (1,510) 16,354 Other financing uses: Transfers out: Womens Bay Fire Department Special Revenue Fund (16,700) (12,788) 3,912 (16,467) Net change in fund balance $ (340) 2,062 2,402 (113) Fund balance, at beginning of year 27,152 27,265 Fund balance, at end of year $ 29,214 27,152 75 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Fire and Road Service Areas — Monashka Bay Road Service Area Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2007 (With financial information for the year ended June 30, 2006) 76 2007 Variance with Final Budget Final Positive 2006 Budget Actual (Negative) Actual Revenues: Property taxes $ 40,500 39,807 (693) 28,134 Investment income 2.675 3,905 1,230 2,698 Total revenues 43,175 43,712 537 30,832 Expenditures: General government: Personnel services 825 1,399 (574) 402 Support goods and services 350 190 160 76 Service district maintenance: Snow removal/sanding 15,000 18,524 (3,524) 15,630 Road grading/ditching 7,000 3,753 3,247 921 Repairs and maintenance 20,000 38,245 (18,245) 6,993 Total expenditures 43,175 62,111 (18,936) 24,022 Excess (deficiency) of revenues over expenditures $ — (18,399) (18,399) 6,810 Fund balance, at beginning of year 56,836 50,026 Fund balance, at end of year $ 38,437 56,836 76 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Fire and Road Service Areas - Service Area No. I Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2007 (With financial information for the year ended June 30, 2006) 77 2007 Variance with Final Budget Final Positive 2006 Budget Actual (Negative) Actual Revenues: Property taxes $ 215,000 213,004 (1,996) 162,305 Intergovernmental: State sources - 165 165 - Investment income - 24,676 24,676 13,077 Total revenues 215,000 237,845 22,845 175,382 Expenditures: General government: Personnel services 7,250 8,036 (786) 5,695 Support goods and services 1,400 2,084 (684) 641 Service district maintenance: Snow removal /sanding 95,000 91,316 3,684 51,389 Road grading/ditching 50,000 38,799 11,201 72,569 Repairs and maintenance 61,350 151,115 (89,765) 58,598 Total expenditures 215,000 291,350 (76,350) 188,892 Excess (deficiency) of revenues over expenditures $ - (53,505) (53,505) (13,510) Fund balance, at beginning of year 240,727 254,237 Fund balance, at end of year $ 187,222 240,727 77 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Fire and Road Service Areas - Womens Bay Road Service Area Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2007 (With financial information for the year ended June 30, 2006) 78 2007 Variance with Final Budget Final Positive 2006 Budget Actual (Negative) Actual Revenues: Property taxes $ 96,300 101,057 4,757 96,059 Licenses, permits, fees, and other local revenues 20,000 20,015 15 20,000 Investment income 3,300 13,127 9,827 9,318 Total revenues 119,600 134,199 14,599 125,377 Expenditures: General government: Personnel services 850 1,112 (262) 551 Support goods and services 21,700 4,954 16,746 1,332 Service district maintenance: Snow removal /sanding 57,000 79,152 (22,152) 31,913 Road grading/ditching 33,050 13,689 19,361 86,926 Repairs and maintenance 32,000 57,624 (25,624) 7,085 Total expenditures 144,600 156,531 (11,931) 127,807 Excess (deficiency) of revenues over expenditures $ (25,000) (22,332) 2,668 (2,430) Fund balance, at beginning of year 169,276 171,706 Fund balance, at end of year $ 146,944 169,276 78 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Fire and Road Service Areas — Bay View Road Service Area Schedule of Revenues, Expenditures, and Changes in Fund Deficit Budget and Actual Year ended June 30, 2007 (With financial information for the year ended June 30, 2006) 2007 Revenues: Property taxes Investment income Total revenues Expenditures: General government: Personnel services Support goods and services Service district maintenance: Snow removal/sanding Road grading/ditching Repairs and maintenance Total expenditures Excess (deficiency) of revenues over expenditures Fund deficit, at beginning of year Fund deficit, at end of year — — Variance with 49 — 48 Final Budget 8 Final 2,754 Positive 2006 Budget Actual (Negative) Actual $ 4,600 5,491 891 5,611 200 413 213 45 4,800 5,904 1,104 5,656 — — — 49 — 48 (48) 8 2,500 2,754 (254) 2,620 1,300 1,225 75 978 1,000 2,343 (1,343) 763 4,800 6,370 (1,570) 4,418 $ — (466) (466) 1,238 (667) (1,905) $ (1,133) (667) 79 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Fire and Road Service Areas — Service Area No. 2 Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2007 (With financial information for the year ended June 30, 2006) 2007 Revenues: Investment income Expenditures Excess of revenues over expenditures Fund balance, at beginning of year Fund balance, at end of year Final Budget Variance with Final Budget Positive 2006 Actual (Negative) Actual 569 569 164 569 569 164 4,331 4,167 $ 4,900 4,331 80 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Coastal Management Schedule of Revenues, Expenditures, and Changes in Fund Balance (Deficit) Budget and Actual Year.ended June 30, 2007 (With financial information for the year ended June 30, 2006) 81 2007 Variance with Final Budget Final Positive 2006 Budget Actual (Negative) Actual Revenues: Intergovernmental: Federal sources — grants $ 25,650 25,112 (538) 24,367 Other — 31,829 Total revenues 25,650 25,112 (538) 56,196 Expenditures: Community and economic development: Planning and zoning 25,650 25,488 162 3,119 Excess (deficiency) of revenues over expenditures $ — (376) (376) 53,077 Fund balance (deficit), at beginning of year 34,078 (18,999) Fund balance, at end of year $ 33,702 34,078 81 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Child Care Assistance Program Schedule of Revenues, Expenditures, and Changes in Fund Balance (Deficit) Budget and Actual Year ended June 30, 2007 (With financial information for the year ended June 30, 2006) 82 2007 Variance with Final Budget Final Positive 2006 Budget Actual (Negative) Actual Revenues: Intergovernmental: Federal sources - grants $ 89,280 77,000 (12,280) 74,150 Investment income — 107 107 — 5 (12,173) 9 _ 77,107 Expenditures: Health and sanitation department: Personnel 78,320 71,255 7,065 66,750 Support goods and services 10,960 12,374 (1,414) 10,476 Total expenditures 89,280 83,629 5,651 77,226 Deficiency of revenues over expenditures $ — (6,522) (6,522) (3,076) Fund balance, at beginning of year 5,262 8,338 Fund balance (deficit), at end of year $ (1,260) 5,262 82 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds L.E.P.C. Schedule of Revenues, Expenditures, and Changes in Fund Deficit Budget and Actual Year ended June 30, 2007 (With financial information for the year ended June 30, 2006) Revenues Intergovernmental: State sources — grants Expenditures: General government: Personnel services Professional services Support goods and services Total expenditures Deficiency of revenues over expenditures Fund deficit, at beginning of year Fund deficit, at end of year 83 2007 Variance with Final Budget Final Positive 2006 Budget Actual (Negative) Actual $ 20,000 17,800 (2,200) — 10,000 8,006 1,994 3,887 4,490 5,089 5,327 5,510 4,806 704 — 20,000 17,901 2,099 9,214 $ — (101) (101) (9,214) (14,995) (5,781) $ (15,096) (14,995) 83 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Land Sales Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2007 (With financial information for the year ended June 30, 2006) 84 2007 Variance with Final Budget Final Positive 2006 Budget Actual (Negative) Actual Revenues: Land sale proceeds $ 36,700 47,087 10,387 177,164 Licenses, permits, fees, and other local revenues 1,000 1,000 - 1,000 Gravel sales 40,000 16,159 (23,841) 84,092 Investment income 19,000 45,771 26,771 24,202 Other - 80 80 7,305 Total revenues 96,700 110,097 13,397 293,763 Expenditures: General government: Personnel services 11,494 11,500 (6) 11,500 Contracted services 4,550 1,001 3,549 373 Support goods and services 80,656 16,215 64,441 18,460 Total expenditures 96,700 28,716 67,984 30,333 Excess of revenues over expenditures $ - 81,381 81,381 263,430 Fund balance, at beginning of year 981,513 718,083 Fund balance, at end of year $ 1,062,894 981,513 84 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Buildings and Grounds Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2007 (With fmancial information for the year ended June 30, 2006) 85 2007 Variance with Final Budget Final Positive 2006 Budget Actual (Negative) Actual Revenues: Intergovernmental: State sources $ - 3,444 3,444 - Rental income 421,980 425,717 3,737 418,445 Investment income - 19,289 19,289 10,483 Other - - - 156 Total revenues 421,980 448,450 26,470 429,084 Expenditures: General government: School buildings 333,820 342,575 (8,755) 223,323 Borough building 341,160 302,512 38,648 310,888 Mental health center 11,000 2,500 8,500 31,382 Parks operation and maintenance 21,000 10,706 10,294 6,772 Total expenditures 706,980 658,293 48,687 572,365 Deficiency of revenues under expenditures (285,000) (209,843) 75,157 (143,281) Other financing sources: Transfers in: Facilities Special Revenue Fund 254,600 185,400 (69,200) 140,560 Net change in fund balance $ (30,400) (24,443) 5,957 (2,721) Fund balance, at beginning of year 323,673 326,394 Fund balance, at end of year $ 299,230 323,673 85 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Woodland Acres Street Light Service Area Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2007 (With financial information for the year ended June 30, 2006) 86 2007 Variance with Final Budget Final Positive 2006 Budget Actual (Negative) Actual Revenues: Investment income $ 600 748 148 620 Expenditures: General government - support goods and services 6,000 5,561 439 5,660 Deficiency of revenues over expenditures $ (5,400) (4,813) 587 (5,040) Fund balance, at beginning of year 13,671 18,711 Fund balance, at end of year $ 8,858 13,671 86 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Trinity Islands Street Light Service Area Schedule of Revenues, Expenditures, and Changes in Fund Balance (Deficit) Budget and Actual Year ended June 30, 2007 (With financial information for the year ended June 30, 2006) 87 2007 Variance with Final Budget Final Positive 2006 Budget Actual (Negative) Actual Revenues: Property taxes 3,600 3,825 225 3,892 Income from investments $ — 21 21 — Total revenues 3,600 3,846 246 3,892 Expenditures: General government: Personnel services 655 — 655 — Support goods and services 2,945 1,928 1,017 1,822 Total expenditures 3,600 1.928 1,672 1,822 Excess of revenues over expenditures $ — 1,918 1,918 2,070 Fund deficit, at beginning of year (1,567) (3,637) Fund balance (deficit), at end of year $ 351 (1,567) 87 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Kodiak Arts Council Schedule of Revenues, Expenditures, and Changes in Fund Balance (Deficit) Budget and Actual Year ended June 30, 2007 (With financial information for the year ended June 30, 2006) Revenues: Intergovernmental: State sources Licenses, permits, fees, and other local revenues: Reimbursement from Kodiak Arts Council Total revenues Expenditures: General government: Personnel services Fringe benefits Support goods and services Total expenditures Excess (deficiency) of revenues over expenditures Fund deficit, at beginning of year Fund balance (deficit), at end of year 2007 Variance with Final Budget Final Positive 2006 Budget Actual (Negative) Actual 2,729 2,729 $ 65,780 71,232 5,452 60,423 65,780 73,961 8,181 60,423 47,160 45,412 1,748 45,659 18,620 21,016 (2,396) 15,471 — 431 (431) 423 65,780 66,859 (1,079) 61,553 $ — 7,102 7,102 (1,130) (3,518) (2,388) $ 3,584 (3,518) 88 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Tourism Development Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2007 (With financial information for the year ended June 30, 2006) 89 2007 Variance with Final Budget Final Positive 2006 Budget Actual (Negative) Actual Revenues: Transient accommodations tax $ 45,000 68,867 23,867 47,645 Investment income — 812 812 150 Total revenues 45,000 69,679 24,679 47,795 Expenditures: Community and economic development: Contributions 45,000 45,000 — 45,000 Support goods and services — 13,225 (13,225) — Total expenditures 45,000 58,225 (13,225) 45,000 Excess of revenues over expenditures $ — 11,454 37,904 2,795 Fund balance, at beginning of year 4,093 1,298 Fund balance, at end of year $ 15,547 4,093 89 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Mission Lake Tide Gate Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2007 (With financial information for the year ended June 30, 2007) 2007 Revenues: Property taxes Investment income Total revenues Expenditures: General government: Personnel services Professional services Support goods and services Capital outlay Total expenditures Excess of revenues over expenditures Fund balance, at beginning of year Fund balance, at end of year Final Budget Actual 2,460 3,115 $ — 175 2,460 3,290 1,000 200 1,260 2,460 374 131 505 2,785 5,180 $ 7,965 Variance with Final Budget Positive 2006 (Negative) Actual 655 2,456 626 365 — 1,000 69 12 1,260 — 1,955 1,377 2,785 1,079 4,101 5,180 90 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Fern Fuller Trust Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2007 (With financial information for the year ended June 30, 2006) Revenues: Investment income Fuller Trust proceeds Total revenues Expenditures: General government: Distributions to beneficiaries Support goods and services Total expenditures Excess of revenues over expenditures Other financing uses: Transfers out: Hospital Facilities Enterprise Fund Net change in fund balance Fund balance, at beginning of year Fund balance, at end of year 2007 Variance with Final Budget Final Positive 2006 Budget Actual (Negative) Actual $ — 5,099 5,099 — 75,000 531,180 456,180 75,000 75,000 536,279 461,279 75,000 8,500 8,000 500 — 113 (113) o,wv o,1 1.) 66,500 528,166 (66,500) (66,500) $ — 461,666 198,868 $ 660,534 461,666 461,666 8,500 127 8,627 66,373 (66,500) (127) 198,995 198,868 91 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Trinity Islands Paving Schedule of Revenues, Expenditures, and Changes in Fund Deficit Budget and Actual Year ended June 30, 2007 (With financial information for the year ended June 30, 2006) 2007 Revenues: Special assessments Investment income Total revenues Expenditures: General government: Support goods and services Debt service: Interest Total expenditures Excess of revenues over expenditures Fund deficit, at beginning of year Fund deficit, at end of year 14,230 155 14,075 Variance with (662) 22,140 8,727 13,413 Final Budget $ — 34,345 Final Positive 2006 Budget Actual (Negative) Actual $ 22,140 42,369 20,229 42,171 — 703 703 43 22,140 43,072 20,932 42,214 14,230 155 14,075 7,910 8,572 (662) 22,140 8,727 13,413 $ — 34,345 34,345 ( 174,557) $ (140,212) 38 38 42,176 (216,733) (174,557) 92 1 DEBT SERVICE FUNDS ' Debt Service Funds are used to account for the payment of principal, interest and related fees on all bonded debt except for special assessment bonded debt accounted for in proprietary funds. 0 KODIAK ISLAND BOROUGH Debt Service Fund Other Balance Sheets June 30, 2007 (With financial information at June 30, 2006) Assets Equity in central treasury 2007 2006 $ 161,470 158,409 Liabilities and Fund Balances Total liabilities Fund balance: Unreserved $ 161,470 158,409 Oil KODIAK ISLAND BOROUGH Debt Service Fund Other Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2007 (With financial information at June 30, 2006) 2007 Variance with Final Budget Final Positive 2006 Budget Actual (Negative) Actual Revenues: Investment income Expenditures Excess of revenues over expenditures Fund balances, at beginning of year Fund balances, at end of year 3,061 3,061 158,409 $ 161,470 3,061 3,061 158,409 158,409 94 NONMAJOR CAPITAL PROJECTS FUNDS The Various Borough Projects Fund accounts for general government construction projects not accounted for in other funds. The State Capital Grants Fund accounts for capital impror projects relating to grants received from the State of Alaska. KODIAK ISLAND BOROUGH Nonmajor Capital Project Funds Combining Balance Sheet June 30, 2007 (With summarized financial information at June 30, 2006) Assets Equity in central treasury Temporary investments Receivables: State of Alaska Federal government Due from other funds Total Liabilities and Fund Balances Liabilities: Accounts payable Retainages payable Due to other funds Unearned revenues Total liabilities Fund balances: Unreserved - Undesignated Total Various Borough State Capital Totals Projects Grants 2007 2006 $ 1,059,327 190,000 1,249,327 153,781 — — — 978,549 — 198,729 198,729 319 — — — 6,355 — — — 50,000 $ 1,059,327 388,729 1,448,056 1,507,701 9,968 1,442 11,410 6,914 — 11,904 11,904 22,270 — 123,913 123,913 542,000 — 46,907 46,907 — 9,968 184,166 194,134 571,184 1,049,359 204,563 1,253,922 936,517 $ 1,059,327 388,729 1,448,056 1,507,701 95 KODIAK ISLAND BOROUGH Nonmajor Capital Project Funds Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances Year ended June 30, 2007 (With summarized financial information for the year ended June 30, 2006) 96 Various State Borough Capital Totals Projects Grants 2007 2006 Revenues: Intergovernmental: State sources $ - 28,404 28,404 34,916 Federal sources 67,172 72,995 140;167 263,936 Licenses, permits, fees and other local revenue - - - 275 Investment income 41,470 - 41,470 18,566 Other - 16,351 16,351 10,750 Total revenues 108,642 117,750 226,392 328,443 Expenditures: Capital improvements: Schools 166,899 16,222 183,121 24,950 General 144,193 228,845 373,038 332,398 Total expenditures 311,092 245,067 556,159 357,348 Deficiency of revenues over expenditures (202,450) (127,317) (329,767) (28,905) Other financing sources: Transfers in 457,172 326,350 783,522 114,000 Transfers out (136,350) - (136,350) - Net other financing sources (uses) 320,822 326,350 647,172 114,000 Net change in fund balances 118,372 199,033 317,405 85,095 Fund balances, at beginning of year 930,987 5,530 936,517 851,422 Fund balances, at end of year $ 1,049,359 204,563 1,253,922 936,517 96 KODIAK ISLAND BOROUGH Nonmajor Capital Project Funds Various Borough Projects Schedule of Revenues, Expenditures, and Changes in Fund Balance Year ended June 30, 2007 (With financial information for the year ended June 30, 2006) Revenues: Intergovernmental: Federal sources Licenses, permits, fees and other local revenue Investment income Other 2007 $ 67,172 2006 Total revenues Expenditures: Capital improvements: Schools General Total expenditures Deficiency of revenues over expenditures Other financing sources (uses): Transfers in Transfers out Net other financing sources (uses) Net change in fund balance Fund balance, at beginning of year Fund balance, at end of year — 275 41,470 18,566 — 10,750 108,642 29,591 166,899 — 144,193 54,519 311,092 54,519 (202,450) 457,172 (136,350) 320,822 118,372 930,987 $ 1,049,359 (24,928) (24,928) 955,915 930,987 97 KODIAK ISLAND BOROUGH Nonmajor Capital Project Funds State Capital Grants Schedule of Revenues, Expenditures, and Changes in Fund Balance (Deficit) Year ended June 30, 2007 (With financial information for the year ended June 30, 2006) Revenues: Intergovernmental: State sources Federal sources Other Total revenues Expenditures: Capital improvements: Schools General Total expenditures Deficiency of revenues over expenditures Other financing sources: Transfers in Net change in fund balance Fund balance (deficit), at beginning of year Fund balance, at end of year 2007 2006 $ 28,404 72,995 16,351 117,750 16,222 228,845 245,067 34,916 263,936 298,852 24,950 277,879 302,829 (127,317) (3,977) 326,350 114,000 199,033 110,023 5,530 (104,493) $ 204,563 5,530 L•; M M� r r M M M M i M M M� r M M M M Project KODIAK ISLAND BOROUGH No. Project Status Capital projects - Education: 130 410 -655 East Elementary Doorway Open 00100 430 -696 School Repair KHS Roof Complete 03105 410 -492 Northstar Road/park design Open 03106 410 -493 KHS Emergency Generator Open 03116 430 -509 School Upgrade Complete 03118 430 -512 Chiniak Multi -Use Open 03119 420 -500 HS Swimming Pool Open 04101 420 -515 Old Harbor Gym Renovation Open 04102 420 -516 Larsen Bay School Repair Open 04103 420 -517 Ouzinkie Gum Renovation Open 05002 420.519 Earthquake Evaluation Project Open 05006 430.545 HS Pool Filter Open 05009 420 -515 Repair Spalling Concrete Open 05010 420 -515 KHS Asbestos Floor Removal Open 05011 420 -515 Floor Covering Replacement Open 05012 420 -515 Kodiak High School HVAC Open 05013 420 -515 KHS Exterior Insulation & Windows Open 05014 420 -515 Kodiak HS/MS Cplx Roof Upgrade Open 05015 420 -515 H.S Voc ed/classroom Reclaimation Open 05016 420 -515 East Elementary HVAC Upgrade Open 05017 420 -515 Learning Center Renovation Open 05026 410 -523 KHS Library Seismic Open 07001 - Area Wide School Equipment Open 07004 2,808 Larsen Bay Equipment Open 07005 - Main Elementay Playground Equipment Open 07008 430 -530 Seismic Repair Open 07012 430 -525 Ouzinkie School Seismic Upgrade Open 07014 430 -525 East Elementary Window Seismic Open 07015 410 -531 HS Kitchen Floor Open 07018 319,523 Old High School Pool Repair Open 60,000 - Total capital projects education 49,698 Capital projects - Health: 10,302 07017 237,918 Hospital Solarioum Open 376 8,975 Total capital projects health 228,567 99 KODIAK ISLAND BOROUGH Capital Project Funds ' Supplemental Schedule of Capital Projects Year ended June 30, 2007 Appropriations Total Expenditures Total Unexpended Current Unencumbered Prior 2007 appropriations Prior 2007 expenditures balance encumbrances balance 4,200 - 4,200 - - 4,200 - 4,200 126,770 - 126,770 116,416 12,050 128,466 (1,696) - (1,696) 50,000 - 50,000 27,807 1,160 28,967 21,033 - 21,033 50,000 - 50,000 - - - 50,000 - 50,000 125,804 - 125,804 139,561 660 140,221 (14,417) - (14,417) 20,000 - 20,000 9,946 1,172 11,118 8,882 - 8,882 6,210,000 - 6,210,000 236,874 650,018 886,892 5,323,108 - 5,323,108 2,251,315 - 2,251,315 1,554 1,254 2,808 2,248,507 - 2,248,507 339,883 - 339,883 839 687 1,526 338,357 - 338,357 1,858,255 - 1,858,255 2,518 1,881 4,399 1,853,856 - 1,853,856 500,000 - 500,000 281,121 38,402 319,523 180,477 - 180,477 60,000 - 60,000 49,698 49,698 10,302 - 10,302 237,918 - 237,918 376 8,975 9,351 228,567 - 228,567 304,704 - 304,704 5,565 206,953 212,518 92,186 - 92,186 728,708 - 728,708 6,295 236,188 242,483 486,225 - 486,225 250,000 - 250,000 134 39 173 249,827 - 249,827 596,020 - 596,020 2,680 1,437 4,117 591,903 - 591,903 523,504 - 523,504 2,718 13,009 15,727 507,777 - 507,777 4,840,788 - 4,840,788 8,882 49,414 58,296 4,782,492 - 4,782,492 520,000 - 520,000 425 41,533 41,958 478,042 - 478,042 1,181,336 - 1,181,336 2,836 4,168 7,004 1,174,332 - 1,174,332 465,618 - 465,618 - 5,252 5,252 460,366 - 460,366 - 70,000 70,000 - - - 70,000 - 70,000 - 70,000 70,000 - - - 70,000 - 70,000 - 25,000 25,000 - - - 25,000 - 25,000 - 1,300,000 1,300,000 - - - 1,300,000 - 1,300,000 - 308,344 308,344 - 2,129 2,129 306,215 - 306,215 - 138,606 138,606 - 210 210 138,396 - 138,396 - - - - 6,520 6,520 (6,520) - (6,520) 40,000 40,000 - 40,000 - 40,000 21,244,823 1,951,950 23,196,773 896,245 1,283,111 2,179,356 21,017,417 - 21,017,417 25,000 25,000 - 25,000 - 25,000 25,000 25,000 - 25,000 - 25,000 (continued) 99 KODIAK ISLAND BOROUGH Capital Projects Funds Supplemental Schedule of Capital Projects Year ended June 30, 2007 100 =No r rr r A Encumbrances Project Appropriations Total Expenditures Total Unexpended Current Unencumbered No. Project Status Prior 2007 appropriations Prior 2007 expenditures balance encumbrances balance Capital projects - Other: N/A 410 -400 Undesignated Projects Open $ 68,706 - 68,706 - - - 68,706 - 68,706 85 410 -471 Village Metals Removal Complete 150,000 - 150,000 121,256 - 121,256 28,744 - 28,744 164 430 -645 Waste Management Imp Open 1,741,400 - 1,741,400 936,714 - 936,714 804,686 - 804,686 02107 430 -648 ADF &G Research Study Open 200,000 - 200,000 123,001 13,731 136,732 63,268 - 63,268 03108 410 -495 Borough Building Parking Open 50,000 - 50,000 - - - 50,000 - 50,000 03109 410 -496 Borough Air Handling Open 10,000 - 10,000 - - - 10,000 - 10,000 03110 410 -497 KIB Emergency Generator Open 20,000 - 20,000 2,353 - 2,353 17,647 - 17,647 03114 430 -507 CIAP Grant Open 319,985 - 319,985 192,280 101,414 293,694 26,291 - 26,291 05001 410 -546 Survey Fiber Optic Pass Thru Complete 2,473,694 (25,000) 2,448,694 2,403,507 67,172 2,470,679 (21,985) - (21,985) 05003 430 -542 Kodiak Cadastral Complete 40,000 - 40,000 74,087 - 74,087 (34,087) - (34,087) 05005 430 -544 AK Coastal Management Complete 46,000 - 46,000 47,733 6,000 53,733 (7,733) - (7,733) 06001 410 -465 Computer Upgrade Open 114,000 - 114,000 42,758 59,464 102,222 11,778 - 11,778 06007 ADF & G Building Design Open - 1,500,000 1,500,000 - - - 1,500,000 - 1,500,000 07010 ADF & G Near Island Facility Open - 500,000 500,000 - - - 500,000 - 500,000 03120 410 -624 Womens Bay Community Plan Open 33,380 - 33,380 22,392 - 22,392 10,988 - 10,988 Total - capital projects other 5,267,165 1,975,000 7,242,165 3,966,081 247,781 4,213,862 3,028,303 - 3,028,303 Capital projects - Public Safety 173 410 -683 Bayside Classroom Add Complete 75,000 (26,800) 48,200 48,199 - 48,199 1 - 1 174 410 -684 Bayside Storage /Bay Add Open 400,000 26,800 426,800 3,020 202 3,222 423,578 - 423,578 00102 410 -698 Bayside Underground Electrical Open 22,000 - 22,000 - - - 22,000 - 22,000 04106 430 -518 SHSGP Grant Complete 138,151 - 138,151 122,784 - 122,784 15,367 - 15,367 05019 430 -548 Homeland Security Open 17,733 - 17,733 - 14,430 14,430 3,303 - 3,303 05020 430.140 Predisaster Mitigation Grant Open 41,724 - 41,724 17,239 2,875 20,114 21,610 - 21,610 07009 430 -530 Tsunami Siren, Upgrades & Additions Open - 100,000 100,000 - - - 100,000 - 100,000 Total - capital projects public safety 694,608 100,000 794,608 191,242 17,507 208,749 585,859 - 585,859 Capital projects - Recreation 146 410 -663 BMX Bike Trail Open 68,920 25,750 94,670 49,278 - 49,278 45,392 - 45,392 06008 430 -526 Summit Lake Trail Open 23,500 - 23,500 - 17,210 17,210 6,290 - 6,290 07003 430 -530 Island Lake Trail Open - 48,000 48,000 - - - 48,000 - 48,000 07006 Port Lions Community Workshop Open - 10,000 10,000 - - - 10,000 - 10,000 Total - capital projects recreation 92,420 83,750 176,170 49,278 17,210 66,488 109,682 - 109,682 Transportation 177 430 -687 Anton Larsen Boat Ramp Open 620,000 276,350 896,350 596,986 28,399 625,385 270,965 - 270,965 07011 Ouzinkie Dock Replacement Open - 570,000 570,000 - - - 570,000 - 570,000 07016 R and R Panamaroff Creek Culverts Open - 30,000 30,000 - - - 30,000 - 30,000 Total - capital projects transportation 620,000 876,350 1,496,350 596,986 28,399 625,385 870,965 - 870,965 Total all capital projects $ 27,944,016 4,987,050 32,93 5,69 1,594,008 7,293,84 25,637,22 - 25 NOTE: This schedule inclues expenditures from major capital project funds, nonmajor capital project funds and matching costs recorded in the General Fund. 100 =No r rr r A ENTERPRISE FUNDS The Municipal Solid Waste Collection and Disposal Fund accounts for the collection and disposal of solid waste and recycling services for the Kodiak Island Borough. The Hospital Facilities Fund accounts for rents on the Borough -owned hospital; hospital related state revenue sharing; and other hospital related revenue. In turn, it purchases hospital equipment and makes debt service payments on hospital related debt. The Kodiak Fisheries Research Center Fund accounts for rents and expenses on the Borough -owned Kodiak Fisheries Research Center. The three tenants: NOAA, Alaska Department of Fish & Game and University of Alaska, Fairbanks pay lease funds to participate in this multi- agency research facility committed to the preservation of the North Pacific marine ecosystem and resources. The 911 Service Fund accounts for funds collected from phone charges and pays for a 911 emergency system. � u ri 1 101 KODIAK ISLAND BOROUGH Enterprise Funds Municipal Solid Waste Collection and Disposal Schedule of Revenues, Expenses, and Changes in Fund Equity Budget and Actual Year ended June 30, 2007 (With financial information for the year ended June 30, 2006) j 2007 Variance with Final Budget Final Positive 2006 Budget Actual (Negative) Actual Operating revenues: Solid waste collection $ 2,761,345 2,748,563 (12,782) 2,720,454 Solid waste disposal 998,178 1,184,422 186,244 944,835 Other - 3,566 3,566 409,595 Total operating revenues 3,759,523 3,936,551 177,028 4,074,884 Operating expenses: Personnel services 662,290 672,140 (9,850) 711,039 Refuse collection 1,432,000 1,123,231 308,769 1,352,618 Refuse disposal 306,000 265,315 40,685 306,150 Professional services 202,800 176,045 26,755 261,073 Maintenance and repairs 39,000 29,535 9,465 44,700 Landfill closure and postclosure costs 270,000 (36,350) 306,350 245,006 Depreciation 348,326 271,947 76,379 245,510 ' General and administration 399,107 198,236 200,871 185,099 Recycling services 90,000 168,963 (78,963) 90,000 Contributions 10,000 11,783 (1,783) 5,258 Total operating expense 3,759,523 2,880,845 878,678 3,446,453 Operating income 1,055,706 1,055,706 628,431 Other income (expense): State aid 24,205 24,205 Investment income = 122,405 122,405 69,421 Interest expense Income before transfers - 1,202,316 1,202,316 697,852 Other financing sources: Transfers in - 6,450 6,450 6,450 Net change in fund equity $ - 1,208,766 1,208,766 704,302 Fund equity, at beginning of year, as originally stated 3,606,807 3,160,795 Prior period adjustment - (258,290) ' Fund equity, at beginning of year, as restated 3,606,807 2,902,505 Fund equity, end of year $ 4,815,573 3.606,807 ri 1 101 KODIAK ISLAND BOROUGH Enterprise Funds Hospital Facilities Schedule of Revenues, Expenses, and Changes in Fund Equity Budget and Actual Year ended June 30, 2007 (With financial information for the year ended June 30, 2006) Operating revenues: Lease income Operating expenses: Personnel services Maintenance and repairs Depreciation General and administration Total operating expenses Operating income (loss) Other income (expense): Loss on disposal of capital assets Contribution to Providence Hospital Investment income Interest expense Loss before transfers Other financing sources (uses): Transfers in Transfers out Net other financing sources (uses) Net change in fund equity Fund equity, at beginning of year Fund equity, at end of year 2007 Variance with Final Budget Final Positive 2006 Budget Actual (Negative) Actual $ 720,000 1,081,110 361,110 1,153,333 5,000 5,000 — 5,000 12,000 12,425 (425) 2,667 1,276,560 1,073,275 203,285 1,077,047 — — — 10,810 1,293,560 1,090,700 202,860 1,095,524 (573,560) (9,590) 563,970 57,809 — — — (17,700) (150,000) (150,000) — (150,000) — 7,045 7,045 — (56,720) (56,719) 1 (59,059) (780,280) (209,264) 571,016 (168,950) 66,500 66,500 — 66,500 (235,593) (235,593) — (320,230) (169,093) (169,093) — (253,730) $ (949,373) (378,357) 571,016 (422,680) 17,868,496 18,291,176 $ 17,490,139 17,868,496 102 KODIAK ISLAND BOROUGH Enterprise Funds Kodiak Fisheries Research Center Schedule of Revenues, Expenses, and Changes in Fund Equity Budget and Actual Year ended June 30, 2007 (With financial information for the year ended June 30, 2006) 2007 Operating revenues: Lease income Operating expenses: Personnel services Depreciation General and administration: Cleaning and janitorial Heating Electrical Plumbing Air conditioning Elevators Miscellaneous Total operating expenses Operating income (loss) Other income (expense): Investment income Interest expense Net change in fund equity Fund equity, at beginning of year Fund equity, at end of year Variance with Final Budget Final Positive Budget Actual (Negative) $ 1,366,800 1,579,600 2006 Actual 212,800 1,572,474 200,770 227,139 (26,369) 235,147 744,294 742,613 1,681 745,037 47,000 38,942 8,058 35,338 142,500 173,430 (30,930) 138,951 185,500 183,432 2,068 176,484 195,700 21,377 174,323 12,936 2,000 1,133 867 173 2,000 2,228 (228) 2,042 106,830 72,043 34,787 63,992 1,626,594 1,462,337 164,257 1,410,100 (259,794) 117,263 377,057 162,374 60,000 143,336 83,336 92,471 (425,165) (425,163) 2 (446,775) $ (624,959) (164,564) 460,395 (191,930) 10,938,290 11,130,220 $ 10,773,726 10,938,290 103 KODIAK ISLAND BOROUGH Enterprise Funds 911 Services Fund Schedule of Revenues, Expenses, and Changes in Fund Equity Budget and Actual Year ended June 30, 2007 (With financial information for the year ended June 30, 2006) 104 2007 Variance with Final Budget Final Positive 2006 Budget Actual (Negative) Actual Operating revenues: Customer charges $ 69,000 62,698 (6,302) 65,614 Operating expenses: Personnel services 10,500 3,000 7,500 3,000 Miscellaneous — 178 (178) 194 Telephone services 58,500 60,962 (2,462) 54,000 Total operating expenses 69,000 64,140 4,860 57,194 Operating income (loss) — (1,442) (1,442) 8,420 Other income: Investment income — 1,340 1,340 Net change in fund equity $ — (102) (102) 8,420 Fund equity, at beginning of year 41,064 32,644 Fund equity, at end of year $ 40,962 41,064 104 SUPPLEMENTARY SCHEDULES KODIAK ISLAND BOROUGH SUMMARY OF BONDED DEBT SERVICE REQUIREMENTS TO MATURITY June 30, 2007 Annual principal and interest requirements on General Obligation Refunding and Construction Bonds Year Principal Interest Total 2008 1,860,000 1,075, 917 2,935,917 2009 2,280,000 1,167,553 3,447,553 2010 2,370,000 1,069,970 3,439,970 2011 2,470,000 966,901 3,436,901 2012 2,220,000 858,046 3,078,046 2013 2,310,000 765,997 3,075,997 2014 2,405,000 669,362 3,074,362 2015 965,000 567,922 1,532,922 2016 1,000, 000 528,622 1,528,622 2017 1,040,000 487,587 1,527,587 2018 1,080,000 444,345 1,524,345 2019 1,130,000 397,223 1,527,223 2020 1,180,000 346,023 1,526,023 2021 1,230,000 292,064 1,522,064 2022 1,285,000 235,477 1,520,477 2023 1,345,000 174,073 1,519,073 2024 1,410,000 107,126 1,517,126 2025 1,480,000 36,335 1,516,335 $ 29,060,000 $ 10,190,543 $ 39,250,543 105 KODIAK ISLAND BOROUGH GENERAL OBLIGATION REFUNDING BONDS, 1998 SERIES A RETIREMENT SCHEDULE June 30, 2007 1998 Bond Issue This issue, dated December 7, 1998, was issued under a book entry system registered in the name of Cede & Company, as Nominee of The Depository Trust Company, New York, New York, the securities depository for the 1998 Bonds. The financial advisor for this issue was Kaplan Financial Consulting, Inc. Legal opinion was rendered by bond council, Birch, Horton, Bittner, and Cherot. The paying agent for this issue is Alaska USA Trust Company. These bonds were issued to refund all but $1,030,000 of the 1994 bond issue, resulting in a total interest savings of $504,859. 106 Interest Principal Intereest Fiscal Interest due due due year rate August 15 February 15 February 15 Total 2008 4.30% 197,048 1,150,000 197,047 1,544,095 2009 4.30% 172,323 1,200,000 172,322 1,544,645 2010 4.30% 146,523 1,250,000 146,522 1,543,045 2011 4.30% 119,648 1,305,000 119,647 1,544,295 2012 4.30% 91,590 1,360,000 91,590 1,543,180 2013 4.30% 62,350 1,420,000 62,350 1,544,700 2014 4.30% 31,820 1,480,000 31,820 1,543,640 $ 821,302 $ 9,165,000 $ 821,298 $ 10,807,600 106 KODIAK ISLAND BOROUGH GENERAL OBLIGATION BOND, 2000 SERIES E RETIREMENT SCHEDULE June 30, 2007 2000E BOND ISSUE This issue, dated December 12, 2000, was issued under a book entry system registered in the name of Cede & Company, as Nominee of the Depository Trust Company, New York, New York, the securities depository for the 2000 Series E Bond. This issue was marketed by the Alaska Municipal Bond Bank. Legal opinion was rendered by bond council, Wohlforth, Vassar, Johnson & Brecht of Anchorage, Alaska. This bond was issued to repair the high school roof. Ilyl Interest Principal Interest Fiscal Interest due due due year rate August 01 February 01 February 01 Total 2008 5.00% 17,000 160,000 17,000 194,000 2009 5.00% 13,000 165,000 13,000 191,000 2010 5.00% 8,875 175,000 8,875 192,750 2011 5.00% 4,500 180,000 4,500 189,000 $ 43,375 $ 680,000 $ 43,375 $ 766,750 Ilyl KODIAK ISLAND BOROUGH GENERAL OBLIGATION BOND, 2000 SERIES F RETIREMENT SCHEDULE June 30, 2007 2000F BOND ISSUE This issue, dated December 12, 2000, was issued under a book entry system registered in the name of Cede & Company, as Nominee of the Depository Trust Company, New York, New York, the securities depository for the 2000 Series F Bond. This issue was marketed by the Alaska Municipal Bond Bank. Legal opinion was rendered by bond council, Wohlforth, Vassar, Johnson & Brecht of Anchorage, Alaska. This bond was issued to upgrade Peterson Elementary. 108 Interest Principal Interest Fiscal Interest due due due year rate August 01 February 01 February 01 Total 2008 7.00% 20,530 130,000 20,530 171,060 2009 7.05% 15,980 140,000 15,980 171,960 2010 7.10% 11,045 150,000 11,045 172,090 2011 7.15% 5,720 160,000 5,720 171,440 $ 53,275 $ 580,000 $ 53,275 $ 686,550 108 KODIAK ISLAND BOROUGH ' GENERAL OBLIGATION BOND, 2004 SERIES C RETIREMENT SCHEDULE ' June 30, 2007 2004C BOND ISSUE This issue, dated July 7, 2004 was issued under a book entry system registered in the name of Cede & Company, as Nominee of the Depository Trust Company, New York, New York, the securities depository for the 2004 Series C Bond. This issue was marketed by the Alaska Municipal Bond Bank. Legal opinion was rendered by bond council, Wohlforth, Vassar, Johnson & Brecht of Anchorage, Alaska. This bond was issued to fund planning, design, and construction of capital improvements to the Larsen Bay School, Kodiak Middle School and Kodiak High School. The proceeds will also be used to develop an earthquake evaluation plan. 1 109 Interest due Principal due Interst due ' Fiscal year Interest rate July 01 July 01 January 01 Total 2008 4.250% - - 178,236 178,236 2009 2010 4.250% 4.250% 178,236 171,011 340,000 171,011 689,247 350,000 163,573 684,584 2011 4.250% 163,573 365,000 155,817 684,390 ' 2012 4.250% 155,817 385,000 147,636 688,453 2013 4.000% 147,636 400,000 139,136 686,772 2014 4.000% 139,136 415,000 130,836 684,972 ' 2015 4.000% 130,836 435,000 122,136 687,972 2016 4.100% 122,136 450,000 113,136 685,272 2017 4.250% 113,136 470,000 103,501 686,637 2018 4.300% 103,501 485,000 93,194 681,695 ' 2019 4.400% 93,194 510,000 82,229 685,423 2020 4.500% 82,229 530,000 70,569 682,798 2021 4.500% 70,569 555,000 58,082 683,651 2022 4.625% 58,082 580,000 45,032 683,114 2023 4.750% 45,032 605,000 31,041 681,073 ' 2024 4.800% 31,041 635,000 15,960 682,001 2025 4.800% 15,960 665,000 680,960 ' $ 1,821,125 $ 8,175,000 $ 1,821,125 $ 11,817,250 1 109 1 KODIAK ISLAND BOROUGH GENERAL OBLIGATION BOND, 2004 SERIES D RETIREMENT SCHEDULE June 30, 2007 2004D BOND ISSUE This issue, dated December 1, 2004, was issued under a book entry system registered in the name of Cede & Company, as Nominee of the Depository Trust Company, New York, New York, the securities depository for the 2004 Series D Bond. This issue was marketed by the Alaska Municipal Bond Bank. Legal opinion was rendered by bond council, Wohlforth, Vassar, Johnson & Brecht of Anchorage, Alaska. This bond was issued to fund the acquisition and construction of school capital improvements in the Borough, including a new school pool and the Kodiak High School Voc Ed/Classroom reclamation. 110 u 1 1 I � J 1 Interest due Principal due Interst due May Fiscal year Interest rate November 01 November 01 01 Total 2008 3.00% 217,413 420,000 211,113 848,526 2009 3.00% 211,113 435,000 204,588 850,701 2010 3.00% 204,588 445,000 197,913 847,501 2011 3.50% 197,913 460,000 189,863 847,776 2012 3.50% 189,863 475,000 181,550 846,413 2013 3.50% 181,550 490,000 172,975 844,525 2014 4.00% 172,975 510,000 162,775 845,750 2015 4.00% 162,775 530,000 152,175 844,950 2016 4.00% 152,175 550,000 141,175 843,350 2017 4.00% 141,175 570,000 129,775 840,950 2018 4.00% 129,775 595,000 117,875 842,650 2019 4.50% 117,875 620,000 103,925 841,800 2020 4.50% 103,925 650,000 89,300 843,225 2021 4.50% 89,300 675,000 74,113 838,413 2022 4.50% 74,113 705,000 58,250 837,363 2023 5.00% 58,250 740,000 39,750 838,000 2024 5.00% 39,750 775,000 20,375 835,125 2025 5.00% 20,375 815,000 - 835,375 $ 2,464,903 $ 10,460,000 $ 2,247,490 $ 15,172,393 110 u 1 1 I � J 1 1 1 STATISTICAL SECTION Statistical Tables provide report users with a better historical perspective in assessing current financial status and trends of the Borough. 11 KODIAK ISLAND BOROUGH Kodiak, Alaska Net Assets by Component Last Three Fiscal Years (accrual basis of accounting) Governmental activities: Invested in capital assets, net of related debt Unrestricted Total govermnmental activities net assets Business -type activities Invested in capital assets, net of related debt Unrestricted Total business -type activities net assets Primary government Invested in capital assets, net of related debt Unrestricted Total primary government net assets Source: Borough general ledger Fiscal Year 2005 2006 2007 $ 61,154,204 $ 62,716,326 $ 73,425,394 45,052,197 45,653,357 37,640,716 $ 106,206,401 $ 108,369,683 $ 111,066,110 $ 39,878,785 $ 38,588,510 $ 38,623,762 (7,263,950) (6,133,853) (5,503,362) $ 32,614,835 $ 32,454,657 $ 33,120,400 $ 101,032,989 $ 101,304,836 $ 112,049,156 37,788,247 39,519,504 32,137,354 $ 138,821,236 $ 140,824,340 $ 144,186,510 The Kodiak Island Borough implemented GASB 34 in Fiscal Year 2005. That is why there is only 3 years of data. at KODIAK ISLAND BOROUGH Kodiak, Alaska Changes in Net Assets ' Last Three Fiscal Years (accrual basis of accounting) Expenses Governmental activities: General government Emergency preparedness Community and economic development Health and sanitation Education, culture, and recreation Service district maintenance Education, culture, and recreation Interest on long -term debt Total governmental activities expenses Business -type activities: Municipal solid waste collection and disposal Hospital facilities Kodiak fisheries research center 911 services Total business -type activities expenses Total primary government expenses Program Revenues Governmental activities: Charges for services: General government Community and economic development Education, culture, and recreation Service district maintenance Primary and secondary education Operating grants and contributions Capital grants Total governmental activities program revenues Business -type activities: Charges for services: Municipal solid waste collection and disposal Hospital facilities 911 services Kodiak fisheries research center Total business -type activities program revenues Total primary government program revenues 7 112 1 Fiscal Year 2005 2006 2007 ' $ 7,133,461 $ 3,984,390 $ 4,755,754 25,850 8,598 10,384 509,680 784,002 786,614, 387,619 403,866 414,144 185,993 164,053 161,247 347,934 336,385 362,189 10,207,757 10,831,588 10,788,188 1,101,598 1,700,089 1,290,216 19,899,892 18,212,971 18,568,736 ' 3,362,348 3,446,453 2,888,821 1,344, 987 1,304,583 1,297,419 1,878,788 1,856,875 1,889,750 69,178 57,194 64,140 6,655,301 6,665,105 6,140,130 $ 26,555,193 $ 24,878,076 $ 24,708,866 $ 367,530 $ 311,802 $ 1,058,330 , 21,886 - 68,867 56,704 108,218 - 20,000 20,000 20,015 - 95,025 - 721,453 1,240,547 1,935,687 2,917,160 298,852 184,922 4,104,733 2,074,444 3,267,821 3,141,856 3,665,289 3,932,985 1,153,333 1,153,333 1,081,110 26,721 65,614 62,698 1,566,686 5,888,596 1,572,474 6,456,710 1,581,850 6,658,643 , $ 9,993,329 $ 8,531,154 $ 9,926 7 112 1 KODIAK ISLAND BOROUGH Kodiak, Alaska Changes in Net Assets Last Three Fiscal Years (accrual basis of accounting) 112 Fiscal Year 2005 2006 2007 Expenses Governmental activities: General government $ 7,133,461 $ 3,984,390 $ 4,755,754 Emergency preparedness 25,850 8,598 10,384 Community and economic development 509,680 784,002 786,614 Health and sanitation 387,619 403,866 414,144 Education, culture, and recreation 185,993 164,053 161,247 Service district maintenance 347,934 336,385 362,189 Education, culture, and recreation 10,207,757 10,831,588 10,788,188 Interest on long -term debt 1,101,598 1,700,089 1,290,216 Total governmental activities expenses 19,899,892 18,212,971 18,568,736 Business -type activities: Municipal solid waste collection and disposal 3,362,348 3,446,453 2,888,821 Hospital facilities 1,344,987 1 1,297,419 Kodiak fisheries research center 1,878,788 1,856,875 1,889,750 911 services 69,178 57,194 64,140 Total business -type activities expenses 6,655,301 6,665,105 6,140,130 Total primary government expenses $ 26,555,193 $ 24,878,076 $ 24,708,866 Program Revenues Governmental activities: Charges for services: General government $ 367,530 $ 311,802 $ 1,058,330 Community and economic development 21,886 - 68,867 Education, culture, and recreation 56,704 108,218 - Service district maintenance 20,000 20,000 20,015 Primary and secondary education - 95,025 - Operating grants and contributions 721,453 1,240,547 1,935,687 Capital grants 2,917,160 298,852 184,922 Total governmental activities program revenues 4,104,733 2,074,444 3,267,821 Business -type activities: Charges for services: Municipal solid waste collection and disposal 3,141,856 3,665,289 3,932,985 Hospital facilities 1,153,333 1,153,333 1,081,110 911 services 26,721 65,614 62,698 Kodiak fisheries research center 1,566,686 1,572,474 1,581,850 Total business -type activities program revenues 5,888,596 6,456,710 6,658,643 Total primary government program revenues $ 9,993,329 $ 8,531,154 $ 9,926,464 112 KODIAK ISLAND BOROUGH Kodiak, Alaska Changes in Net Assets Last Three Fiscal Years (accrual basis of accounting) 1 1 1 1� I t 113 1 Fiscal Year 2005 2006 2007 ' Net(expense) /revenue Governmental activities $ (15,795,159) $ (16,138,527) $ (15,300,915) Business -type activities (766,705) (208,395) 518,513 Total primary government net expense $ (16,561,864) $ (16,346,922) $ (14,782,402) , General Revenues and Other Changes in Net Assets Governmental activities: Taxes Property taxes $ 9,063,729 $ 9,807,551 $ 9,754,916 Severance taxes 1,005,539 1,186,908 1,316,689 Unrestricted grants and contributions 2,384,538 3,482,351 3,242,740 Investment earnings 1,750,321 2,798,391 3,745,990 Miscellaneous 55,692 779,328 (225,636) Transfers 170,602 247,280 162,643 Total governmental activities $ 14,430,421 $ 18,301,809 $ 17,997,342 ' Business -type activities: Investment earnings 70,812 161,892 274,126 Miscellaneous Transfers (170,602) 391,895 (247,280) 35,747 (162,643) Total business -type activities (99,790) 306,507 147,230 Total primary government $ 14,330,631 $ 18,608,316 $ 18,144,572 Change in Net Assets Governmental activities $ (1,364,738) $ 2,163,282 $ 2,696,427 Business -type activities (866,495) 98,112 665,743 Total primary government $ (2,231,233) $ 2,261,394 $ 3,362,170 The Kodiak Island Borough implemented GASB 34 in Fiscal Year 2005. That is why there is only 3 years of data. 1� I t 113 1 KODIAK ISLAND BOROUGH Kodiak, Alaska Fund Balances of Governmental Funds Last Three Fiscal Years (modified accrual basis of accounting) General fund Reserved Unreserved Total general fund All other governmental funds Reserved Unreserved, reported in: Special revenue funds Debt service funds Capital projects funds Total all other governmental funds Fis cal Year 2005 2006 2007 $ - $ - $ 554,975 1,813,013 2,026,113 2,238,338 $, 1,813,013 $ 2,026,113 $ 2,793,313 $ 8,090,822 $ 7,742,903 $ 7,367,644 34,055,115 36,837,895 35,316,321 (189,824) 76,898 101,090 21,412,256 20,810,819 21,711,585 $ 63,368,369 $ 65,468,515 $ 64,496,640 The Kodiak Island Borough implemented GASB 34 in Fiscal Year 2005. That is why there is only 3 years of data. 114 I� 115 1 KODIAK ISLAND BOROUGH Kodiak, Alaska e Changes in Fund Balances of Governmental Funds , Last Four Fiscal Years (modified accrual basis of accounting) Fiscal Year 2004 2005 2006 2007 Revenues Taxes $ 8,016,323 $ 9,063,729 $ 9,833,846 $ 9,750,682 Intergovernmental ' State sources 2,121,420 2,169,803 3,368,491 4,012,647 Federal sources 1,245,337 3,853,348 1,766,926 1,417,403 1 Land sale proceeds 9,206 22,738 177,164 47,087 Severance taxes 799,693 1,005,539 1,186,908 1,316,689 Licenses, permits, fees, and other local revenues 764,913 692,540 820,286 690,962 Other revenues 222,837 75,841 125,040 633,925 investment earnings 866,143 1,772,893 2,803,466 3,751,609 Total revenues 14,045,872 18,656,431 20,082,127 21,621,004 ' Expenditures General government 2,118,166 2,713,633 3,950,927 4,504,052 Fire services 864,703 425,506 - - Emergency preparedness 48,755 23,521 6,098 7,884 Community and economic development 536,111 509,680 784,002 786,614 Health and sanitation department 331,884 329,738 363,520 373,132 Education, culture, and recreation 217,759 185,993 161,633 158,161 Maintenance and operations 567,094 698,119 - - Service district maintenance 425,712 347,934 336,385 498,539 ' Primary and secondary education 7,721,706 7,973,035 8,430,840 8,387,440 Fem Fuller trust 24,500 22,547 - - Capital outlay: Schools 131,324 68,109 464,142 1,436,639 £ General 656,423 2,972,174 332,398 373,038 Debt service: Principal 1,260,167 1,784,859 1,814,553 2,100,361 Interest 644,046 984,766 1,584,763 1,336,349 , 9 Other charges -bond issuance costs - 43,661 - - Total expenditures 15,548,350 19,083,275 18,229,261 19,962,209 Excess of revenues over (under) expenditures (1,502,478) (426,844) 1,852,866 1,658,795 , Other Financing Sources (Uses) Proceeds from sales of bonds - 20,350,000 - - Bond premium - 121,590 - - Transfers in 3,605,614 1,800,212 1,751,182 2,626,853 Transfers out (1,961,054) (1,629,610) (1,503,902) (2,464,210) ; Total other financing sources(uses) 1,644,560 20,642,192 247,280 162,643 Net change in fund balances $ 142,082 $ 20,215,348 $ 2,100,146 $ 1,821,438 I , Debt service as a percentage of noncapital N/A 17.29% 18.65 % 17.22 % expenditures ' The Kodiak Island Borough implemented GASB 34 in Fiscal Year 2005. That is why there is only 4 years of data. I� 115 1 KODIAK ISLAND BOROUGH Kodiak, Alaska General Revenues by Source(a) Last Ten Fiscal Years (a) Includes general fund only. Source: Borough general ledger 116 Licenses, Inter- Fiscal Permits Governmental Investment Operating Miscellaneous Year Taxes and fees Revenue Income Transfers Revenue Total 1998 $ 7,589,595 86,138 2,739,075 333,243 — — S 10,748,051 1999 7,694,387 86,523 2,055,803 238,515 32,632 — 10,107,860 2000 8,057,781 92,609 1,770,038 358,351 129,829 — 10,408,608 2001 8,135,184 95,129 2,135,483 583,633 18,154 44,945 11,012,528 2002 8,017,344 95,857 3,397,240 294,675 200,000 140,901 12,146,017 2003 8,028,513 153,727 2,683,460 171,532 1,000,000 — 12,037,232 2004 8,165,326 187,898 2,010,431 105,812 850,000 — 11,319,467 2005 9,378,816 161,621 1,925,405 265,392 — — 11,731,234 2006 10,257,023 171,962 2,369,185 469,913 — — 13,268,083 2007 10,218,016 78,720 3,325,899 399,149 — 82,604 14,104,388 (a) Includes general fund only. Source: Borough general ledger 116 KODIAK ISLAND BOROUGH Kodiak, Alaska Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years $1.000,000,000 $800,000,000 $600,000,000 $400,000,000 Last Ten Years Assessed Values $200,000,000 w 1998 1999 2008 2081 2002 2003 2804 2005 2008 2007 117 Ratio of total Total assessed to Fiscal Real Pronerty Personal Property Total Direct total Year Ended Assessed Full value Assessed Full value Assessed Full value Tax full value June30, value determination value determination value determination Rate determination 1998 573,742,998 587,145,000 107,599,894 310,049,900 681,342,892 897,194,900 9.92 75.94 1999 577,551,709 599,696,900 109,304,683 297,058,600 686,856,392 896,755,500 9.94 76.59 2000 594,870,287 613,787,700 120,828,748 322,947,400 715,699,035 936,735,100 9.52 76.40 2001 626,906,341 641,419,200 121,849,192 336,548,600 748,755,533 977,967,800 1.00 76.56 2002 635,931,458 654,299,600 116,117,602 323,479,600 752,049,060 977,779,200 10.04 76.91 2003 642,995,612 679,949,700 117,456,245 323,755,200 760,451,857 1,003,704,900 10.07 75.76 2004 660,040,861 687,078,300 110,941,506 307,988,900 770,982,367 995,067,200 10.00 77.48 2005 678,425,914 731,267,000 105,481,537 300,735,600 783,907,451 1,032,002,600 11.03 75.96 2006 692,572,845 786,373,800 106,206,504 309,114,600 798,779,349 1,095,488,400 12.04 72.92 2007 710,848,299 836,778,900 94,833,515 297,380,200 805,681,814 1,134,159,100 11.47 71.04 Source: Borough assessment and tax records and State full value determination letter Note: Property in Kodiak Island Bourough is reassesed once every three years.Property is assessed at actual value, therefore, the assessed values are equal to actual value.Tax rates are per S 1,000 of assessed value. Full value determination includes all exempted property located in the borough. $1.000,000,000 $800,000,000 $600,000,000 $400,000,000 Last Ten Years Assessed Values $200,000,000 w 1998 1999 2008 2081 2002 2003 2804 2005 2008 2007 117 ri a■r r� ar ri rr rr r� r rr r r� r■� rr rr rat r � r Note: The maximum mill rate allowed by State code is 30 mills ' Overlapping rates are those of local governments that apply to property owners within the City of Kodiak. ' Overlapping rates are those which apply to property owners located within Special taxing districts in the borough.They do not apply to every property owner in the Borough. 118 contrIDUtIons to the 5cnooi uistrict Fiscal Assessed KODIAK ISLAND BOROUGH Millage Year Value Contribution Equivalent 1998 681,342,892 5,715,361 8.39 1999 Kodiak, Alaska 6,492,876 9.45 2000 715,699,035 6,678,652 9.33 2001 748,755,533 6,913,926 9.23 Direct and Overlapping Property Tax Rates and 752,049,060 7,550,506 10.04 2003 760,451,857 7,767,661 10.21 2004 770,982,367 8,498,082 Contributions to the School District 2005 783,907,451 8,521,286 10.87 2006 798,779,349 8,670,440 10.85 2007 805,681,814 (per $1000 of Assessed Value) 10.76 Source: Borough ordinance and assessment Last Ten Fiscal Years Direct Rate Overlapping Rates_ Woodland' Trinity' Mission' Fiscal Acres Islands Lake Year Borough City' Street Street Tide Road Services Areas' Fire Areas' Ended Basic of Lighting Lighting Gate Monashka Service Bay View Womens Service Womens Service June 30, Rate Kodiak Area Area Area Bay District 1 Road Bay Area No. 1 Bay Area No. 2 1998 6.75 2.00 0.50 - - 1.50 0.75 1.00 2.00 1.50 1.25 - 1999 9.25 2.00 - - - 1.50 0.50 1.00 2.00 1.50 1.25 - 2000 9.25 2.00 - - - 1.50 0.50 1.00 2.00 1.50 1.25 - 2001 9.25 2.00 - - - 1.50 1.00 1.00 2.00 1.50 1.25 - 2002 9.25 2.00 - - - 1.50 1.25 1.00 2.00 1.50 1.25 - 2003 9.25 2.00 - - - 1.50 1.00 1.00 2.00 1.50 1.25 - 2004 9.25 2.00 - 0.50 1.00 1.50 1.00 1.00 2.00 1.50 1.25 - 2005 10.25 2.00 - 0.50 1.00 1.50 1.00 1.00 2.00 1.50 1.25 1.25 2006 11.00 2.00 - 0.50 1.00 2.50 1.25 1.00 2.00 1.50 1.25 1.25 2007 10.50 2.00 - 0.50 1.00 2.50 1.25 1.00 2.00 1.50 1.25 1.25 Note: The maximum mill rate allowed by State code is 30 mills ' Overlapping rates are those of local governments that apply to property owners within the City of Kodiak. ' Overlapping rates are those which apply to property owners located within Special taxing districts in the borough.They do not apply to every property owner in the Borough. 118 contrIDUtIons to the 5cnooi uistrict Fiscal Assessed Amount of Millage Year Value Contribution Equivalent 1998 681,342,892 5,715,361 8.39 1999 686,856,392 6,492,876 9.45 2000 715,699,035 6,678,652 9.33 2001 748,755,533 6,913,926 9.23 2002 752,049,060 7,550,506 10.04 2003 760,451,857 7,767,661 10.21 2004 770,982,367 8,498,082 11.02 2005 783,907,451 8,521,286 10.87 2006 798,779,349 8,670,440 10.85 2007 805,681,814 8,671,260 10.76 Source: Borough ordinance and assessment Note: The maximum mill rate allowed by State code is 30 mills ' Overlapping rates are those of local governments that apply to property owners within the City of Kodiak. ' Overlapping rates are those which apply to property owners located within Special taxing districts in the borough.They do not apply to every property owner in the Borough. 118 KODIAK ISLAND BOROUGH Kodiak, Alaska Principal Property Tax Payers Current Year and Ten Years Ago 2007 Source: Borough tax records Taxable Assessed Taxpayer Value Ocean Beauty Seafoods Inc $ 16,699,020 Brechan Enterprises Inc 13,887,896 Alaska Communications Systems C 12,044,445 Westward Seafoods, Inc 11,394,029 International Seafoods of AK 10,795,728 North Pacific Seafoods(b) 9,546,064 Wal -Mart Real Est Bus Trust 9,127,913 Trident Seafoods Corp 8,188,476 Horizon Lines of Alaska LLC(a) 7,408,186 Mill Bay Plaza Assoc LTD 7,138,400 Tyson Seafoods 6 Western Alaska Fisheries 10,120,028 Kodiak Fishmeal Co 1.1% Safeway /MBPA 8 Leisnoi Total $ 106,230, 157 Source: Borough tax records 9 0.9% 9,437,400 10 0.9% 13,829,068 11,299,304 9,091,653 8,099,123 7,035,900 13.2% $ 103,538,110 (a) in 1998 company name was Sea -Land Services (b) Alaska Pacific Seafoods combined with North Pacific Seafoods in 2006. It was ranked in 5th place in 1998. (c) in 1998 company name was T.U. of the Northland 1998 Percentage of Total Borough of Total Borough Taxable Rank Assessed Assessed Rank Value Value 1 2.1% $ 10,263,993 2 1.7% 3 1.5% 10,299,432 4 1.4% 5 1.3% 14,062,209 6 1.2% 10,120,028 7 1.1% 8 1.0% 9 0.9% 9,437,400 10 0.9% 13,829,068 11,299,304 9,091,653 8,099,123 7,035,900 13.2% $ 103,538,110 (a) in 1998 company name was Sea -Land Services (b) Alaska Pacific Seafoods combined with North Pacific Seafoods in 2006. It was ranked in 5th place in 1998. (c) in 1998 company name was T.U. of the Northland 1998 6 1.6% 2 2.4% 3 2.0% 8 1.6% 9 1.4% 10 1.2% 18.0% 119 Percentage of Total Borough Assessed Rank Value 4 1.8% 7 1.8% 1 2.5% 5 1.8% 6 1.6% 2 2.4% 3 2.0% 8 1.6% 9 1.4% 10 1.2% 18.0% 119 KODIAK ISLAND BOROUGH Kodiak, Alaska Property Tax Levies and Collections Last Ten Fiscal Years Source: Borough general ledger 120 Collected within the Fiscal Year Taxes Levied Fiscal Year of the Levy Collections Total Collections to Date Ended for the Percentage in Subsequent Percentage June 30, Fiscal Year Amount of Levy Years Amount of Levy 1998 $ 7,384,490 $ 7,121,678 96.4 % $ 77,576 $ 7,199,254 97.5 % 1999 7,704,172 7,575,491 98.3 314,367 7,889,858 102.4 2000 7,743,649 7,507,018 96.9 175,066 7,682,084 99.2 2001 8,164,127 7,912,859 96.9 204,458 8,117,317 99.4 2002 8,411,173 8,313,881 98.8 362,377 8,676,258 103.2 2003 8,395,117 8,167,437 97.3 178,885 8,346,322 99.4 2004 8,462,404 8,125,629 96.0 69,831 8,195,460 96.8 2005 8,785,412 8,139,198 92.6 521,516 8,660,714 98.6 2006 10,166,967 9,901,965 97.4 292,820 10,194,785 100.3 2007 9,957,089 9,972,257 100.2 — 9,972,257 100.2 Source: Borough general ledger 120 1 I!. 1 L 7, 121 1 KODIAK ISLAND BOROUGH Kodiak, Alaska Ratios of Net General Bonded Debt Outstanding Last Ten Fiscal Years Less Debt Net General Fiscal Assessed Gross Service Bonded Per year Population Value Bonded Debt Fund Bebt Capita 1998 14,181 (a) $ 681,342,892 $ 20,020,000 $ 432,942 $ 19,587,058 $ 1,381 1999 13,848 (a) 686,856,392 18,910,000 340,159 18,569,841 1,341 2000 13,989 (a) 715,699,035 17,025,000 272,651 16,752,349 1,198 2001 13,913 (a) 748,755,533 17,690,000 344,942 17,345,058 1,247 , 2002 14,167 (a) 752,049,060 16,615,000 448,065 16,166,935 1,141 2003 13,874 (a) 760,451,857 15,620,000 17,879 15,602,121 1,125 2004 13,811 (a) 770,982,367 14,385,000 33,915 14,351,085 1,039 2005 13,466 (b) 783,907,451 32,965,000 (348,233) 33,313,233 2,474 ' 2006 13,638 (c) 798,779,349 31,155,000 (81,511) 31,236,511 2,290 2007 13,506 (a) 805,681,814 29,060,000 (60,380) 29,120,380 2,156 Sources: Information obtained from assessment records and Borough general ledger except as otherwise noted. (a) Information obtained from State of Alaska, Department of Community and Regional Affairs, Certified Population for Revenue Sharing Program. (b) Information obtained from State of Alaska, Department of Commerce, Community and Economic Development, Community Database. (c) Information obtained from State of Alaska, Department of Labor, Economic Information Note: Detail regarding the borough's outstanding debt can be found in the notes to the financial statements. All outstanding debt is General Bonded Debt. I!. 1 L 7, 121 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 KODIAK ISLAND BOROUGH Kodiak, Alaska Computation of Direct and Overlapping Debt June 30, 2007 (a) Gross debt outstanding less applicable amounts in the Debt Service Funds. (b) Determined by ratio of assessed valuation of property subject to taxation in overlapping unit to valuation of property subject to taxation in reporting unit. (c) Per Aslaska Statute 29.45.090 there is a limit of 30 mills for ad valorem taxes. Per Alaska Statute 29.45. 100 the limitition on maximum mill rate does not apply to taxes levied to pay bonds. Sources: Borough general ledger and City of Kodiak records. 122 Percentage Kodiak Island Net debt applicable to this Borough outstanding governmental share of (a) unit (b) debt (c) Kodiak Island Borough: General obligation bonds $ 29,060,000 100% $ 29,060,000 City of Kodiak: Revenue bonds 420,000 100% 420,000 Total $ 29,480,000 $ 29,480,000 (a) Gross debt outstanding less applicable amounts in the Debt Service Funds. (b) Determined by ratio of assessed valuation of property subject to taxation in overlapping unit to valuation of property subject to taxation in reporting unit. (c) Per Aslaska Statute 29.45.090 there is a limit of 30 mills for ad valorem taxes. Per Alaska Statute 29.45. 100 the limitition on maximum mill rate does not apply to taxes levied to pay bonds. Sources: Borough general ledger and City of Kodiak records. 122 KODIAK ISLAND BOROUGH Kodiak, Alaska Legal Debt Margin Information Last Three Fiscal Years 2005 2006 2007 Assessed value $ 783,907,451 798,779,349 805,681,814 Plus exempt property 1 32,491,840 45,783,490 49,539,000 Total $ 816,399,291 844,562,839 855,220,814 The State of Alaska does not mandate a debt limit to its municipalities and political subdivisions. Debt capacity is ultimately determined by the voters and the marketplace. Source: Borough assessment records (certified tax rolls) 123 KODIAK ISLAND BOROUGH Kodiak, Alaska Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Governmental Expenditures and Transfers Last Ten Fiscal Years (a) Serial maturities in the case of serial bonds; annual Debt Service Fund requirements in the case of term bonds. Source: Borough general ledger and debt documents 124 Total general Ratio of governmental debt service Fiscal Interest Total debt expenditures to general year Principal (a) and fees service and transfers expenditures 1998 1,660,833 1,141,366 2,802,199 11,393,083 24.6 1999 1,915,833 853,652 2,769,485 10,957,892 25.3 2000 1,905,833 858,164 2,763,997 9,827,488 28.1 2001 2,015,834 746,994 2,762,828 10,735,365 25.7 2002 1,095,833 853,543 1,949,376 10,726,858 18.2 2003 1,140,833 803,224 1,944,057 13,071,957 14.9 2004 1,255,833 667,744 1,923,577 11,014,093 17.5 2005 1,780,417 983,195 2,763,612 12,027,717 23.0 2006 1,814,553 1,583,488 3,398,041 13,054,983 26.0 2007 2,100,361 1,329,456 3,429,817 13,337,188 25.7 (a) Serial maturities in the case of serial bonds; annual Debt Service Fund requirements in the case of term bonds. Source: Borough general ledger and debt documents 124 KODIAK ISLAND BOROUGH Kodiak, Alaska Ratios of Outstanding Debt by Type Last Ten Fiscal Years Note: Detail regarding the borough's outstanding debt can be found in the notes to the financial statements. All general obligation bonds are related to Governmental Activities, all notes payable are related to business type activities. * Information not available at report date. 125 General Total Fiscal Obligation Notes Primary year Bonds Payable Government 1998 $ 20,020,000 $ 2,973,652 $ 22,993,652 1999 18,910,000 2,866,855 21,776,855 2000 17,025,000 2,823,480 19,848,480 2001 17,690,000. 2,531,150 20,221,150 2002 16,615,000 1,911,221 18,526,221 2003 15,620,000 1,241,254 16,861,254 2004 14,385,000 1,262,123 15,647,123 2005 32,965,000 1,270,210 34,235,210 2006 31,155,000 1,582,188 32,737,188 2007 29,060,000 1,636,924 30,696,924 Note: Detail regarding the borough's outstanding debt can be found in the notes to the financial statements. All general obligation bonds are related to Governmental Activities, all notes payable are related to business type activities. * Information not available at report date. 125 1 Percent of Personal Income 6.81% 6.26% 5.32% 5.29% 4.86% 4.28% 3.83% 7.96% Per Capita $ 1,621 1,573 1,419 1,453 1,308 1,215 1,133 2,542 2,400 2,273 �l I I L I ' 1 126 1 1 1 I 1 127 KODIAK ISLAND BOROUGH Kodiak, Alaska ' Demographic and Economic Statistics Last Ten Fiscal Years Per Capita Percentage ' Fiscal Personal Personal School Unemployment year Population (a) Income (c) Income (c) Enrollment (b) Rate (c) 1997 14,058 336,233,000 23,725 2,862 9.1 1998 14,181 337,634,000 24,378 2,851 5.0 1999 13,848 347,630,000 25,264 2,798 5.1 2000 13,989 373,164,000 26,695 2,810 13.4 2001 13,913 382,227,000 27,794 2,774 10.9 ' 2002 14,167 381,413,000 2003 13,874 393,604,000 27,873 29,479 2,821 2,750 18.2 10.3 2004 13,811 408,069,000 30,874 2,677 10.6 2005 13,466 430,051,000 32,896 2,678 9.5 ' 2006 13,638 (d) 2007 13,506 (d) (d) (d) 2,718 2,661 6.7 6.2 Sources: ' (a) (b) State of Alaska, DCRA certified population. State of Alaska Department of education using www.eed.state.ak.us /stats /OuickFacts /ADM.pdf (c) Department of Labor using www.almis.labor.state.us (d) Per Capita Personal Income and Personal Income figures are not yet available for 2006 to 2007. 1 I 1 127 KODIAK ISLAND BOROUGH Kodiak, Alaska Average Monthly Employment & Earnings 2006' Fiscal Year 2005 Fiscal Year 2006 Average Average Average Monthly Monthly Employment Total Industries 5,381 Private Ownership 4,042 Total Government 1,339 Private Goods - Producing 1,659 Private Service- Providing 2,384 Fiscal Year 2006 Average Average Average Monthly Monthly Monthly Earnings Employment Earnings $ 2,871 5,553 $ 2,926 2,757 4,191 2,803 3,214 1,361 3,306 3,489 1,691 3,382 2,245 2,500 2,412 Number of Business by Company Size 2006' 'Data from http: / /almis.labor.state.ak.us Note: No principal employer data available from Department of Labor No data available before 2005 Number 8 9 27 58 128 Number Business Size of Businesses 250 to 499 employees 2 100 to 249 employees 10 50 to 99 employees 9 20 to 49 employees 27 10 to 19 employees 59 'Data from http: / /almis.labor.state.ak.us Note: No principal employer data available from Department of Labor No data available before 2005 Number 8 9 27 58 128 M M M M M M M r M M M M i M M M M M M KODIAK ISLAND BOROUGH MISCELLANEOUS STATISTICAL DATA Last Ten Fiscal Years 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Land area - square miles 7,130 7,130 7,130 7,130 7,130 7,130 7,130 7,130 7,130 7,130 Miles of improved street 21.6 21.6 25.4 25.4 25.6 25.6 25.6 25.6 25.6 25.6 Building permits: Permits issued 182 192 210 231 220 213 223 205 222 190 Value of buildings (thousands) 24,302 15,007 11,806 12,882 11,934 14,623 17,658 12,689 11,928 12,058 Fire Protection: Number of fire stations 2 2 2 2 2 2 2 2 2 2 Number of employees 1 1 1 1 1 1 I 1 1 I Police Protection: none (provided by the City of Kodiak within the city limits and by the State of Alaska outside the city boundaries.) Recreation: Parks (number of acres) 224 224 224 224 223 223 223 223 223 223 Facilities: Number of playgrounds 16 16 16 16 15 15 15 15 15 15 Number of swimming pools I 1 1 1 1 1 1 I I 1 Public Education: Number of schools Kodiak Area Elementary 4 4 4 4 4 4 4 4 4 4 Kodiak Area Middle School 1 I 1 1 1 1 1 I 1 1 Kodiak Area High School I 1 I 1 I 1 I 1 1 1 Village Schools (a) 8 7 8 8 7 7 7 7 8 7 Number of support personnel (b) 156 163 158 143.27 136.76 136.76 200.99 146.25 150.62 not available Number of teachers (d) 202 208 200 178.6 184.3 172.5 227.14 216.89 205.63 181.4 Number of students 2,851 2,798 2,810 2,774 2,821 2,750 2,677 2,678 2,718 2,636 Number of Municipal Employees 42.75 37.25 37 37 39 39 41 41 41 41 Elections: Number of registered voters 9,957 10,389 10,100 10,421 10,085 10,101 9,671 9,282 9,300 9,417 Number voting in last election 2,076 1,972 3,861 2,521 2,914 2,181 2,599 2,181 2,200 2,407 Percent of registered voters 21% 19% 38% 24% 29% 22% 27% 23% 24% 26% (a) The majority of Village Schools are grades K -12 (c) In FY96 this was changed to full time equivalents (b) All non - teaching employees. (d) School district personnel figures include staffing from the General Fund and Grants. Grant staffing varies from year to year depending on the number of grants received. 129 1 Construction Property Value* I Com mercial Residential Fiscal No. of KODIAK ISLAND BOROUGH No. of Kodiak, Alaska Property Value, Construction, and Bank Deposits Last Ten Fiscal Years ' Construction Property Value* I Com mercial Residential Fiscal No. of No. of year permits Value permits Value Commercial Residential Nontaxable 36 1,559,938 112 6,262,439 157,911,064 391,545,900 2,404,872,414 1998 39 16,676,612 149 8,103,624 161,787,264 411,955,734 2,420,596,952 ' 1999 51 6,784,879 141 8,222,313 160,921,064 416,630,645 2,420,601,099 2000 54 2,720,259 156 9,086,074 172,709,507 422,160,780 2,475,199,399 2001 33 1,379,673 198 11,501,804 193,882,996 433,023,355 2,475,199,399 2002 30 1,494,337 190 10,439,985 199,689,615 443,305,997 1,994,297,545 2003 47 2,915,740 166 11,707,269 206,386,964 463,419,197 1,996,235,045 ' 2004 44 2,859,775 179 14,798,679 207,611,182 480,581,831 1,736,191,891 2005 47 2,097,983 158 10,590,784 210,328,700 482,244,145 1,666,526,546 2006 30 1,555,718 192 10,372,416 213,258,488 497,589,811 1,663,156,146 2007 42 3,277,292 148 8,780,900 227,514,405 507,013,524 1,664,332,146 ' *Assessed value. Source: Borough assessing records, City of Kodiak building department and local bankers. u C� I t✓ 130 1 KODIAK ISLAND BOROUGH Kodiak, Alaska Full -Time Equivalent Borough Employees by Function/Program Last Three Fiscal Years The Kodiak Island Borough implemented GASB 34 in Fiscal Year 2005. That is why there is only 3 years of data. 131 Full -time Equivalent Employees as of December 31 2005 2006 2007 Function General Government 23.5 23.5 23.5 Community and Economic Development 5 5 5 Municipal Solid Waste and disposal 7 7 7 Kodiak fisheries research center 2.5 2.5 2.5 Total 38 38 38 The Kodiak Island Borough implemented GASB 34 in Fiscal Year 2005. That is why there is only 3 years of data. 131