2010-05-27 Work SessionKodiak Island Borough
Assembly Work Session
Thursday, May 27, 2010, 6:30 p.m., Borough Conference Room
Work Sessions are informal meetings of the Assembly where Assembly members review the upcoming regular meeting agenda
packet and seek or receive information from staff. Although additional items not listed on the work session agenda are discussed
when introduced by the Mayor, Assembly, or staff, no formal action is taken at work sessions and items that require formal
Assembly action are placed on regular Assembly meeting agenda. Citizen's comments at work sessions are NOT considered part of
the official record. Citizen's comments intended for the "official record" should be made at a regular Assembly meeting.
CITIZENS' COMMENTS (Limited to Three Minutes per Speaker)
BOROUGH LEGAL RFP INTERVIEWS
1. Jamin Law Office
CITIZENS' COMMENTS (Limited to Three Minutes per Speaker)
ITEMS FOR DISCUSSION
1. Central Gulf of Alaska Rockfish Program
2. Continuation of KIB FY2011 Budget
PUBLIC HEARING
Ordinance No. FY2010 -01 C Amending Ordinance No. 2010 -01 Fiscal Year 2010 Budget By
Amending Budgets To Account For Various Revenues That Are Over Budget, Provide For Additional
Expenditures, Budget New Projects, Accept Grants, And Move Funds Between Projects.
Ordinance No. FY2011 -01 Levying Taxes on All Taxable Real and Personal Property Within the
Kodiak Island Borough for the Expenses and Liabilities of the Kodiak Island Borough for the Fiscal
year Commencing on the First Day of July 2010 and Ending on the Thirtieth Day of June 2011
(Fiscal Year 2011 Budget.)
UNFINISHED BUSINESS
NEW BUSINESS
CONTRACTS
Contract No. FY2010 -10 Extension of the Recycling Contract with Threshold Services Inc.
RESOLUTIONS
Resolution No. FY2011 -02 Reestablishing the Fees of the Kodiak Island Borough.
ORDINANCES FOR INTRODUCTION — None.
OTHER ITEMS — None.
EXECUTIVE SESSION
Review of the General Legal Services Interviews.
Review of the Legal Opinion Regarding Garbage Lien.
MANAGER'S COMMENTS
CLERK'S COMMENTS
MAYOR'S COMMENTS
ASSEMBLY MEMBERS COMMENTS
/a 7 /a-o io L &v
KODIAK Island Borough/City of Kodiak
Fisheries Policy
2/e,e_e
0 4540-00
The Kodiak Island Borough and the City of Kodiak, as legitimate stakeholders in the
health of Alaska's renewable marine resources, hereby join together to set forth a joint
fisheries policy to guide community leaders and ensure that policymakers recognize and
protect Kodiak's cultural and economic reliance on Alaska's marine resources.
The marine resources of the Gulf of Alaska have sustained the people of Kodiak
for10000 years. In 1792, Russian fur traders established a trading center at Kodiak, which
makes Kodiak the oldest port in Alaska. Thus, for more than 200 years, Kodiak has
served as the largest commercial marine resource -based hub in the Gulf of Alaska. The
city of Kodiak and Kodiak Island Borough have built and continue to invest in
infrastructure that supports our marine industries.
The fisheries, including commercial, sport and subsistence, is the backbone of Kodiak's
economy: The seafood industry, including fish harvesting and seafood processing, is the
second largest employment sector in Kodiak, equaling 27 percent of total employment.
Including other fisheries- related sectors such as the U.S. Coast Guard, Alaska
Department of Fish and Game and NOAA/NFMS, waterfront businesses, and
transportation and marine support services, the fishing sector comprises more than 35
percent of Kodiak's total employment.
Kodiak consistently ranks among the top three largest fishing ports in the nation in terms
of value and poundage landed. Homeport to more than 700 fishing boats, Kodiak has the
largest and most diversified fishing port in Alaska. Area residents hold more than 1,100
commercial fishing permits. Of the 10 top employers in Kodiak, five are fish processing
plants, including facilities in remote sites throughout the Kodiak Island Archipelago. The
processing sector employs a resident workforce of approximately 1,370 people for a
combined payroll of more than $54 million.
,/ c)7 /ao /P /6464 --e-e-oz-ou
Benefits:
• improved safety at sea
• controlled capacity of the fleets
• improved NMFS' ability to conserve and manage the species in the program
• increased vessel accountability
• reduced sea floor contact (dragging on bottom)
• full retention of allocated species
• reduced halibut bycatch
• stabilization of workforce
• more shore side deliveries of rockfish
• increased rockfish quality and diversity of rockfish products
• removal of processing conflicts with GOA salmon processing
• slowed fishery: stops race for fish and extends the season which increases
production efficiency b
• extension the seasons the halibut savings from catcher processors enabled
flatfish fishery to remain open during a 5 eason, which was normally closed
due to shorfalls in available halibut PSC
Some of the management strategies under consideration:
Page 6:
Vessel use cap of between 4-10%
Processing cap of 20, 25, 30 or 33% to ensure that "no processor purchases over
the specific share of the landing in the fishery"
Page 6, Mandatory deliveries to Kodiak plants:
Option to add a port delivery requirement for allocation of the primary and
secondary species to the catcher vessel sector. The port delivery requirement is intended
to protect the community of Kodiak from changes in the location of shore based
processing that could occur in the rockfish program. If adopted, this option would ensure
that Kodiak remains the processing base for the fishery and that Kodiak processors and
the community continue to benefit from the fishery, at some cost to competing Alaska
communities and fishermen.
Pagel, Allocation of Harvester Share to Processors:
Under this alternative, eligible processors would receive 10, 20, 30% of the sector's pool
of all allocated species based on processing in the fisheries during the qualifying period
... Processors that receive an allocation of harvest shares are likely to realize
`substantially greater benefits from the fishery, than under the other catcher vessel
alternatives. '
"The specific effects of the processor allocation will also depend, in part, on the rules
governing their use and transfer."
Kodiak Fisheries Advisor talking points for the North Pacific Fishery
Management Council April 2010 Meeting
The elected officials of the Kodiak Island Borough and City of Kodiak have sent
me as Kodiak's Fisheries Advisor to speak to you today as the Council considers
management options for the Gulf of Alaska Rockfish Fishery.
I am not here today to present a specific position on the Rockfish Program. I am
here to remind the Council that the fishing community of Kodiak is a stakeholder
in the Gulf of Alaska Rockfish Fishery. Like every other stakeholder in these
fisheries, Kodiak expects due consideration be given as the Council deliberates
rationalization measures for the Gulf of Alaska Rockfish Fishery.
The Gulf of Alaska fisheries are the lifeblood of Kodiak. The nine fish processing
plants lining Kodiak's industrial waterfront operate year- round. In addition, two
remote plants on Kodiak Island process fish seasonally. Together, these Kodiak -
based plants employ a large permanent workforce and process roughly 300 million
pounds of product annually million, placing Kodiak among the top three
commercial fishing ports in the nation.
Kodiak also is homeport to one of the largest and most diversified commercial
fishing fleets in the Northwest with more than 700 vessels, ranging from 38 -foot
jiggers to 110 -foot trawlers and crabbers making up the fleet.
Clearly, the economic health and social welfare of the Kodiak region depends upon
the sustained ability of its residents to harvest and process the marine resources of
the Gulf of Alaska.
The Kodiak Island Borough Assembly and the Kodiak City Council readily
understand that federal fishery management actions can determine the extent to
which Kodiak's residents have the ability to harvest and process the marine
resources of the Gulf of Alaska and Bering Sea; can alter the economic and social
relationships among Kodiak's harvesters, processors and fishery support
businesses; and can affect the overall economic health and social welfare of the
Kodiak community at large.
Thus, to stay informed and be prepared to testify on potential impacts of federal
fishery management actions affecting our fishing community, the Kodiak Island
Borough Assembly and the Kodiak City Council jointly established the Kodiak
Fisheries Advisory Committee (KFAC) in 2008 to facilitate industry -wide
discussions and consensus, where possible.
Each sector of the Kodiak commercial fishing industry is represented on the
committee: Large Pot Vessels, Small Pot Vessels, Large Trawl Vessels, Small
Trawl Vessels, Large Longline vessels, Small Longline Vessels, Jig Vessels,
Salmon/Herring Net Vessels, Crewmembers, Kodiak Rural Communities, Large
Processors, Small Processors, Alaska Department of Fish & game Advisory
Committee, Lodge /Charter Boat Operators, Business Community (non- fishing
related), Citizen -At- Large, Conservation Community. The following seats are
designated for non - voting, ex- officio members: Kodiak City Council member,
Kodiak Island Borough Assembly member; and Kodiak residents serving on the
North Pacific Fishery Management Council, North Pacific Fishery Management
Council Advisory Panel, Alaska Board of Fisheries.
The Kodiak Fisheries Advisory Committee holds monthly meetings, which are
open to the public. Discussion is lively and, so far, all present have kept their hands
to themselves.
One point that committee members agree on is that the marine resources of the
Gulf of Alaska sustain the Kodiak economy and is vital to the future of the
community.
Thus, as the Council considers management options for the Gulf of Alaska
Rockfish Fishery and for other Gulf of Alaska species in the future, the Kodiak
Island Borough Assembly and the Kodiak City Council recognize that now is the
time to join together and speak with one voice to protect the socio- economic health
and future of Kodiak as a whole.
Now is the time to remind the Council that the socio- economic foundation of
Kodiak, one of the top three fishing ports in the nation, is built upon the harvesting
and processing sectors of the community.
Now is the time to remind the Council that Kodiak is a major stakeholder in the
Gulf of Alaska fisheries and must be given due consideration as such regarding all
Gulf of Alaska management decisions.
And now is the time to remind the Council that the Magnuson- Stevens
Reauthorization Act states that "Conservation and management measures shall,
consistent with the conservation requirements of this Act ... take into account the
importance of fishery resources to fishing communities by utilizing economic and
social data ... in order to (A) provide for the sustained participation of such
communities, and (B) to the extent practicable, minimize adverse economic
impacts on such communities."
Representing the elected officials of Kodiak, I urge the Council to scrutinize the
Gulf of Alaska Rockfish program. Kodiak's wellbeing depends on the Council to
conduct a thorough analysis of the socio- economic impact of fishery management
programs on the Kodiak region, including our small rural communities. Kodiak's
future depends on the Council to take action on management plans that ensure
Kodiak continues to thrive as the robust marine resource -based community that it
has been for thousands of years.
Kodiak Island Borough
TO: Borough Mayor and Assembly
THROUGH: Rick Gifford, Borough Manager
FROM: Karleton Short, Finance Director 'WI'?
SUBJECT: FY2011 Budget
DATE: May 26, 2010
MEMORANDUM
Here are some changes we would like to make to the proposed budget and answers to some
questions raised by assembly members.
We are proposing some updates to the budget that was introduced on April 20, 2010. These are
as follows:
a. We need to reduce the amount budgeted for real property tax by $97,500. We based our
budget on the gross assessed values, not the net values.
b. We can increase the amount budgeted for personal property tax by $137,000. The
certified roll was higher than originally estimated.
c. We have increased the contribution to the Kodiak Chamber of Commerce from $43,000
to $45,000, an increase of $2,000 to reflect additional responsibilities related to fisheries
issues.
d. We are increasing the direct appropriation to the school district by $172,000. This is due
to the reduction in both liability and property insurance for the school district.
1. Liability insurance is $112,000 less than originally budgeted.
2. Property insurance is $60,000 less than originally budgeted. This expense is in
the Building and Grounds Fund.
e. The transfer of $178,000 from the Facilities Fund to Building and Grounds has been
reduced by $60,000 to $118,000. This amount is now available for capital projects.
f. We are adding the Karluk UST (Underground Storage Tank) Removal project for
$91,515.
g. We are adding the Karluk HVAK Controls project for $59,400.
This is a list of our unfunded renewal and replacement capital projects for FY2011.
Cost State Share
Borough Building Roof 1,190,020 0%
East Generator & Building 780,196 70% 546,137
Peterson Flooring 265,724 70% 186,007
Elevator Controls 51,840 70% 36,288
Larsen Bay Old HVAC Controls 146,639 70% 102,647
Larsen Bay Old HVAC Equip. 399,848 70% 279,894
$ 2,834,267 $ 1,150,973
Borough Share $ 1,683,294
About 2 mills
These projects could be financed with an interfund loan from the Facilities Fund. We would
have to make payments on this loan.
We are unsure if the Assembly wants to increase the contribution to the Kodiak Island
Convention and Visitors Association by $5,000. This increase was requested by the Kodiak
Island Convention and Visitors Association.
As a side note Borough expenditures have changed dramatically over the last twenty years.
Please look at the attached pie charts to see these trends.
These trends are fairly self explanatory.
We have $9,434 available in Education, Culture and Recreation and $2,374 available in Health
and Social Services for a total available of $11,808. There may be more available after we make
the final crossing guard payment.
We have met with the school district and have reconciled their requests with our budget. Please
note that this worksheet shows our amounts as if the proposed budget amendments will be
passed.
KIB KIBSD Difference
Mental Health $ 381,350 $ 381,350 $ -
Audit 37,000 37,000
Liability Insurance 150,000 150,000
Property Insurance 100,000 100,000 -
Snow Removal 110,000 110,000 -
Repairs 25,000 25,000
Appropriation 9,472,000 9,793,119 (321,119)
$ 10,275,350 $ 10,596,469 $ (321,119)
2
Budget questions from Assembly Member Pat Branson
a) Job Description for new position of Administrative Assistant
1) Attached
2) This job description is being updated.
b) Job Description for new position of Appraiser Assistant (Appraiser Technician)
1) Attached
2) We currently have 7,804 real property and 1,354 personal property accounts with
1 /2 positions assigned for real property review and 1/2 position for personal
property review.
c) Inventory of KIB fleet of cars & what is proposed to purchase with $50,000.
a. This is an inventory of our current vehicles. Vehicles that are assigned to funds
other than the General Fund (i.e. fire departments, landfill, etc.) have been left
off.
1992 Ford Club Van General Use
2005 Ford F150 Maintenance Mechanic
2006 Ford Escape General Use
2006 Ford Escape KIB Manager
2007 Ford Escape General Use
2008 Ford F150 4X4 Maintenance Coordinator
General use includes making bank deposits, attending off site meeting, assessing,
Community Development Department inspections, Engineering/Facilites
Department inspections, etc.
b. We propose purchasing two SUV's similar to Ford Escapes.
c. One of these vehicles would be for the Code Enforcement Officer and the other
would be primarily for the Assessing Department but some general use.
d) Capital budget: what is "reinstating the High School Fire Alarm Project ?" How much is
it?
a. The KMS seismic project went over budget. We want to close this project in
FY2010. To do so we propose moving the funding from the High School Fire
Alarm Project to the KMS Seismic Project to cover the deficit. Work on this
project would not have started before July 1, 2010. We are now using funds
from the Facilities Fund, which will become available on July 1, 2010, to fund
this project.
3
e)
Page GF 15 -KIB Assembly support goods & services $72,700 -what is this for? Why the
jump in FY 09 and 10 budget?
a. These are the line item budgets that make up this category.
Office Supplies
Dues /Books /Period
Honorarium /Amenities
Food /Business Lunch
Insur And Bonding
Travel /Per Diem
Mayor Travel /Per Diem
Telephone
$ 500
20,000
2,500
9,000
700
24,000
15,000
1,000
$ 72,700
b. The FY2009 amounts are actual amounts while the FY2010 amounts are
budgeted. We actually budgeted $79,500 for support goods and services in
FY2009.
c. The largest component of this difference is Assembly and Mayor travel and per
diem costs. In FY2009 the Assembly and Mayor did not use the total amounts
budgeted for travel and per diem.
f) Page GF17 -Is the jump in fringe benefits $123,890 (10) to $197,810 mainly due to new
position? And in FY08 was only $87,949?
a. The jump is mainly due to the new position. When we add a new position we
budget their health insurance as a married person with children. The cost for a
married person with children is $22,955 while the health insurance costs for a
single person is only $7,478.
g)
How much is health insurance and fringe benefits going up overall? % &$ over FY 10
a. In the general fund budgeted benefits are increasing from $1,032,821 to
$1,328,469. Here is a spreadsheet detailing this changes.
Fica Taxes
Group Insurance
Retirement
Workers Compensation
Total
FY2010
Ammened
Budget
$ 143,840
456,651
401,530
30,800
$ 1,032,821
FY2011
Ammended
Budget Increase
$ 155,420 $ 11,580
573,939 $ 117,288
564,940 $ 163,410
34,170 $ 3,370
$ 1,328,469 $ 295,648
h) Page GF25 -Please explain the re- alignment in personnel in MIS - supervisor and no longer
LAN administrator
a. This change was made in the FY2010 budget. This reflects our change in
computers from an AS400 system to a network system. Before we had someone
more conversant with a mid size computer manage the department. As
technology changed we felt that a person more versed in network management
4
would be the best choice to supervise the IT department. Qualified mid range
computer programmers are getting harder to find and people would not accept the
position at the salary level we set for this job. Because of this we rewrote the
description of the LAN administrator to IT supervisor.
i) Page GF29 -what is the reason for leap in fringe benefits from 43, 610 to 100,397?
a. Here is a matrix showing the two years:
j )
Proposed FY2011 Budget
Total Health, Life 0.2796 Total Total
Tot.Sal. FICA & Disability PERS W/C Fringe Cost
Eng. /Fac. Director 62,640 4,790 13,824 17,510 2,540 38,664 101,304
Project Manager 11,300 860 1,262 3,160 460 5,742 17,042
Project Assistant 14,030 1,070 4,785 3,920 130 9,905 23,935
Maint. Coordinator 22,520 1,730 5,856 6,300 910 14,796 37,316
Maint. Engineer 12,850 990 1,952 3,590 1,130 7,662 20,512
Maint Mech 2,900 220 40 810 250 1,320 4,220
Secretary III 24,860 1,900 9,530 6,950 230 18,610 43,470
Receptionist 1,680 120 30 470 20 640 2,320
Receptionist 9,060 690 160 2,530 80 3,460 12,520
161,840 12,370 37,439 45,240 5,750 100,799 262,639
FY2010 Budget
Eng. /Fac. Director 34,350 2,630 6,948 7,560 1,390 18,528 52,878
Project Manager 3,010 230 0 660 120 1,010 4,020
Project Assistant 1,920 150 0 420 20 590 2,510
Maint. Coordinator 27,960 2,140 6,848 6,150 1,140 16,278 44,238
Secretary III 12,570 960 3,354 2,770 120 7,204 19,774
79,810 6,110 17,150 17,560 2,790 43,610 123,420
A significant portion of these changes are due to our better records on what people
are doing. These include items such as safety meetings and department head
meetings.
Page GF 31 -no enforcement officer listed -is this is another department?
a. This is how the enforcement officer is allocated:
Solid Waste 50%
Tourism 10%
Resource Management 20%
Community Development Department 20%
Total 100%
b. We will go back through each department and add their percentage of this
position.
k) Page GF37 -Why the increase in support goods from 172,800 to 245,300?
a. The largest changes are printing & binding of $3,000, postage of $5,000, credit
card fees of $10,000 and the purchase of 2 new cars for $50,000.
b. The new car purchases should be under capital outlay (they are in the line item
budget). We will adjust them in the next printing of the budget.
5
1) Page SR 12 New position maintenance supervisor (Coordinator) - wasn't that from last
year?
a. This position was added last year. We are correcting the program budget
summary and the schedule of employees.
m) Page SR32 Is the $65,000 requested from Service Area 1 for Selief Lane resurfacing in
the $205,000 budget line item or what is that amount for?
a. We did not fund the $65,000 transfer from the General Fund to the service
district as requested by the service district for resurfacing Selief Lane.
b. We budgeted this instead with a use of fund balance (Service District No. 1 fund
balance) instead of a transfer in from the General Fund.
c. We mistakenly labeled this use of fund balance as Temporary Fiscal Relief.
This will be corrected in the next version of the budget.
n) Page SR57 What is the amount in the Tourism Development Fund? Is it 16,184
contingencies?
o)
a. Here is a better breakdown of the expenditures in the Tourism Development
Fund.
Dig Afognack $ 566
Historical Society 6,500
Kodiak Convention and Visitors Bureau 55,000
Kodiak Maritime Museum 2,000
Outside Audits 10,000
Insurance & Bonding 55
Contingencies
b. We will expand this table in the next version of the budget.
Worksheet Report:
1. Page 3 We used 1,279,006 in fund balance in FY10 amended budget and projecting to
use 1,206,080 in FY 11. What was the amount in fund balance as of July 1, 2009? From
FY06 to FY 09 we did not use fund balance. Can you give a summary of how the FY11
fund balance is spread out for expenses?
a. Our fund balance on June 30, 2009 was $3,124,289.
6
16,129
$ 90,250
b. Here is the budgeted use of fund balance compared to how much the fund balance
went up or down.
Increase
Bugeted Use of (decrease) in
Fund Balance Fund Balance Diference
FY2006 $ 688,693 $ 213,247 $ 901,940
FY2007 86,282 767,200 853,482
FY2008 596,085 437,165 1,033,250
FY2009 870,169 (106,193) 763,976
As you can tell it can be very different. Having a vacant position for a year can
make a difference of over $100,000. Also, some revenues, such as fourth quarter
severance taxes are not received until after year end and can be hard to estimate
exactly.
c. I really can't say how our fund balance is spread out for expenses. This question
may be answered in response to Judy Fulp's first question. (I didn't really
understand what this question was)
2. Page 15 -what is the increase from 4,536 to 17,500 in travel/per diem under Assessing?
a. This $13,000 is for 10 days of chartered aircraft time for phase 1 of the
reappraisal of remote parcels.
3. Page 17 why the increase in retirement in Engineering from 20,583 to 44,430 and in
salaries from 88,319 to 156,950 with only .50 staff increase?
a. We are going through the budget to allocate partial salaries better. The answer to
question i above will also answer this question.
4. Page 33 -what is $12,000 in FY10 for crimestoppers?
a. This should have been charged to the KANA Family Center.
b. It has been corrected.
5. Page 91 -what happened to volunteer stipends in Fire Protection 1?
a. It was incorrectly allocated to allocated salaries in FY2010 and temporary help in
FY2011. This has been corrected in both places.
7
Here are the questions from Judy Fulp
Rick,
Could you please list out for our next upcoming work session a simple list of budget
increases (where the increased tax assessments of around $700,000 went in the budget that
we are about to approve).
Thanks!
Here is a simple list of increases:
Administrative Assistant
Appraiser Technician
Increase in Fringe Benefits
Debt Service
Building & Grounds
Special Projects
Engineering/Facilities
Two new cars
Credit Card Fees
Update hazard mitigation plan
$ 92,380
87,380
208,146
149,231
34,500
80,000
111,979
50,000
10,000
60,000
$ 883,616
less above two positions
pool bonds
Chiniak school
Job descriptions & salary scale review
A better allocation of staff time
$50,000
Also, could you explain more why we need to keep using over a million of our fund balance,
or savings, to balance the budget both in this year and last year's budget? Please, also give us
your opinion about such a low fund balance.
We will probably never reduce our fund balance as much as budgeted. There are several
reasons for this. Here are some, but not all, of the reasons why this will probably happen:
• Budgeted positions are not filled.
• We hire a single person rather than a married person with kids. (We do have to be
careful. We cannot discriminate based on whether or not they have a spouse or
dependent children.)
• The manager and department heads never want to exceed their budget. Because of
this they always leave some room in their budget for unexpected expenditures
towards the end of the year.
If the cost of providing governmental services to the Borough residents keeps rising but our
revenues do not we have to use our fund balance. If we continue to use it at some point in
time we won't have any left.
In a neutral market the market value of real and personal property should increase at the same
rate as inflation. Our School District expenditures are rising much faster than the rate of
inflation. Because of this we have to do one of the following:
• Raise the mill rate
• Find alternative sources of revenues
• Reduce other services the Borough provides
• Limit the amount of funding provided to the School District
8
Assuming revenues and expenditures remain at the same level and we use most of our fund
balance this year we will have to raise the mill rate at least one mill just to cover the costs of
providing services at the same level we are now. This does not include an increase in our
appropriation to the School District.
We also need to remember that we are going to sell the first $25,000,000 in bonds for the
High School Renovation and Additions project next year. These bonds will require principal
and interest payments of approximately $800,000 per year or about 7 /a of a mill. These
payments will start in FY2012.
This year School District has asked for an increase in our appropriation that would cost us
another 1/2 mill. This increase is not included in the budget at this time.
There is some concern that we may be reducing our fund balance too low. It is possible that
if one of our sources of revenue is lower than expected or if we have unexpected expenses.
This could bring our General Fund — fund balance to less than $1,000,000. To date this has
not happened.
9
Changes in General Fund Expenditures over the Last 20 Years.
1989
2009
1 0
Assessing
3%
Non - profits etc
4%
Community
Development
6%
Assessing
3%
Community
Development
6%
Non - profits etc
2%
Health & Sanitation
1%
We had 2,273 students in FY1989 and 2,598 students in FY2009. The largest number of
students was 2,842 in FY 1996.
It should also be noted that in FY2009 the Borough transferred $981,036 to debt service. In
FY1989 the General Fund did not make a transfer to the Debt Service.
KODIAK ISLAND BOROUGH
Job Title:
Department:
Supervisor:
Job Status:
Appraiser Technician
Assessing
Assessor
Non - Exempt
JOB DESCRIPTION
Job Summary: At the direction of the supervisor, this job requires field work in the collection
of data on real and personal property and application and processing of the data utilizing
established policies and procedures. Requires quick, accurate completion of data entry and
mathematical computations. Performance of duties will require contact with the general public
and the ability to deal professionally in explaining the ad valorem appraisal process. Performs
with a high level of independence and minimal supervision.
ESSENTIAL FUNCTIONS:
No. Description of Essential Functions
1. Performs field inspections of real and personal property accounts along with the
measurement of improvements and collection of property particulars. May be required to
travel by ground transportation, boat, and light aircraft.
2. Prepares, prints and mails personal property filing forms according to established policies
and procedures. Performs data entry of personal property filing information including but
not limited to calculations of assessed values quickly and with a low error rate.
3. Enters data into applicable computer programs along with the compilation of data and
reports for the Assessor.
4. Maintains and processes information utilizing the real and personal property data bases.
5. Maintains and updates exemption programs on the data base including entering each
applicant's personal information for qualification; printing and mailing applications;
entering assessed values and calculating exempt values; printing reports for certifying the
tax roll and preparing the annual report to the State Assessor.
6. Reviews personal property filings and assessments with the public. Makes adjustments to
assessed values with the direction and supervision of the Assessor.
7. Reviews files and assessment data with the public.
8. Works with the Assessment Clerks in the day -to -day operations of the office as directed.
9. Processes and compiles Board of Equalization meeting materials during the appeal period
and notifies board members and appellants of meetings. May attend meetings with the
Assessor.
OTHER RESPONSIBILITIES:
1. Performs other job related duties as assigned.
Appraiser Technician Page 1 of 2 January 2001
Supervisory Organization:
Education and Experience:
Assessor
1
Appraiser Technician
MINIMUM REQUIREMENTS: Appraiser Technician
High school graduate or the equivalent and three (3) years of general office work
experience at a level equivalent to a Secretary III with legal, real estate, or title office
work experience preferred. This position requires an additional one (1) year of work
experience in an assessing field in a position of comparable duties to an Assessment
Clerk II, unless the applicant has a sufficient educational and work experience
background to demonstrate the ability to perform the job with a minimum amount of
supervision, and is willing to be subject to a one -year probationary period.
Knowledge and Skills:
Basic knowledge of construction techniques, materials and types.
Knowledge of personal computers, along with data collection and entry.
Ability to operate independently with minimal direction in a timely and efficient manner.
Knowledge of mathematics and ability to make basic calculations with a high degree of
accuracy.
Knowledge of general real estate principles including land title and survey.
Ability to speak clearly and effectively and to deal with the public calmly and
professionally in stressful situations.
Basic knowledge of appraisal concepts.
Ability to walk over rugged terrain and work in possible inclement weather.
Appraiser Technician Page 2 of 2 January 2001
1
KODIAK ISLAND BOROUGH
1
Job Title:
Department:
Supervisor:
Job Status:
ESSENTIAL FUNCTIONS:
No. Description of Essential Functions
OTHER RESPONSIBILITIES:
JOB DESCRIPTION
Administrative Assistant
Manager's Office
Borough Manager
Non - Exempt
Job Summary: Responsible for coordinating the administrative activities of the
Manager's office which includes answering inquiries, drafting correspondence, records
management and project management. Relieves the Manager of professional tasks as
delegated. Serves as purchasing agent for all borough procurement activities.
1. Opens, reads and routes incoming correspondence. Originates and receives
telephone calls, takes messages and communicates information not requiring
Manager's attention. Manages Manager's calendar and travel schedule. Manages
the Manager's office in Manager's absence including presenting issues and
activities requiring Manager authority to Acting Adminstrative Official.
2. Manages projects which may require independent analysis and organization of a
wide variety of materials. Coordinates special projects and events as assigned.
3. Serves as purchasing agent under Manager's direction. Ensures that price quotes
are obtained by departments prior to placing requisitions. Prepares and monitors
purchase orders. Reviews and authorizes check requests and purchase orders
from all departments. Advises departments on purchasing procedures. Maintains
purchasing manual. Reviews all drafts of Requests for Proposals and Requests for
Bids for compliance with Borough purchasing rules and procedures and State and
Federal laws.
4. Designs, organizes, maintains, verifies and retrieves records from various
recordkeeping systems. Prepares composites and maintains confidentiality
according to established procedures.
5. Composes, edits, types and proofs correspondence, reports, memos, meeting
minutes, awards and other documents with minimal direction.
6. Maintains grant administration files and monitors borough adherence to state
grant reporting requirements.
1. Performs other job related duties as assigned.
Administrative Assistant Page 1 of 2 January 15, 1999
Supervisory Organization
MINIMUM REQUIREMENTS: Administrative Assistant
Education and Experience:
A.A. degree or related amount of college coursework in business, office
management & technology or related field and three (3) years of progressively
responsible work experience in a local government or non - profit organization.
College coursework in public administration or related field may be substituted
for two (2) years of the required experience (in this instance, at least one (1) years
work experience in a local government or non - profit organization is still required).
Two (2) years experience as an office manager in a non - government setting may
be substituted for the three (3) years of work experience in a local
government/non - profit setting. Comprehensive experience with personal
computers, various software programs and recordkeeping preferred.
Knowledge and Skills:
Manager
Administrative Assistant
Knowledge of modern clerical and office management principles, practices, and
procedures, including word processing and other personal computer programs.
Ability to type 45 words per minute.
Knowledge of correct and effective use of English grammar.
General knowledge of accounting practices and procedures.
Knowledge of the organization, functions, and activities of local government.
Ability to relieve a department head of administrative details with a minimum of
supervision.
Ability to work with the staff, public and officials in a tactful, pleasant, courteous,
and diplomatic manner, and to maintain the confidentiality of information.
Ability to express ideas clearly and concisely.
Ability to research, design and produce various reports independently.
Ability to establish and maintain effective working relationships.
Administrative Assistant Page 2 of 2 January 15, 1999
School District Long -Term Funding Task Force Report
November 18, 1996
Robin Heinrichs, Chair
Lacey Berns
Julie Bonney
Randy Busch
Robin Killeen
Alice Knowles
Woody Koning
Jack L. McFarland
William Murdock
Peter Probasco
Jeff Stephan
Background
This task force was established by the Kodiak Island Borough Assembly through Resolution
Number 96 -12. In addition, Resolution Number 96 -12 approved the fiscal year (FY) 1997 local
contribution to the School District budget. The task force was charged to study and identify critical issues
related to funding for the Kodiak Island Borough School District (KIBSD) and present a long -term funding
approach that would ensure appropriate and predictable funding for the operation of public schools within
the Kodiak Island Borough.
Specifically, the Task Force was assigned to:
1. Study and develop a prospectus on future financial support for education at the
state and federal level.
2. Project the level of required local financial support for education in view of the
prospectus.
3. Identify funding sources /mechanisms for local support, e.g., mill equivalency,
sales tax, etc.
Executive Summary
The Kodiak Island Borough Assembly should increase the property tax mill rate from the current
6.75 mills to 8.8 mills for FY1998 through FY2002. Also, the Assembly should place the issue of a sales
tax on the November, 1997 ballot. If this ballot initiative is approved, the Assembly should institute a 2
percent area -wide sales tax effective January 1, 1998.
The reasons for these actions are as follows:
1. Increased student enrollment.
2. Declining federal and state revenues.
3. Rise in property values no longer keeping up with increases in expenditures.
4. Desire to diversify Borough revenue sources.
5. Effect of inflation on expenditures.
6. Effect of salary structure on expenditures.
Current Situation
Both the Kodiak Island Borough and the Kodiak Island Borough School District utilized a "use of
fund balance" line item to balance their budgets for FY1997. The Borough used $918,200 and the School
District used $718,859 for a total of $1,637,059 for FY1997. This was based on a mill rate of 6.75 mills (a
mill is equivalent to one tenth of one percent). In order to have balanced the FY1997 budget without using
fund balance, a mill rate of 8.9 mills would have been required.
Facts and Assumptions
The first step for the task force was to gather information. Some of the information was factual in
nature, but some assumptions had to be made. The task force attempted to base its assumptions on factual
information to the fullest extent possible and then looked to the most knowledgeable source or sources.
The information gathered was listed in this section. Included were any assumptions made and the
basis for those assumptions.
Following are the areas the task force concentrated on:
* Property Tax Revenues
* Severance Taxes
* Sales Tax
* Comparative Borough Per Capita Tax Amounts
* Educational Endowment Fund
* Student Population
* Federal and State Funding
* KIBSD Expenditures
Property Tax Revenues. The task force assumed little increase in property values through FY2002. The
primary Borough revenue source is property tax. The Borough has a property tax on both real and personal
property, but the personal property tax on boats is capped at $15.00 per boat. The Borough has realized an
increase in income each year from property tax revenues due to an increase in assessed value. The
following chart shows the ten year history of assessed values with a projection for the next five years.
$700,000,000 —
$600,000,000 —
$500,000,000 —
• $400,000,000
y
d $300,000,000 —
$200,000,000
$100,000,000 —
$ I
co 0) 0 r N CO I (() (D r- co 0) 0 r N
co CO m a m O m o 0) O m O O O
0) 0) 0) 0) 0) 0) 0) 0) 0) 0) 0) 0 0 0
✓ r r r r r T - T r r N N N
Chart 1
Actual and Projected Assessed Values
3
Fiscal Year
As shown in Chart 1, assessed values showed a dramatic increase from FY1989 to FY1995. In
recent years, these values have started to level off beginning in FY 1996. The Borough Assessor has
projected that these values will remain somewhat constant through FY2002. The task force found that any
increase in assessed value will not be enough to keep up with inflation.
The following table shows some of the actual data used to develop Chart 1. It is important to focus
on the actual dollar amount of increased tax revenues due to projected increases in assessed values for
FY1998 through FY2002. These increases are minimal at best. In most cases, they are less than the salary
and benefits of one full time employee. Note: this is assuming that the mill rate is kept at 6.75 mills through
FY2002.
Table 1
Fiscal Assessed Mill Tax Levy Difference
Year Value Rate
1988 $428,764,585 4.51 $1,933,728
1989 436,800,264 4.50 1,965,601 $31,873
1990 479,942,347 4.50 2,159,741 194,139
1991 516,304,869 4.50 2,323,372 163,631
1992 559,359,084 5.50 3,076,475 753,103
1993 577,203,640 5.50 3,174,620 98,145
1994 613,078,473 5.50 3,371,932 197,312
1995 634,756,845 6.75 4,284,609 912,677
1996 640,462,576 6.75 4,323,122 38,514
1997 654,134,651 6.75 4,415,409 92,287
1998 667,217,344 6.75 4,503,717 88,308
1999 677,225,604 6.75 4,571,273 67,556
2000 683,997,860 6.75 4,616,986 45,713
2001 690,837,839 6.75 4,663,155 46,170
2002 697,746,217 6.75 4,709,787 46,632
The only option the Kodiak Island Borough has for increasing property tax revenues over the next
five years is to increase the mill rate. As stated earlier, the Borough needed a mill levy of 8.9 mills to have
a balanced budget for FY1997. For comparative purposes, even at 8.9 mills, the Kodiak Island Borough
would have one of the lowest mill rates in the state, as shown in Chart 2. (The percentage next to a
Borough's name indicates that Borough's sales tax in addition to their basic property tax mill rate.)
18.00
16.00
14.00 -
12.00 -
a 10.00 -
5* 8.00 -
6.00 -
4.00 -
2.00
0.00
15.53
Chart 2
Various Mill Rates -Other Alaskan Boroughs
9.22 9.12
7.50
4
Municipality
6.75
6.00 5.46
1!
Severance Taxes. The Kodiak Island Borough levies a severance tax on natural resources that are mined
or harvested from within the Borough. These natural resources include fishing and logging, with mining a
distant third. The severance tax rate is the same as the property tax rate. In FY 1997, the Borough
budgeted severance tax revenue at the rate of $112,000 per mill. The following chart shows the budgeted
components of severance tax in the FY 1997 budget.
130,000,000
125,000,000 —
t
e
$ 120,000,000 —
d
K
w
F
w
`e
e
> 115,000,000 —
d
110,000,000 —
105,000,000
$115,318,519
Chart 3
Severance Tax Composition
Logging
31%
Mining
1%
$117,624,889
$ 1 19,977,387
5
Fish
68%
In FY 1997, the total value of severed resources was budgeted at $115,318,519. The task force
assumed the value of severed natural resources would increase at 2 percent per year over the next five years.
If this increase is realized, the total value of severed resources will be $127,320,963 per year by FY2002, as
shown in Chart 4.
Chart 4
Value of Severed Resources - Next Five Years
$122,376,934
$124,824,473
$127,320,963
1997 1998 1999 2000 2001 2002
Fiscal Year
Sales Tax. It was assumed that revenue generated from a sales tax would be $1.2 million for each percent
of sales tax. It was anticipated that sales tax revenues would grow at a rate of 2 percent per year. This
revenue source would be subject to more extreme fluctuations from year to year as compared to our other
revenue sources. Because of these fluctuations, this would be the most difficult revenue source to predict.
Comparative Borough Per Capita Tax Amounts. The Kodiak Island Borough has the lowest per capita
taxes of all the Boroughs listed in Chart 5. There are several combined city and borough governments in
the State of Alaska, but it is difficult to compare tax rates with these entities because of the variation of
services provided. Therefore, only boroughs which were not combined with cities were used in the
analysis.
The following chart shows that the Fairbanks North Star Borough has the highest per capita tax
amount at $1,221 with the Kenai Peninsula Borough following at $1,019. The per capita taxes of these
boroughs are more than double that of the Kodiak Island Borough.
The Kodiak Island Borough could triple local taxes and still tax less than other boroughs. While
the levels of services provided by other boroughs may vary, Chart 5 still shows a dramatic difference in
local taxing.
Educational Endowment Fund. The Kodiak Island Borough established an Educational Endowment
Fund as a nonexpendable trust fund, which means the earnings of the fund, but not the corpus, may be spent
on education. The anticipated source of funds for the Educational Endowment Fund is 1 percent of an area -
wide sales tax. Other monies can be appropriated into this fund by the Borough Assembly. Once a balance
of $25 million is reached, the 1 percent sales tax would be rescinded.
6
1
Chart 5
Per Capita BoroughTaxes - Various Alaskan Boroughs
01.400
$1221
$1.200
—
01619
$1.000
—
$800
—
$760
0742
$600
—
$403
$400
—
$200
—
0-
Fairbanks
Kenai
Mat -Su
Ketchikan
Kodiak
services provided. Therefore, only boroughs which were not combined with cities were used in the
analysis.
The following chart shows that the Fairbanks North Star Borough has the highest per capita tax
amount at $1,221 with the Kenai Peninsula Borough following at $1,019. The per capita taxes of these
boroughs are more than double that of the Kodiak Island Borough.
The Kodiak Island Borough could triple local taxes and still tax less than other boroughs. While
the levels of services provided by other boroughs may vary, Chart 5 still shows a dramatic difference in
local taxing.
Educational Endowment Fund. The Kodiak Island Borough established an Educational Endowment
Fund as a nonexpendable trust fund, which means the earnings of the fund, but not the corpus, may be spent
on education. The anticipated source of funds for the Educational Endowment Fund is 1 percent of an area -
wide sales tax. Other monies can be appropriated into this fund by the Borough Assembly. Once a balance
of $25 million is reached, the 1 percent sales tax would be rescinded.
6
1
Student Population. The next assumption was the increase in student population at a rate of 2 percent per
year over the next five years. This was based on student enrollment figures over the past 15 years with no
known factors changing this estimate. The FY1997 estimate is 2,834 students. By FY2002, we expect to
have 3,127 students, if our student population continues to grow at the current rate.
Chart 6
Actual and Projected Student Total
Federal
State
Total
Federal and State Funding. The task force assumed federal funding of KIBSD would decline and state
funding would not keep pace with increases in expenditures. At the present time, the State of Alaska is
reviewing the current foundation formula for state school district support. The state has devised several
new formulas for educational funding, but it is unknown whether or not the current formula will be
replaced. Based on the assumption that the current formula will remain and the student population will
increase as shown in Chart 6, the following table was developed to show the predictions for federal and
state school district support for the next five years.
Fiscal Year 1998
$21,595,171
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Fiscal Year 1998
$1,948,536
13,830,538
$15,779,074
Fiscal Year 1999
$1,845,981
14,195,418
$16,041,399
Fiscal Year 2000
$1,743,427
14,581,920
$16,325,347
KIBSD Expenditures. The task force assumed that beginning in FY1998, KIBSD expenditures would
increase $726,288 per year through FY2002, or approximately 3.4 percent. This estimate was based on an
analysis of past KIBSD budgets.
Fiscal Year 1999 Fiscal Year 2000
$22,321,459 $23,047,747
This level of expenditures would maintain the current (FY1997) KIBSD educational program. No
major cuts would be made, nor would it allow for any major expansion of services. Should cuts be
necessary, existing class size, electives and exploratory programs, extra - curricular activities (to include
travel on and off island), staff development, supplies (to include textbooks), equipment, technology, library
aides, specialists such as music teachers, teacher aides, alternative education programs, etc. could be
affected.
7
Fiscal Year
Fiscal Year 2001
$1,640,872
14,975,865
$16,616,737
Fiscal Year 2002
$1,538,318
15,377,400
$16,915,718
Fiscal Year 2001 Fiscal Year 2002
$23,774,036 $24,500,324
25,000,000 -
20,000.000 -
r.
. 0 15,000,000 -
L
10,000,000 -
5,003,000 -
21,3)5,171
Chart
IUD Trial apendatns adlbwThey Be And
7) 371,459
23,047,747
FY FY FY FY FY
1996 1999 2700 2`.10 2002
Racal Year
Financial Models
The task force developed three basic financial models from this data. One is filling the fiscal gap
strictly with increased property tax revenue. The next is using a Borough sales tax to diversify Borough
sources of revenue. The last model includes deposits to and earnings from a trust fund.
These models were built around the General Fund of the Kodiak Island Borough and included the revenues
and expenditures of the Kodiak Island Borough School District. This way, we looked at these two funds as
one and saw how declining federal and state school district revenues affected these two organizations (see
Chart 7).
8
23,714,036
24,501,374
This model does not include a sales tax and shows that the mill rate would have to be set at 10.5
mills to balance the Borough budget, which includes the KIBSD, from FY1988 to FY2002.
Revenues
Property Taxes
Severance Taxes
Sales Tax
Penalties & Interest
PILT
National Wildlife Refuge
State Revenues
KIBSD Federal
KIBSD State
Fees
Interest
Use of Fund Balance KIB
Use of Fund Balance - KIBSD
Other
enditures
KIBSD Expenses
Fixed Costs
Debt Service
Subtotal
Personnel Services
Contract Service s
Non- Profits
Education Endowment
Support Services
Subtotal
Total
Financial Model One
Budget Balanced Through Increased Property Taxes
FY1997
$ 5,340,560
756,000
160,000
427,660
230,000
1,720,280
2,051,090
13,707,704
60,300
445,000
918,200
718,859
52,220
$ 26,587,873 $
$ 21,387,683
621,110
944,280
22,953,073
1,614,770
575,850
397,600
200,000
90,580
2,878,800
FYI998
$ 6,333,545
1,116,552
160,000
430,000
280,000
1,400,000
1,948,536
13,830,538
60,300
400,000
26,009,471 $ 26,710,339 $ 27,422,747
$ 21,595,171
720,000
944,280
23,259,451
50,000 50,000 50,000
1,680,000
576,000
397,600
96,420
2,750,020
9
FY1999 FY2000
$ 6,697,169 $ 7,092,458
1,186,471 1,268,942
160,000
445,000
320,000
1,350,000
1,845,981
14,195,418
60,300
400,000
$ 22,321,459
730,000
844,280
23,895,739
1,745,000
576,000
397,600
96,000
2,814,600
160,000
445,000
320,000
1,300,000
1,743,427
14,581,920
61,000
400,000
1,814,000 !,
580,000
397,600
99,120
2,890,720
FY2001
$ 7,400,513
1,337,166
160,000
445,000
320,000
1,250,000
1,640,872 1,538,318
14,975,865 15,377,400
61,500 61,500
400,000 400,000
50,000
$ 28,040,916
$ 23,047,747 $ 23,774,036 $ 24,500,324
740,000 750,000 760,000
744,280 544,280 544,280
24,532,027 25,068,316 25,804,604
1,885,000
585,000
397,600
105,000
2,972,600
$ 25,831,873 $ 26,009,471 $ 26,710,339 $ 27,422,747 $ 28,040,916 $ 28,812,204
Sales Tax Percent 0% 0%
Mill Rate 6.75 9.49 9.89
0 %, _._ 0%
FY2002
$ 7,788,739
1,421,247
160,000
445,000
320,000
1,250,000
50,000
$ 28,812,204
1,910,000
590,000
397,600
110,000
3,007,600
10.37 10.71 11.16
We arrived at 10.5 mills by averaging the mill rates from FY1998 to FY2002. Because of the
small change in assessed value each year (see Chart 1 on page 3), it was financially correct to use an
average mill rate for the next five years. There would be a slight surplus in FY1998 and FY1999, with
deficits in FY2001 and FY2002. This surplus would have to be carefully hoarded so that it would remain
available to fund the deficits anticipated in FY2001 and FY2002.
There are two important advantages to balancing the budget completely on a property tax basis:
the system for assessing and collecting property taxes is in place and operating efficiently, and local
property taxes are deductible from federal income taxes. This means that for most home owners in the
Kodiak Island Borough, the federal government would subsidize 28 percent of any property tax increase.
0%
Financial Model Two
Budget Balanced Through a Property Tax Mill Rate Increase and a Sales Tax
This model includes a 1 percent sales tax intended to keep property taxes from rising quickly. This
would keep the mill rate down to about 9.0 mills for FY1998 through FY2002.
Revenues
Property Taxes
Severance Taxes
Sales Tax
Penalties & Interest
PILT
National Wildlife Refuge
State Revenues
KIBSD Federal
KIBSD State
Fees
Interest
Use of Fund Balance - KIB
Use of Fund Balance - KIBSD
Education Endowment
Other
Expenditures
KIBSD Expenses
Fixed Costs
Debt Service
Subtotal
Total
FY1997 FY1998 FY1999
$ 5,340,560 $ 5,313,390 $ 5,657,378 $
756,000 936,707 1,002,262
1,200,000 1,224,000
160,000 160,000 160,000
427,660 430,000 445,000
230,000 280,000 320,000
1,720,280 1,400,000 1,350,000
2,051,090 1,948,536 1,845,981
13,707,704 13,830,538 14,195,418
60,300 60,300 60,300
445,000 400,000 400,000
918,200
718,859
52,220 50,000 50,000 50,000 50,000 50,000
$ 26,587,873 $ 26,009,471 $ 26,710,339 $ 27,422,747 $ 28,040,916 $ 28,812,204
$ 21,387,683
621,110
944,280
22,953,073
Personnel Sery ices 1,614,770
Contract Sery ices 575,850
Non- Profits 397,600
Education Endowment 200,000
Support Services 90,580
Subtotal 2,878,800
$ 21,595,171
720,000
944,280
23,259,451
1,680,000
576,000
397,600
96,420
2,750,020
Sales Tax Percent 1%
Mill Rate 6.75 7.96
10
FY2000
6,033,450
1,079,470
1,248,480
160,000
445,000
320,000
1,300,000
1,743,427
14,581,920
61,000
400,000
$ 22,321,459 $ 23,047,747 $ 23,774,036 $ 24,500,324
730,000 740,000 750,000 760,000
844,280 744,280 544,280 544,280
23,895,739 24,532,027 25,068,316 25,804,604
1,745,000 1,814,000
576,000 580,000
397,600 397,600
96,000 99,120
2,814,600 2,890,720
I%
8.35
FY2001
$ 6,321,945
1,142,285
1,273,450
160,000
445,000
320,000
1,250,000
1,640,872
14,975,865
61,500
400,000
FY2002
$ 6,690,264
1,220,803
1,298,919
160,000
445,000
320,000
1,250,000
1,538,318
15,377,400
61,500
400,000
1,885,000 1,910,000
585,000 590,000
397,600 397,600
105,000 110,000
2,972,600 3,007,600
$ 25,831,873 $ 26,009,471 $ 26,710,339 $ 27,422,747 $ 28,040,916 $ 28,812,204
1% 1%
8.82 9.15 9.59
As in Model One, the mill rates were averaged from FY1998 to FY2002 to reach 9.0 mills. Again,
as in Model One, there would be a slight surplus in FY1998 and FY1999 with deficits in FY2001 and
FY2002.
The Borough may have two options in implementing a sales tax. The Kodiak Island Borough
could adopt a sales tax on an area -wide basis with a vote of its citizens. We would need to obtain a legal
opinion, however, to determine if the Borough could adopt a sales tax on a non - area -wide basis.
If the Kodiak Island Borough adopted a sales tax on an area -wide basis, the Borough sales tax
would then become the base sales tax and sales taxes from other communities would be added to this base.
If the Kodiak Island Borough adopted an area -wide sales tax, we would be responsible for collecting the
sales tax for cities and villages within our Borough who have levied their own sales taxes.
There are several advantages to a sales tax. One positive attribute is that most people have the
funds available to pay a sales tax when it is due. A sales tax is levied in small increments over the course of
a year instead of in one or two large installments. A sales tax would diversify the Borough's revenue base.
Off island visitors would also pay a sales tax, therefore contributing to our local government revenues.
It may be possible for the Kodiak Island Borough to adopt a sales tax on a non - area -wide basis. In
this case, our sales tax would only apply to areas outside of cities with their own sales tax. The advantage
to this is there could be a "constant" mill rate across the Kodiak Island Borough. If the Kodiak Island
Borough levied a 6 percent sales tax, then there would be a 6 percent sales tax everywhere in the Borough
except for the villages of Old Harbor, Larsen Bay, and Ouzinkie.
This model includes a 2 percent sales tax with 1 percent of this sales tax intended to keep the
property tax mill rate from rising and the other 1 percent to help fund the Educational Endowment Fund.
This would keep the mill rate down to about 8.8 mills for FY1998 through FY2002, while adding
approximately $1,200,000 to the Educational Endowment Fund each year.
Revenues FY1997 FY1998 FYI999 FY2000 FY2001 FY2002
Property Taxes $ 5,340,560 $ 5,313,390 $ 5,605,389 $ 5,929,159 $ 6,173,683 $ 6,489,135
Severance Taxes 756,000 936,707 993,051 1,060,811 1,115,496 1,184,102
Sales Tax 2,400,000 2,448,000 2,496,960 2,546,899 2,597,837
Penalties & Interest 160,000 160,000 160,000 160,000 160,000 160,000
PILT 427,660 430, 000 445,000 445,000 445,000 445,000
National Wildlife Refuge 230,000 280,000 320,000 320,000 320,000 320,000
State Revenues 1,720,280 1,400,000 1,350,000 1,300,000 1,250,000 1,250,000
KIBSD Federal 2,051,090 1,948,536 1,845,981 1,743,427 1,640,872 1,538,318
'KIBSD State 13,707,704 13,830,538 14,195,418 14,581,920 14,975,865 15377,400
Fees 60,300 60,300 60,300 61,000 61,500 61,500
Interest 445,000 400,000 400,000 400,000 400,000 400,000
Use of Fund Balance - KIB 918,200
Use of Fund Balance - KIBSD 718,859
Education Endowment 61,200 122,950 175,050 237,830
Other 52,220 50,000 50,000 50,000 50,000 50,000
$ 26,587,873 $ 27,209,471 $ 27,934,339 $ 28,671,227 $ 29,314,366 $ 30,111,123
Expenditures_
KIBSD Expenses $ 21,387,683 $ 21,595,171 $ 22,321,459 $ 23,047,747 $ 23,774,036 $ 24,500,324
' Fixed Costs 621,110 720,000 730,000 740,000; 750,000 760,000
Debt Service 944,280 944,280 844,280 744,280 544,280 544,280
Subtotal 22,953,073 23,259,451 23,895,739 24,532,027 '', 25,068,316 25,804,604
Personnel Services 1,614,770 1,680,000 1,745,000 1,814,000 ,' 1,885,000 1,910,000
'Contract Services 575,850 576,000 576,000 580,000 585,000 590,000
Non- Profits 397,600 397,600 397,600 397,600 397,600 397,600
'Education Endowment 200,000 1,200,000 1,224,000 1,248,480 1,273,450 1,298,919
Support Services 90,580 96,420 96,000 99,120 105,000 110,000
Subtotal 2,878,800 3,950,020 4,038,600 4,139,200 4,246,050 4,306,519
Total $ 25,831,873 $ 27,209,471 $ 27,934,339 $ 28,671,227 ! $ 29,314,366 $ 30,111,123
Sales Tax Percent
Mill Rate
Financial Model Three
Locally Funded Educational Endowment Fund
2% 2% 2% 2% 2%
6.75 7.96 8.28 8.67 8.94 9.30
This is the most forward looking of the three models. By FY2012, the Kodiak Island Borough
should achieve its goal of $25 million in the Educational Endowment Fund. This assumes an interest rate of
6 percent. Once the Endowment Fund is funded, it will be a non -tax revenue source for the Kodiak Island
Borough, and the sales tax rate would revert to 1 percent.
Analysis
Expenditures are going to continue to outpace revenues received for the Kodiak Island Borough
School District. Federal and state funding of our educational system will decline on a percentage of total
revenue basis. Likewise, increases in assessed value within the Kodiak Island Borough will not keep up
with school district expenditures. In FY1997, a mill rate of 8.9 mills was needed to balance the budget
without using the fund balance. It was set at 6.75 mills leaving a deficit of 2.15 mills. In order to obtain a
balanced budget for FY1998 through FY2002, the mill rate needs to be set at 10.5 mills, or the Borough
needs to adopt a sales tax of some percentage and reduce the mill rate accordingly.
A Borough -wide sales tax would have several positive attributes in contrast to raising the property
tax mill rate. First, visitors from outside of the Borough would help pay for the cost of education in Kodiak,
11
not unlike our residents paying sales tax on purchases made outside of our Borough which go to support
other governments and school districts.
Many people favor a sales tax because it is usually levied in small increments, and the consumer
usually has the money to pay the sales tax when it is due.
Also, not to be ignored in this analysis is the impact of an Educational Endowment Fund. This
fund may keep local mill rates stable by filling in the gap between rising costs of education with leveling
and declining federal, state, and local revenues. Once the Educational Endowment Fund has been fully
funded, it will be a non -tax revenue source for the Kodiak Island Borough School District.
A comparison of taxes shows conclusively that the Kodiak Island Borough has one of the best
records in the State of Alaska for maintaining a low tax rate.
There is a need to increase our local revenues in order to maintain our educational system at its
current level
Recommended Financing Model for Next Five Years
The task force recommends that Financial Model Three be adopted by the Kodiak Island Borough.
This would require establishing a sales tax, raising the mill rate to 8.8 mills, and moving local revenues into
the Educational Endowment Fund. This would help to diversify the Borough's revenue base and would
tend to stabilize tax rates over the next five years.
It is further recommended that this sales tax be a 2 percent area -wide sales tax. The task force
recommends that 1 percent of the sales tax goes to KIBSD operations and 1 percent goes to the Educational
Endowment Fund until the Endowment Fund reaches its goal of $25 million dollars. It is understood that a
sales tax can only be adopted by a vote of the people. Therefore, the Kodiak Island Borough Assembly
should begin work immediately on a sales tax proposal to be voted on in the November, 1997 election to be
effective on January 1, 1998.
It should be noted that after raising the mill rate to 8.8 mills in FY1998, it appears likely that the
same mill rate could be maintained through the year 2002.
If the Kodiak Island Borough adopts a 2 percent sales tax and increases the mill rate to 8.8 mills,
the per capita tax for the Kodiak Island Borough would increase to $661, still one of the lowest rates in the
state.
The task force also recommends that any surplus revenues be deposited into the Educational
Endowment Fund.
The task force recommends that maintenance of KIBSD's infrastructure be closely monitored to
ensure that maintenance monies are not moved to operations.
With a 2 percent area -wide sales tax and a property tax rate of 8.8 mills, the Kodiak Island
Borough should maintain its current level of FY 1997 services through FY2002 without any significant
changes. We feel that by adopting a financing plan that would be stable over the next five years, the
citizens of our community would be better served than if we adopt a new plan and a new revenue structure
each and every year.
12
Other Recommendations
Both MB and KIBSD
Both the Kodiak Island Borough and the Kodiak Island Borough School District should recognize
the need to continue examining ways to reduce costs wherever possible while maintaining the current
program.
KIBSD
KIBSD should continue its strategic planning process to ensure an ongoing emphasis on
improvement in the quality of education. This plan should be included in a public information program.
KIBSD should continue to assess student performance and incorporate this and actual financial
information in an annual report to the public.
The KIBSD should continue to address the issue of teacher accountability. This includes an
evaluation of teachers where student performance is a major indicator.
KIBSD should maintain balance between personnel and non - personnel expenditures.
Kodiak Island Borough
The Kodiak Island Borough should review this report annually and use this report in the
formulation of the Borough budget in relation to School District expenditures for the next several years.
The Kodiak Island Borough should explore participating in a cooperative effort to establish
COLA's for Borough, School District (both certified and non certified), and Hospital employees. The goal
of this process is to give the same COLA to all public employees within the Kodiak Island Borough.
Capital Needs Appendix
The Kodiak Island Borough must continue to provide adequate educational facilities to our
children. As shown in Chart 6, the Kodiak Island Borough will have 3,127 students by FY2002. This is a
13 percent increase over the FY1996 student count of 2,804.
The Kodiak Island Borough has a school capital improvements plan for FY1998- FY2002. For a
complete copy, please see the Engineering/Facilities Department of the Kodiak Island Borough.
Highlighted in this plan are the following six projects. These have been selected and ranked in
order of importance.
B -1 Peterson Addition
B -2 Kodiak High School Code Upgrade
B -3 New Middle School
B -4 Kodiak High School Career Technology Upgrade
B -5 Chiniak School Addition
B -6 Kodiak Student Activity Center
$ 910,000
$ 2,500,000
$18,500,000
$ 5,500,000
$ 600,000
$ 3,800,000
On February 27, 1996, the School District Facilities Review Committee presented a school district facilities
review to the Kodiak Island Borough Assembly. For a copy, please contact the KIBSD business office.
14
, ictme> Sp?,1\av, e
TOY SULLY cJ W t .)
KEG U 4 ke_
O af() I ( Thoe- Lidi CA__f
El / // e064a4_
. .04,(' 44
5p F
KODIAK ISLAND BOROUGH
ASSEMBLY WORK SESSION
Work Session of:14Q1 (91, ac(
Please PRINT your name
Please PRINT your name