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2013-04-11 Work Session Kodiak Island Borough Assembly Work Session Thursday, April 11, 2013, 7:30 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) ITEMS FOR DISCUSSION 1. KIB Professional Legal Services 2. Revenue Projections PACKET REVIEW PUBLIC HEARING — None. UNFINISHED BUSINESS — None. NEW BUSINESS CONTRACTS Contract No. FY2013 -25 Karluk School Oil Tank Procurement. Contract No. FY2013 -26 Landfill Lateral Expansion Phase III Leachate Treatment Plant Metal Building Procurement. RESOLUTIONS Resolution No. FY2013 -29 Accepting the Recommendation of the Planning and Zoning Commission Recommending the Disposal of Certain Borough Land as Surplus to the Public's Need to be Sold at a Future Land Sale (P &Z Case 13 -019, Chiniak). Resolution No. FY2013 -30 Accepting the Recommendation of the Planning and Zoning Commission Approving the Disposal By Lease of Certain Borough Land as Surplus to the Public's Need (P &Z Case 13 -022, Pillar Creek). ORDINANCES FOR INTRODUCTION Ordinance No. FY2013 -15 A Rezone According to KIBC 17.205.0 to Rezone Proposed Lots 5B and 5C, Block 1, Chiniak Alaska Subdivision From PL- Public Use Zoning District To RR2- Rural Residential Two Zoning District (P &Z Case 13 -018, Chiniak). OTHER ITEMS *Confirmation of the Assembly Appointment to the Service Area No.1 Board (Curtis Howell). Approval of the Vacation of a 20 -Foot Wide Utility Easement in Accordance With KIBC16.60.060, Along the Lot Line Common to Lots 8 and 21, Block 1, Russian Creek Alaska Subdivision (P &Z Case S13 -013, Cossette). MANAGER'S COMMENTS CLERK'S COMMENTS MAYOR'S COMMENTS ASSEMBLY MEMBERS COMMENTS Contract #FY2010 -40 Contract for Professional Legal Services In consideration of the mutual promises herein, the KODIAK ISLAND BOROUGH and the law offices of WOFILFORTH, JOHNSON, BRECHT, CARTLEDGE & BROOKING (firm) agree as follows: A. Part I, consisting of 14 sections of Special Provisions; B. Part I1, consisting of 11 sections of General Provisions. Part 1 Special Provisions Section 1. Definitions. In this contract: A. "Manager" means the Manager of the Kodiak Island Borough. B. "Borough" means the Kodiak Island Borough. C. "Assembly" means the Kodiak Island Borough Assembly. Section 2. Scope of Services. A. The Borough Attorney shall act as legal advisor to the Borough Assembly, administration, and other officials of the Borough to include without limitation the following: (1) To duly advise the Assembly, administration, and other officials at meetings of the Assembly and at other functions as may be designated; (2) To draft opinion letters regarding, among other subjects, the interpretation of the Borough codes, state and federal laws, and policies; (3) To draft municipal ordinances involving all municipal matters; (4) To review and provide opinions on codes, contracts, resolutions, and other written instructions which are submitted to the attorney by the Borough; (5) To call attention of the Assembly and /or Manager, as may be appropriate, to or of changes or developments in legal matters that affect the Borough; and (6) To perform other such duties as may be prescribed for the Borough Attorney by ordinance or by direction of the Assembly and /or Manager. Contract for Professional Legal Services Wohlforth, Johnson, Brecht, Cartledge & Brooking Page 1 of 10 B. The Borough Attorney shall represent the Borough as attorney in civil and criminal proceedings affecting the Borough; however, the Borough Assembly may hire independent counsel when in its judgment independent counsel is needed. The attorney will represent the Borough in litigation involving prosecution of municipal code violation when needed. Firms must be qualified to represent the Borough in all State of Alaska Courts, U.S. District Court, and before the Ninth Circuit Court of Appeals. C. The Borough Attorney must work effectively with the Borough Assembly, administration, boards and commissions, and also with other public agencies with which the Borough has legal relations. D. The Borough Attorney must be experienced and proficient in legal matters affecting the Borough, to include without limitation, federal and state constitutional law, federal and state non - constitutional law, Alaska Statute 29, and Borough Code. E. All representation of the Borough shall continue until the matters or cases assigned are either closed out by mutual consent or are recalled by the Borough Assembly. F. The firm shall not engage any consultant, expert, or service without the prior approval of the Manager or Assembly. G. The firm shall: (1) Provide the Borough with copies of any significant pleading and /or correspondence prior to filing /sending them. (2) Obtain the Borough Manager's approval of all expenses exceeding $2,000. Section 3. Access to Municipal Personnel. The Manager shall secure the cooperation of the Borough personnel as necessary to assist the firm's performance hereunder. Section 4. Contract Administrator. The Borough shall: A. Receive all information and notices the firm is required to communicate to the Borough pursuant to this agreement. B. The Manager shall administer the contract on behalf of the Borough. Section 5. Term. A. For purposes of case assignments, this contract becomes effective on July 1, 2010, when signed on behalf of the Borough, and shall continue for three years from date executed. The contract may be renewed for up to three additional one -year extensions at the Borough Assembly's option. Contract for Professional Legal Services Wohlforth, Johnson, Brecht, Cartledge & Brooking Page 2 of 10 B. For purpose of assigned case completion this contract may be extended upon mutual consent, Section 6. Compensation. A. The firm shall be compensated at the hourly rates enumerated in Attachment "A ". The attorney's fee schedule is to remain fixed for the first three years of the contract with three, one -year extensions at the Assembly's option. If the Assembly opts to extend the contract, the fee schedule may be negotiated. The firm will also be reimbursed for other appropriate costs incurred to perform under this contract. B. The firm shall be entitled to no compensation under this contract beyond the scope of the Borough's express obligations under subsection A. The Borough understands that instances may arise that require additional services. During these times the firm will give the Assembly an estimate of services requested and will return to the Assembly prior to exceeding the estimate. C. As a condition of payment, the firm shall have paid all municipal taxes currently due and owing by the firm. Section 7. Payment and Reporting. A. The firm shall submit itemized monthly billings to the Borough Manager for payment of all fees and costs for which the firm seeks reimbursement under Section 6. Said monthly billings shall identify the subject of the work performed and the time, to the nearest one -tenth of an hour, spent on each subject. Costs shall be itemized and described separately on each monthly invoice. B. Upon approved billing, payment will be remitted to the firm within 30 days. Section 8. Termination of the Firm's Services. The firm's services under Section 2 may be terminated: A. For convenience by the Borough Assembly. B. By mutual consent of the parties. C. For cause, by either party where the other party fails in any material way to perform its obligations under this contract. Termination under this subsection is subject to the condition that the terminating party notifies the other party of its intent to terminate, stating with reasonable specificity the grounds therefore, and the other party fails to cure the default within fifteen days after receiving the notice. Section 9. Duties Upon Termination. A. If the firm's services are terminated for the convenience of the Borough or by mutual consent of the parties, the firm will be paid as provided for under Section 6. Total compensation will not exceed the amount stated in Section 6. All finished Contract for Professional Legal Services Wohlforlh, Johnson, Brecht, Cartledge & Brooking Page 3 of 10 and unfinished documents, work product, and materials prepared by the firm remain the property of the Borough. B. If the firm's services are terminated for cause, the Borough shall pay the fimm the reasonable value of the services satisfactorily rendered prior to termination, less any damages suffered by the Borough because of the firm's failure to perform satisfactorily. The reasonable value of the services rendered shall not exceed the contract rate for such services, and payment under this section shall not exceed ninety percent of the total compensation allowable under Section 6. Any finished or unfinished documents, work product, or materials prepared by the firm under this contract shall become the property of the Borough. C. The firm shall not be entitled to any compensation under this section until the firm has delivered to the Borough Manager all documents, records, work product, and materials relating to this contract. D. if the firm's services are terminated, for whatever reason, the firm shall not claim any compensation, under this contract, other than that allowed under this section. E. Except as provided in this section, termination of the firm's services under Section 8 does not affect any other right or obligation of a party under this contract. Section 10. Case Management. A. Execution of the contract by the Borough shall act as full authority for the firm to proceed with the representation of the Borough as provided hereunder. B. The Borough will have complete and total access to all material, information and files worked on by the firm pursuant to this contract. C. Copies of all legal opinions shall be provided to the Borough Clerk's office. Section 11. Assignments. Unless otherwise allowed by the Manager or as directed by the Borough Assembly, any assignment by the firm of its interest in any part of this contract or any delegation of duties under this contract shall be void, and any attempt by the firm to assign any part of its interest or delegate duties under this contract shall give the Borough the right to immediately terminate this contract without any liability for work performed. Section 12. Ownership; Publication, Reproduction and Use of Material. A. The firm agrees to discuss matters and reveal documents relating to this contract only with the Borough Assembly, Manager, Borough Clerk, or any person authorized by the aforementioned, and as required by court order. B. Except as otherwise provided herein, all data, documents, work product, research, reports, and materials produced by the firm under this contract shall be the property of the Borough, which shall retain exclusive right to publish, disclose, Contract for Professional Legal Services Wohlforth, Johnson, Brecht, Cartledge & Brooking Page 4 of 10 distribute, copy, and otherwise use, in whole or in part, any such data, documents, research, reports, or other materials. Section 13. Notices. Any notice required pertaining to the subject matter of this contract shall be either personally delivered, faxed, or mailed by prepaid first class registered or certified mail, return receipt requested to the following address: Borough: Kodiak Island Borough Attention: Manager's Office 710 Mill Bay Road Kodiak, AK 99615 FAX: (907) 486 -9374 Firm: Wohlforth, Johnson, Brecht Cartledge & Brooking Attention: Cheryl Brooking 900 West Fifth Avenue, Suite 600 Anchorage, AK 99501 FAX: (907) 276 -5093 Section 14. Conflict of Interest. The firm may not represent or assist private or public clients in connection with other claims, litigation, or other legal matters where such representation would constitute or appear to constitute a conflict of interest. In particular, the firm shall comply with all relevant provisions of the Alaska Bar Rules and the Alaska Rules of Professional Conduct concerning the prohibition of conflicts of interest among clients. The firm shall not accept any employment and shall not render any professional services to other parties if such action might be inconsistent with the above - referenced standards unless the prior approval of the Assembly has been first obtained. Part II General Contract Provisions Section 1. Relationship of Parties. The firm shall perform its obligations hereunder as an independent firm of the Borough. The Borough may administer the contract and monitor the firm's compliance with its obligations hereunder. Section 2. Nondiscrimination. A. The firm will not discriminate against any employee or applicant for employment because of race, color, religion, national origin, ancestry, age, sex, or marital Contract for Professional Legal Services Wohlforth, Johnson, Brecht, Cartledge & Brooking Page 5 of 10 status, or mental or physical disability. The firm will take affirmative action to ensure that applicants are employed and that employees are treated during employment without regard to their race, color, religion, or mental or physical disability. Such action shall include, without limitation, employment, upgrading, demotion, or transfer, recruitment or recruiting advertising, layoff or termination, rates of pay or other forms of compensation, and selection for training including apprenticeship. The firm agrees to post in conspicuous places, available to employees and applicants for employment, notices setting forth the provisions of this nondiscrimination clause. B. The firm shall state, in all solicitations or advertisements for employees to work on contact jobs, that all qualified applicants will receive consideration for employment without regard to race, color, religion, national origin, ancestry, age, sex, or marital status, or mental or physical disability. C. The firm shall comply with any and all reporting requirements that may apply to it which the Kodiak Island Borough may establish. D. The firm shall include the provisions of subsections A through C of this section in every subcontract or purchase order under this contract, so as to be binding upon every such independent counsel or firm of the firm under this contract. Section 3. Permits, Laws and Taxes. The firm shall acquire and maintain in good standing all permits, licenses, and other entitlements necessary to its performance under this contract. All actions taken by the firm under this contract shall comply with all applicable law to include without limitation, statutes, ordinances, rules, and regulations. Section 4. Nonwaiver. The failure of either party at any time to enforce a provision of this contract shall in no way constitute a waiver of the provision, nor in any way effect the validity of this contract or any part hereof, or the right of such party thereafter to enforce each and every provision hereof. Section 5. Amendment. A. This contract may be amended, modified, or changed only in writing as approved by the Borough Assembly and executed by the Borough Manager and an authorized representative of the firm. B. For the purpose of any amendment, modification, or change to the terms and conditions of this contract, the only authorized representatives of the parties are: (1) Kodiak Island Borough Manager (2) Cheryl Brooking C. Any attempt to amend, modify, or change this contract by either an unauthorized representative or unauthorized means shall be void. Contract for Professional Legal Services W ohlforth, Johnson, Brecht, Cartledge & Brooking Page 6 of 10 Section 6. Jurisdiction; Choice of Law. Any civil action rising from this contract shall be brought in the Superior Court for the Third Judicial District of the State of Alaska, at Kodiak. The laws of the State of Alaska shall govern the rights and obligations of the parties under this contract. Section 7. Severability. Any provision of this contract decreed invalid by a court of competent jurisdiction shall not invalidate the remaining provisions of the contract. Section 8. Integration. This instrument and Attachment A hereto embody the entire agreement of the parties. There are no promises, terms, conditions, or obligations other than those contained herein; and this contract shall supersede all previous communications, representations, or agreements, either oral or written, between the parties hereto. Section 9. Insurance and Indemnification. A. The firm shall maintain in good standing the insurance described in Subsection B of this section. Before rendering any services under this contract, the firm shall furnish the Borough Manager with proof of insurance in accordance with Subsection B of this section. B. The firm shall provide the following types of insurance. The Kodiak Island Borough shall be insured as additional insured on all insurance policies except Professional Liability and Worker's Compensation policies. All policies shall have a thirty day notice of cancellation clause. (1) Workers' Compensation $100,000 Employer's Liability and Workers' Compensation as required by Alaska State Workers' Compensation Statues. (2) Commercial Automobile Liability Bodily Injury and Property Damage, including all owned, hired and non -owned automobiles. $1,000,000 Each Occurrence and Aggregate $1,000,000 (3) Professional Liability Agree to provide lawyer's professional liability insurance for all periods under the contract and provide an extended reporting period endorsement after the end of the contract for three years. Without request by the Borough, the firm shall provide proof of such insurance during the contract period and proof of such endorsement after the end of the contract. The firms' carrier must agree to notify the Borough thirty days before cancellation of insurance or of the extended reporting period endorsement. The insurance shall provide coverage for claims up to a minimum amount of $1,000,000 per claim. Contract for Professional Legal Services Wohlforth, Johnson, Brecht, Cartledge & Brooking Page 7 of 10 C. To the fullest extent permitted by law the firm agrees to defend indemnify and hold harmless the Kodiak Island Borough, its elected and appointed officials, employees, and volunteers against any and all liabilities, claims, demands, lawsuits, or losses including costs and attorney fees, and appellate attorney's fees, incurred in defense thereof arising out of or in any way connected or associated with this contract. Section 10. Inspection and Retention of Records. The firm shall at any time during normal business hours and as often as the Manager or Assembly may deem necessary, make available to the Borough for examination all records with respect to all matters covered by this contract for a period ending three years after the date of the firm is to complete performance in accordance with Section 2 of the Special Provisions. Upon request, and within a reasonable time, the firm shall submit such other information and reports relating to its activities under this contract to the Borough in such a form and at such times as the Borough Assembly may reasonably require. The firm shall permit the Borough Assembly or their designee to audit, examine, and make copies of such records, and to make audits of all research, materials, pleadings, records of personnel, and other data relating to all matters covered by this contract. The Borough may, at its option, permit the firm to submit its records to the Borough in lieu of the retention requirements of this section. Section 11. Availability of Funds. This contract is subject to the availability of funds lawfully appropriated for its perform \y . IN WITNESS WHEREOF, the parties have executed this contract: � OH O o '171 KOD ISLA.pND BOR�O�Ufr ' H N• � a " CP/440/ �1 Rick Gifford, Borough ag- Date 4 ISK,q. i A V ' � Nova Javier, MMC, Borough Cler; I J Ws L` "•RT ,J �i . o N, :`ECHT, CARTLEDGE & BROOKING Name: Ch/ yl Brooking Title: Vice President Date: *fit P-0 � IRS Ta o.92- 0046684 Contract for Professional Legal Services Wohlforth, Johnson, Brecht, Cartledge & Brooking Page 8 of 10 State of Alaska ) ) ss: Third Judicial District ) SUBSCRIBED and SWORN TO before me this day of June, 2010. 414 n Notary Publicnd for Alask / My Commission Expires: /,9 20/3 OFFICIAL SEAL STATE OF ALASKA NOTARY PUBLIC SHIRLEY Na.� /R/t_�ICij� i Comm. expires: ...lse[�L /�/ ..� Contract for Professional Legal Services Wohlforth, Johnson, Brecht, Cartledge & Brooking Page 9 of 10 Attachment "A" Fee Schedule 1. Hourly costs. The firm will charge the following hourly rates for legal services: Attorneys $200 per hour Attorneys with less than five years experience $175 per hour Paralegals $ 95 per hour In addition to the above hourly fees, other charges (e.g. copies and telephone) will be billed to the client at actual cost. 2. Travel costs. The firm will charge the following rates for the cost of traveling between the firm's Anchorage office and the Kodiak Island Borough offices, located at 710 Mill Bay Road, Kodiak, Alaska. 2.1 Cost per hour for travel. Generally, the cost per hour for travel time is the same hourly rate charged for legal services. However, the firm will not charge any fees for travel time for up to four meetings in Kodiak, per year. Thereafter, the fee will be one -half of our normal hourly rate for travel time for each roundtrip. All costs (airfare and expenses) will be charged at actual cost. 2.2 Travel time. We estimate that travel time between Anchorage and Kodiak will be approximately two (2) hours each way. Contract for Professional Legal Services Wohlforth, Johnson, Brecht, Cartledge & Brooking Page 10 of 10 44#4-NAL Kodiak Island Borough P�, OFFICE of the MANAGER e ! 710 Mill Ba}r Road �C Kodiak, Alaska 99615 8th- g Phone (907) 486 -9301 Fax (907) 486 -9374 v� THE KODIAK ISLAND BOROUGH IS SOLICITING PROPOSALS FOR General Counsel Legal Services RELEASE DATE: February 1, 2010 DEADLINE FOR SUBMITTING QUESTIONS: February 12, 2010 @ 5:00 p.m. DEADLINE FOR SUBMISSION AND OPENING DATE & TIME: March 12, 2010 @ 3:00 p.m. Project Abstract: General Counsel legal services are being sought by the Kodiak Island Borough. The actual RFP document consists of 30 pages. For additional information, please contact: Meagan Christiansen, Borough Manager's Office (907) 486-9303 See Part 8, for instructions on submitting proposals. Use this page as the first page of the proposal. See Part 11, Submission Checklist. Company Name Contact Person Address City State Zip Telephone ( ) Fax ( ) Federal Tax ID No. E -Mail Address: I have read, understand, and agree to all terms and conditions herein. Date Signed Print Name & Title Kodiak Island Borough RFP for General Counsel Legal Services Page I TABLE OF CONTENTS 1. Overview of Project 2. Acronyms /Definitions 3. Scope of Services 4. Statement of Qualifications and Requirements 5. Company Background and References 6. Cost 7. Payment 8. Submittal Instructions 9. Proposal Evaluation and Award Process 10. Terms. Conditions and Exceptions 11. Submission Checklist Attachment A Certification of Indemnification and Compliance with terms and condition of RFP primary firm. Attachment B Contract Form Attachment C Reference Questionnaire Kodiak Island Borough RFP for General Counsel Legal Services Page 2 A Request for Proposal process is different from an Invitation to Bid. Firms are expected to propose creative, competitive solutions to the agency's stated problem or need, as specified below. The Borough reserves the right to limit the Scope of Work prior to award, if deemed in the best interest of the Kodiak Island Borough. 1. OVERVIEW OF PROJECT The Kodiak Island Borough (hereinafter referred to as the "Borough ") is seeking proposals for general counsel legal services. It is the intention of the Borough through this solicitation to enter into a contract with a general counsel that will serve the Borough Assembly and Staff in various capacities. The Borough reserves the right to enter into contracts with attorneys other than the general counsel should it be deemed in its best interest. This Request for Proposal (RFP) for general counsel legal services is restricted to the Borough only and proposals with respect to other agencies or projects shall not be submitted. Proposals are invited from any State of Alaska licensed attorney -at -law or law firm. Firms must be qualified to represent the Borough in all State of Alaska Courts, U.S. District Court, and before the Ninth Circuit Court of Appeals. 2. ACRONYMS /DEFINITIONS For the purposes of this RFP, the following acronyms /definitions will be used: AA Alaska Administrative Code Awarded Firm The organization /individual that is awarded and has an approved contract with the Kodiak Island Borough for the services identified in this RFP. Borough The Kodiak Island Borough and any agency identified herein. Borough Staff Any Kodiak Island Borough department head or their designee. Department Any Kodiak Island Borough department including, but not limited to the Manager's Office, Office of the Borough Clerk, Assessing, Finance, Engineering /Facilities, and the Community Development Department. Evaluation Committee The Borough Assembly will evaluate and score proposals submitted in response to the RFP pursuant to Borough Code 3.30.110. Firm The firm /organization /individual submitting a proposal in response to this RFP. Independent Counsel Third party, not directly employed by the firm, who will provide services identified in this RFP. This does not include third parties who provide support or incidental services to the firm. May Indicates something that is not mandatory but permissible. RFP Request for Proposal - a written statement which sets forth the requirements and specifications of a contract to be awarded by competitive selection under Borough Code 3.30.110. Shall/Must Indicates a mandatory requirement. Failure to meet a mandatory requirement may result in the rejection of a proposal as non - responsive. Kodiak Island Borough RFP for General Counsel Legal Services Page 3 Should Indicates something that is recommended but not mandatory. If the firm fails to provide recommended information, the Borough may, at its sole option, ask the firm to provide the information or evaluate the proposal without the information. Will Expected or required. 3. SCOPE OF SERVICES It is the intention of the Kodiak Island Borough to enter into an agreement with a qualified law firm to provide general counsel legal services on behalf of the Borough at a fixed hourly rate. The qualified attorney or firm will provide contract legal services to the Borough and attend Borough meetings deemed necessary by the Assembly and /or Manager. The Fiscal Year 2010 budgeted amount for legal services for the Borough was $128,000. 3.1. SERVICES TO BE PROVIDED - The legal services will include, but not be limited to, the following: 3.1.1. Provide legal counsel per Borough Code 2.65 for the Borough Assembly, Mayor, and the Borough Staff on issues that routinely come up in normal day to day operation of the Borough. The Assembly and /or Manager may find that, from time to time, there exist special circumstances that require outside legal counsel. 3.1.2. Prepare legal documents such as deeds, easements, ordinances, resolutions, and legal opinions as needed. Provide limited representation in court, negotiate on the Borough's behalf and handle other legal matters that may arise. 3.1.3 Be reasonably accessible for consultation by the Borough Assembly, Mayor, and Borough Staff. 3.1.4. To draft opinion letters regarding, among other subjects, the interpretation of the Borough code, state and federal laws, and policies. 3.1.5. To perform other such duties as may be prescribed for the Borough attorney by ordinance or by direction of the Assembly and /or Manager. 3.1.6. The Borough attorney must work effectively with the Mayor, Assembly, and Borough Staff, and also with other public agencies with which the Borough has legal relations. 3.1.7. The Borough attorney will be required to assist with all appeals as provided per Borough Code. 3.1.8. The Borough attorney may be requested to attend meetings as needed. 3.2 MINIMUM QUALIFICATIONS -- The minimum qualifications required to respond to this RFP are as follows: 3.2.1. The Borough Attorney must be a member in good standing of the State of Alaska Bar Association. 3.2.2. The Borough Attorney must have at least five years professional experience as legal counsel for an entity such as a city, municipality, borough, or state government. Kodiak Island Borough RFP for General Counsel Legal Services Page 4 3.2.3. The Borough Attorney must be experienced and proficient in legal matters affecting the Borough, to include without limitation, federal and state constitutional law, federal and state non- constitutional law, Alaska Statute Title 29, and Borough Code. 4. STATEMENT OF QUALIFICATIONS (SOQ) REQUIREMENTS To achieve a uniform review process, and obtain the maximum degree of comparability, the SOQ submitted in response to this RFP must be no more than twenty pages in length (excluding letter of transmittal, resumes, title page(s), index /table of contents, attachments, dividers or other forms, if required). Please provide the name, address, phone number, fax number, website URL for your firm and any other firm or firms that you would team with on this matter, together with the name, address, phone, fax, and email for the person whom the Borough Manger's Office should contact in regard to the RFP. If you propose to team with another firm, please provide the same information requested in this Statement for that firm. Please detail each of the following points in your Proposal: 4.1. Table of Contents (clearly identify the materials by section and page number). 4.2 Letter of Transmittal (Limited to two pages). 4.2.1. Briefly state your firm's understanding of the services to be performed and make a positive commitment to provide the services as specified. 4.2.2. Give the name(s) of the person(s) who are authorized to make representations for your firm, their titles, address, and telephone numbers. 4.2.3. The letter must be signed by a corporate officer or other individual who has the authority to bind the firm. 4.2.4. Statement of interest and qualifications which shall, at a minimum address the following areas: 4.2.5. Firm Organization: The overall organization, activities, experience, and support staff. 4.2.6. Personnel: Resumes of counsel, supervising counsel, paralegals, and other professional personnel to be assigned to handle legal matters. Legal counsel must be a member in good standing of the Alaska Bar Association. 4.2.6.1. Detail professional and educational qualifications. 4.2.6.2. Quality, depth and range of experience(s), and expertise with representation of a small municipal government including the firm's demonstrated experience, abilities and past performance in handling municipal matters. 4.2.7. Experience: The firm's demonstrated experience, abilities, and past performance in handling municipal matters — be specific. Please list any other information that relates directly to the firm's ability to perform the requested services. In particular, the Borough is interested in: 4.2.7.1. The caseload over the last 10 years in the following areas of law: 4.2.7.2. The level of expertise and professionalism in the following areas of law: 4.2.7.2.1. Municipal zoning, 4.2.7.2.2. Ordinance prosecution, Kodiak island Borough RFP for General Counsel Legal Services Page 5 4.2.7.2.3. Land use appeals, 4.2.7.2.4. Civil rights. 4.2.7.2.5. Premises liability, 4.2.7.2.6. Public employment labor law, 4.2.7.2.7. Condemnation, 4.2.7.2.8. Pension and tax matters, 4.2.7.2.9. Ordinance drafting, 4.2.7.2.10. Contracts and leases. 4.2.7.2.11. Construction contracts 4.2.7.2.12. Property taxes, 4.2.7.2.13. Parliamentary Procedures, 4.2.7.2.14 Open Meetings Act, 4.2.7.2.15. Election laws, 4.2.7.2.16. Other (please explain) 4.2.8. References: The names and current telephone numbers of three Alaskan client references who are familiar with the firm's experience and abilities in the areas described in Section 3. See Attachment C for instructions and the required form. 4.2.9. Methodology: The expected organizational arrangements of the firm and the proposed method of performing the defined services. Such description should include, at a minimum. identification of principal counsel, supervising counsel and staff to be assigned to particular matters, identification of available administrative resources, and the general workflow. 4.2.10. Conflicts: A list of all matters and /or cases where the firm currently represents an individual or entity with interests adverse to the Borough. 5. FIRM BACKGROUND AND REFERENCES 5.1. PRIMARY FIRM INFORMATION - Firms must provide a company profile. Information provided shall include: 5.1.1. Company ownership. If incorporated, the state in which the company is incorporated and the date of incorporation. An out -of -state firm must be duly qualified to do business in the Kodiak Island Borough. 5.1.2. Disclosure of any alleged significant prior or ongoing contract failures, contract breaches, any civil or criminal litigation or investigation pending which involves the firm or in which the firm has been judged guilty or liable. This is a mandatory disclosure. 5.1.3. Location(s) of the company offices and location of the office servicing any Kodiak Island Borough account(s). 5.1.4. Number of employees both locally and nationally. Kodiak Island Borough RFP for General Counsel Legal Services Page 6 5.1.5. Location(s) from which employees will be assigned. 5.1.6. Name, address and telephone number of the firm's point of contact for a contract resulting from this RFP. 5.1.7. Company background /history and why firm is qualified to provide the services described in this RFP. 5.1.8. Length of time firm has been providing services described in this RFP to the public and /or private sector. Please provide a brief description. 5.1.9. Has the firm ever been engaged under contract by any state or municipal agency located within the State of Alaska? [ ] Yes or [ ] No. If "Yes," specify when, for what duties, and for which agency. 5.1.10. Is the firm or any of the firm's employees employed by the Kodiak Island Borough or by any other government? [ ] Yes or [ ] No. If "Yes," is that employee planning to render services while on annual leave, compensatory time, sick leave, or on his own time? 5.1.11. Resumes for key staff to be responsible for performance of any contract resulting from this RFP. 5.2. REFERENCES - Firms shall provide a minimum of three references from similar clients performed for private, state and /or large local government clients within the last three years. Firms are required to submit Attachment C, Reference Form to the business references they list. The business references must submit the Reference Form directly to the Borough Manager's Office. It is the firm's responsibility to ensure that the completed forms are received by the Manager's Office on or before the proposal submission deadline for inclusion in the evaluation process. Business references that are not received, or are not complete, will adversely affect the firm's score in the evaluation process. The Kodiak Island Borough may contact any or all business references for validation of information submitted. 5.3. INDEPENDENT COUNSEL INFORMATION 5.3.1. Does this proposal include the use of independent counsel? Yes No Unknown If "Yes ", firm must: 5.3.1.1. Identify specific independent counsel to be utilized and the specific requirements of this RFP for which each proposed independent counselor will perform services. 5.3.1.2. Provide the same information for any proposed independent counsel as requested in the Primary Firm Information section. 5.3.1.3. References as specified above must be provided for any proposed independent counsel. 5.3.1.4. The Borough requires that the awarded firm provide proof of payment to any independent counsel used for this project. Proposals shall include a plan by which the Borough will be notified of such payments. 6. COST 6.1. Proposals will state the following cost information: Kodiak Island Borough RFP for General Counsel Legal Services Page 7 6.1.1. An hourly cost for services to be provided for each task of the contract. 6.1.2. Travel time costs, if any, including: 6.1.2.1. Cost per hour for travel. 6.1.2.2. Time to travel to one meeting located at 710 Mill Bay Road, Kodiak, AK. 7. PAYMENT 7.1. Payment for the contracted service will be within 30 days upon receipt of invoice and the Manager's approval of invoice. 7.2. Payment is tied to an hourly rate on an "as needed basis." The Borough generally pays for services billed on a monthly basis, upon receipt of an invoice and the using department's verification of services received. 7.3. Firms may propose an alternative payment option; alternative payment options must be listed on Attachment A of the RFP. Alternative payment options will be considered if deemed in the best interest of the Borough, project or service solicited herein. The Borough does not issue payment prior to receipt of goods or services. 8. SUBMITTAL INSTRUCTIONS 8.1. In lieu of a pre - proposal conference, the Kodiak Island Borough will accept questions and /or comments in writing, received either by mail, facsimile, or e -mail regarding this RFP as follows: 8.1.1. Questions must reference this RFP and be addressed to the Kodiak Island Borough, Attn: Manager's Office, 710 Mill Bay Road, Kodiak, AK 99615, faxed to (907) 486 -9374 or e- mailed to mchristiansen cr,kodiakak.us. The deadline for submitting questions is Febniary 12, 2010 at 5:00 p.m., Alaska Time. All questions and /or comments will be addressed in writing and responses mailed, faxed, or e- mailed to prospective firms on or about February 19, 2010. Please provide company name, address, phone number, fax number, e -mail address, and contact person when submitting questions. 8.1.2. Firms shall carefully review this RFP for defects and questionable or objectionable materials. Firms' comments concerning defects and questionable or objectionable material in the RFP must be made in writing and received by the Manager's Office not later than the deadline for submitting questions stated above. 8.2. RFP Timeline TASK DATE/TIME Deadline for submitting questions February 12, 2010, 5:00 pm. Answers to all questions submitted available on or about February 19, 2010, 3:00 pm. Deadline for submission and opening of proposals March 12, 2010, 3:00 p.m. Evaluation period March 15 -25, 2010 Final Selection for Interview with Assembly March 25, 2010 Kodiak Island Borough RFP for General Counsel Legal Services Page 8 Interview of Firms April 22, 2010 Selection of firm on or about May 5, 2010 NOTE: These dates represent a tentative schedule of events. The Borough reserves the right to modify these dates at any time, with appropriate notice to prospective firms. 8.3. Firms shall submit one original proposal marked "MASTER" and fourteen identical copies to: Kodiak Island Borough, Attn: Manager's Office 710 Mill Bay Road Kodiak, AK 99615 Proposals shall be clearly labeled in a sealed envelope or box as follows: REQUEST FOR PROPOSAL General Counsel Legal Services PROPOSAL OPENING DATE: March 12, 2010 8.4. Proposals must be received at the above - referenced address no later than 3:00 p.m., Alaska Time, March 12, 2010. Proposals that do not arrive by proposal opening time and date WILL NOT BE ACCEPTED. Finns may submit their proposal any time prior to the above stated deadline. 8.5. The Borough will not be held responsible for proposal envelopes mishandled as a result of the envelope not being properly prepared. Facsimile, e -mail, or telephone proposals will NOT be considered; however, at the Borough's discretion, a proposal may be submitted all or in part on electronic media. Proposals may be modified by facsimile, e -mail, or written notice, provided such notice is received prior to the opening of the proposals. Firms may transmit proposal modifications by facsimile or email at their own risk. The Borough will not be responsible for any error or failure in facsimile or email transmission or receipt. 8.6. If discrepancies are found between two or more copies of the proposal, the master copy will provide the basis for resolving such discrepancies. If one copy of the proposal is not clearly marked "MASTER," the Borough may reject the proposal. However, the Borough may at its sole option, select one copy to be used as the master. 8.7. For ease of evaluation, the proposal should be presented in a format that corresponds to and references sections outlined within this RFP, and should be presented in the same order. Responses to each section and subsection should be labeled so as to indicate which item is being addressed. Exceptions to this will be considered during the evaluation process. 8.8. If complete responses cannot be provided without referencing supporting documentation, such documentation must be provided with the proposal and specific references made to the tab, page, section and /or paragraph where the supplemental information can be found. 8.9. Proposals are to be prepared in such a way as to provide a straightforward, concise delineation of capabilities to satisfy the requirements of this RFP. Expensive bindings, colored displays, promotional materials, etc., are not necessary or desired. Emphasis should be concentrated on Kodiak Island Borough RFP for General Counsel Legal Services Page 9 conformance to the RFP instructions, responsiveness to the RFP requirements, and on completeness and clarity of content. 8.10 Descriptions on how any and all equipment and /or services will be used to meet the requirements of this RFP shall be given, in detail, along with any additional information documents that are appropriately marked. 8.11. The proposal must be signed by the individual(s) legally authorized to bind the firm. 8.12. For ease of responding to the RFP, firms are encouraged, but not required, to obtain an electronic copy of the REP. Electronic copies are available on the Kodiak Island Borough website at www.kodiakak.us. 8.13. Firms utilizing an electronic copy of the RFP in order to prepare their proposals should place their written response in an easily distinguishable font immediately following the applicable question. 8.14. For purposes of addressing questions concerning this RFP, the sole contact will be the Borough Manager's Office. Upon issuance of this RFP, other employees and representatives of the agencies identified in the RFP will not answer questions or otherwise discuss the contents of this RFP with any prospective firms or their representatives. This restriction does not preclude discussions between affected parties for the purpose of conducting business unrelated to this procurement. 8.15. Any firm who believes proposal requirements or specifications are unnecessarily restrictive or limit competition may submit a request for administrative review, in writing, to the Manager's Office. To be considered, a request for review must be received no later than the deadline for submission of questions. 8.16. The Manager's Office shall promptly respond in writing to each written review request, and where appropriate, issue all revisions, substitutions, or clarifications through a written amendment to the RFP. 8.17. Administrative review of technical or contractual requirements shall include the reason for the request, supported by factual information, and any proposed changes to the requirements. 8.18. If a firm changes any material RFP language, that firm's response may be deemed non- responsive. 8.19. Firms are cautioned that some services may contain licensing requirement(s). Firms shall be proactive in verification of these requirements prior to proposal submittal. Proposals, which do not contain evidence of the firm's possession of the requisite licensure, may be deemed non - responsive. 8.20. Proposals shall be submitted in two distinct parts - the narrative /technical proposal and the cost proposal. THE NARRATIVE /TECHNICAL PROPOSAL MUST NOT INCLUDE COST AND PRICING INFORMATION. While Technical and Cost proposals may be shipped together (i.e., in the same box /envelope), each proposal, inclusive of the master and requisite number of copies, must be bound or packaged separately. Kodiak Island Borough RFP for General Counsel Legal Services Page 10 9. PROPOSAL EVALUATION AND AWARD PROCESS 9.1. Proposals shall be consistently evaluated and scored on a 100 point scale in accordance with Borough Code 3.30.110 based upon the following criteria: 9.1.1. Firm Experience — Experience of the Legal Firm — 20 points Number of years in the State of Alaska Bar Association; number of years of direct experience with a government entity; and caseload history as outlined in 4.2.7.2.1 through 4.2.7.2.14. 9.1.2. Fee Structure — Hourly charge to the Borough for legal services — 10 points Hourly fee(s), travel costs, staff fees, etc. The more reasonable the cost, the higher the number of points assigned. 9.1.3. Primary Attorney — Experience of the Primary Attorney assigned to the Borough - 25 points Number of years as legal counsel for a government entity and caseload experience as outlined in 4.2.7.2.1 through 4.2.7.2.16. 9.1.4. Methodology /Approach — 20 points — Scored twice The methodology and approach should describe the philosophy that will be used in representing the Borough. The Firm should highlight the firm's strengths, the strengths of the primary attorney, and describe the preferred method(s) of communication including face to face meetings, teleconferencing, or e -mail. The methodology should be described in sufficient detail to demonstrate familiarity with this type of service and should identify areas where the firm can add value. The approach should be used to suggest innovations that can be applied to the services to help make government more efficient. Firms should also state their philosophy in representing government, and their view of a proper attorney /client relationship when representing a governmental body consisting of diverse individuals. This category will be scored twice. Once for each of the written proposals submitted and then a second time during the interviews of the top three firms. 9.1.5. Communication —10 points — Scored twice (see below) Based upon the vvmitten proposal of all firms and verbal interview of the top three firms 9.1.6. Single Firm Proposals — 5 points Although the Borough will consider joint proposals from a combination of two or more firms, we prefer to contract with a single firm that will provide all of the required legal services. Reference Questionnaire Responses — 10 points Points will be awarded for each reference questionnaire received up to a maximum of three responses. Note: Conflict of interest, financial stability, and response from Section 5.1.2. will be scored on a pass /fail basis. Proposals shall be kept confidential until a contract is awarded. Kodiak Island Borough RFP for General Counsel Legal Services Page 11 9.2. The evaluation committee may also contact the references provided in response to the section identified as Company Background and References; contact any firm to clarify any response; contact any current users of a firm's services; solicit information from any available source concerning any aspect of a proposal; and seek and review any other information deemed pertinent to the evaluation process. The evaluation committee shall not be obligated to accept the lowest priced proposal, but shall make an award in the best interests of the Kodiak Island Borough (Borough Code 3.30.110). 9.3. Each firm must include in its proposal a complete disclosure of any alleged significant prior or ongoing contract failures, contract breaches, any civil or criminal litigation, or investigations pending which involves the firm or in which the firm has been judged guilty or liable. Failure to comply with the terms of this provision may disqualify any proposal. The Borough reserves the right to reject any proposal based upon the firm's prior history with the Borough or with any other party, which documents, without limitation, unsatisfactory performance, adversarial or contentious demeanor, significant faihire(s) to meet contract milestones or other contractual failures per Borough Code 3.30.080. 9.4. Clarification discussions may, at the Borough's sole option, be conducted with firms who submit proposals determined to be acceptable and competitive per Borough Code 3.30.110. Firms shall be accorded fair and equal treatment with respect to any opportunity for discussion. In conducting discussions, there shall be no disclosure of any information derived from proposals submitted by competing firms. 9.5. Any award is contingent upon the successful negotiation of final contract terms and upon approval of the Assembly, when required. Negotiations shall be confidential and not subject to disclosure to competing firms unless and until an agreement is reached. If contract negotiations cannot be concluded successfully, the Borough upon written notice to all firms may negotiate a contract with the next highest scoring firm or withdraw the RFP. 9.6. Any contract resulting from this RFP shall not be effective unless and until approved by the Borough Assembly. • 10. TERMS, CONDITIONS AND EXCEPTIONS 10.1. Performance of the firm may be rated semi - annually following contract award and then annually for the term of the contract by the using six categories: customer service; timeliness; quality; technology; flexibility; and pricing. The firm will be notified in writing of its rating. 10.2. This procurement is being conducted in accordance with Borough Code 3.30. 10.3. The Borough reserves the right to alter, amend, or modify any provisions of this RFP, or to withdraw this RFP, at any time prior to the award of a contract pursuant hereto, if it is in the best interest of the Borough to do so. 10.4. The Borough reserves the right to waive informalities and minor irregularities in proposals received. 10.5. The Borough reserves the right to reject any or all proposals received prior to contract award (3.30.050). Kodiak Island Borough RFP for General Counsel Legal Services Page 12 10.6. The Borough shall not be obligated to accept the lowest priced proposal, but will make an award in the best interests of the Kodiak Island Borough after all factors have been evaluated (3.30.080). 10.7. Any irregularities or lack of clarity in the RFP should be brought to the attention of the Borough Manager's Office as soon as possible so that corrective addenda may be furnished to prospective firms. 10.8. Proposals must include any and all proposed terms and conditions, including, without limitation, written warranties, maintenance /service agreements, license agreements, lease purchase agreements, and the firm's standard contract language. The omission of these documents renders a proposal non - responsive. 10.9. Alterations, modifications, or variations to a proposal may not be considered unless authorized by the RFP or by addendum or amendment. 10.10. Proposals which appear unrealistic in the terms of technical commitments, lack of technical competence, or are indicative of failure to comprehend the complexity and risk of this contract, may be rejected. 10.11. Proposals may be withdrawn by written or facsimile notice received prior to the proposal opening time. Withdrawals received after the proposal opening time will not be considered. Firms may transmit proposal withdrawals by facsimile at their own risk. The Borough will not be responsible for any error or failure in facsimile transmission or receipt. 10.12. The price and amount of this proposal must have been arrived at independently and without consultation, communication, agreement, or disclosure with or to any other firm or prospective firm. Collaboration among competing firms about potential proposals submitted pursuant to this RFP is prohibited and may disqualify the firm. 10.13. No attempt may be made at any time to induce any firm or person to refrain from submitting a proposal or to submit any intentionally high or noncompetitive proposal. All proposals must be made in good faith and without collusion. 10.14. Prices offered by firms in their proposals are an irrevocable offer for the term of the contract and any contract extensions. The awarded firm agrees to provide the purchased services at the costs, rates, and fees as set forth in their proposal in response to this RFP. No other costs, rates, or fees shall be payable to the awarded firm for implementation of their proposal. 10.15. The Borough is not liable for any costs incurred by firms prior to entering into a formal contract. Costs of developing the proposals or any other such expenses incurred by the firm in responding to the RFP, are entirely the responsibility of the firm, and shall not be reimbursed in any manner by the Borough. 10.16. All proposals submitted become the property of the Borough and will be returned only at Borough's option and at the firm's request and expense. The master copy of each proposal shall be retained for official files and will become public record after the award of a contract. If a firm wishes individual pages which contain actual business propriety information to be Kodiak Island Borough RFP for General Counsel Legal Services Page 13 held confidential, each page shall be marked and an explanation furnished of its propriety nature. In addition to marking individual pages, the proposal cover will also be annotated with the words "THIS PROPOSAL CONTAINS PROPRIETARY INFORMATION." Confidential and Proprietary information is not meant to include any information which, at the time of disclosure, is generally known by the public and /or competitors. 10.17. A proposal submitted in response to this RFP must identify any utilization of independent counsel, and outline the contractual relationship between the awarded firm and each independent counsel. An official of each proposed independent counsel must sign, and include as part of the proposal submitted in response to this RFP, a statement to the effect that the independent counsel has read and will agree to abide by the awarded firm's obligations. 10.18. The awarded firm will be the sole point of contract responsibility. The Borough will look solely to the awarded firm for the performance of all contractual obligations which may result from an award based on this RFP, and the awarded firm shall not be relieved for the nonperformance of any or all independent counsel. 10.19. The awarded firm must maintain, for the duration of its contract, insurance coverage as set forth in the Insurance Schedule of the contract form appended to this RFP. Work on the contract shall not begin until after the awarded firm has submitted acceptable evidence of the required insurance coverage. Failure to maintain any required insurance coverage or acceptable alternative method of insurance will be deemed a breach of contract. 10.20. Notwithstanding any other requirement of this section, the Borough reserves the right to consider reasonable alternative methods of insuring the contract in lieu of the insurance policies required by the above- stated Insurance Schedule. It will be the awarded firm's responsibility to recommend to the Borough alternative methods of insuring the contract. Any alternatives proposed by a firm should be accompanied by a detailed explanation regarding the firm's inability to obtain insurance coverage as described above. The Borough shall be the sole and final judge as to the adequacy of any substitute form of insurance coverage. 10.21. Each firm must disclose any existing or potential conflict of interest relative to the performance of the contractual services resulting from this RFP. Any such relationship that might be perceived or represented as a conflict should be disclosed. By submitting a proposal in response to this RFP, firms affirm that they have not given, nor intend to give at any time hereafter, any economic opportunity, future employment, gift, loan, gratuity, special discount, trip, favor, or service to a public servant or any employee or representative of same, in connection with this procurement. Any attempt to intentionally or unintentionally conceal or obfuscate a conflict of interest will automatically result in the disqualification of a firm's proposal. An award will not be made where a conflict of interest exists. The Borough will determine whether a conflict of interest exists and whether it may reflect negatively on the Borough's selection of a firm. The Borough reserves the right to disqualify any firm on the grounds of actual or apparent conflict of interest. 10.22. The Borough will not be liable for Federal, State, or Local excise taxes. 10.23. Execution of Attachment A of this RFP shall constitute an agreement to all terms and conditions specified in the RFP, including, without limitation, the Attachment B contract form Kodiak Island Borough RFP for General Counsel Legal Services Page 14 and all terms and conditions therein, except such terms and conditions that the firm expressly excludes. Exceptions will be taken into consideration as part of the evaluation process. 10.24. The Borough reserves the right to negotiate final contract terns with any firm selected per Borough Code 3.30.110(E). The contract between the parties will consist of the RFP together with any modifications thereto, and the awarded firm's proposal, together with any modifications and clarifications thereto that are submitted at the request of the Borough during the evaluation and negotiation process. In the event of any conflict or contradiction between or among these documents, the documents shall control in the following order of precedence: the final executed contract, the RFP, any modifications and clarifications to the awarded firm's proposal, and the awarded firm's proposal. Specific exceptions to this general rule may be noted in the final executed contract. 10.25. Firm understands and acknowledges that the representations above are material and important, and will be relied on by the Borough in evaluation of the proposal. Any firm misrepresentation shall be treated as fraudulent concealment from the Borough of' the true facts relating to the proposal. 10.26. No announcement concerning the award of a contract as a result of this RFP can be made without the prior written approval of the Borough. 10.27. The Borough Attorney will not render any type of legal opinion regarding this transaction. 10.28. Any person who requests or receives a Federal contract, grant, loan, or cooperative agreement shall file with the using agency a certification that the person making the declaration has not made, and will not make, any payment prohibited by subsection (a) of 31 U.S.C. § 1352. 10.29. Supplies, services, or equipment will not be purchased from firms that are known to be in violation of the Borough Code 3.30.115. 10.30. The Borough reserves the right to conduct a background inquiry of each firm that may include collection of appropriate criminal history information, contractual and business associations and practices, employment histories, and reputation in the business community. By submitting a proposal to the Borough, the firm consents to such an inquiry and agrees to make available to the Borough such books and records the Borough deems necessary to conduct the inquiry. Kodiak Island Borough RFP for General Counsel Legal Services Page 15 11. SUBMISSION CHECKLIST This checklist is provided for firm's convenience only and identifies documents that must be submitted with each package in order to be considered responsive. Any proposals received without these requisite documents may be deemed non - responsive and not considered for contract award. Documents to be submitted with proposal: Completed 1. Requested number of copies of technical proposals packaged separately 2. Requested number of copies of cost proposals packaged separately 3. Page 1 of the RFP completed and signed 4. Primary Firm Attachment A signed with confidentiality /exceptions noted 5. IC Attachment A signed with confidentiality /exceptions noted 6. Primary Firm Information provided 7. Independent Counsel Information provided (if applicable) 8. Reference forms sent out for Primary Firm 9. Reference forms sent out for Independent Counsel (if applicable) 10. Verification of licensure for Primary Firm (if applicable) 11. Verification of licensure for Independent Counsel (if applicable) 12. Certificate of Insurance 13. (other) Primary Firm's Company Name: Kodiak Island Borough RFP for General Counsel Legal Services Page 16 Attachment A CERTIFICATION OF INDEMNIFICATION AND COMPLIANCE WITH TERMS AND CONDITIONS OF RFP PRIMARY FIRM Submitted proposals are confidential until the contract is awarded and only specific parts of the proposal may be labeled a "trade secret." In the event a governing board acts as the final authority, there may be public discussion regarding the submitted proposals that will be in an open meeting format, the proposals will remain confidential. This proposal contains proprietary information Yes No By signing below, I understand it is my responsibility as the firm to act in protection of the labeled information and agree to defend and indemnify the Borough for honoring such designation. I duly realize failure to so act will constitute a complete waiver and all submitted information will become public information; additionally, failure to label any information that is released by the Borough shall constitute a complete waiver of any and all claims for damages caused by the release of the information. I have read, understand, and agree to comply with the terms and conditions specified in this Request for Proposal. Checking "YES" indicates acceptance, while checking "NO" denotes non - acceptance and should be detailed below. Any exceptions MUST be documented. YES NO SIGNATURE Primary Firm EXCEPTIONS: Attach additional sheets if necessary. Please use this format. EXCEPTION SUMMARY FORM RFP SECTION RFP PAGE PROPRIETARY INFORMATION AND /OR NUMBER NUMBER EXCEPTION (PROVIDE A DETAILED EXPLANATION) Kodiak Island Borough RFP for General Counsel Legal Services Page 17 CERTIFICATION OF COMPLIANCEWITH TERMS AND CONDITIONS OF RFP INDEPENDENT COUNSEL Submitted proposals are confidential until the contract is awarded; following contract award, in accordance with Section 9.2 of this RFP, only specific parts of the proposal may be labeled a "trade secret ". In the event a governing board acts as the final authority, there may be public discussion regarding the submitted proposals that will be in an open meeting format, the proposals will remain confidential. This proposal contains proprietary information Yes No By signing below, I understand it is my responsibility as the firm to act in protection of the labeled information and agree to defend and indemnify the Borough for honoring such designation. I duly realize failure to so act will constitute a complete waiver and all submitted information will become public information; additionally, failure to label any information that is released by the Borough shall constitute a complete waiver of any and all claims for damages caused by the release of the information. I have read, understand, and agree to comply with the terms and conditions specified in this Request for Proposal. Checking "YES" indicates acceptance, while checking "NO" denotes non- acceptance and should be detailed below. Any exceptions MUST be documented. YES NO SIGNATURE Independent Counsel EXCEPTIONS: Attach additional sheets if necessary. Please use this format. EXCEPTION SUMMARY FORM RFP SECTION RFP PAGE PROPRIETARY INFORMATION AND /OR NUMBER NUMBER EXCEPTION (PROVIDE A DETAILED EXPLANATION) Kodiak Island Borough RFP for General Counsel Legal Services Page 18 Attachment B CONTRACT FORM The following Contract Form is provided as a courtesy to firms interested in responding to this RFP. Please review the terms and conditions in this form. Please pay particular attention to the insurance requirements, as specified in Part II, Section 9. Kodiak Island Borough RFP for General Counsel Legal Services Page 19 SAMPLE CONTRACT Contract for Professional Legal Services In consideration of the mutual promises herein, the KODIAK ISLAND BOROUGH and the law offices of (firm) agree as follows: A. Part I, consisting of 14 sections of Special Provisions; B. Part II, consisting of 11 sections of General Provisions. Part I Special Provisions Section 1. Definitions. In this contract: A. "Manager" means the Manager of the Kodiak Island Borough. B. `Borough" means the Kodiak Island Borough. C. "Assembly" means the Kodiak Island Borough Assembly. Section 2. Scope of Services. A. The Borough Attorney shall act as legal advisor to the Borough Assembly, administration, and other officials of the Borough to include without limitation the following: (1) To duly advise the Assembly, administration, and other officials at meetings of the Assembly and at other functions as may be designated; (2) To draft opinion letters regarding, among other subjects, the interpretation of the Borough codes, state and federal laws, and policies; (3) To draft municipal ordinances involving all municipal matters; (4) To review and provide opinions on codes, contracts, resolutions, and other written instructions which are submitted to the attorney by the Borough; (5) To call attention of the Assembly and /or Manager, as may be appropriate, to or of changes or developments in legal matters that affect the Borough; and (6) To perform other such duties as may be prescribed for the Borough Attorney by ordinance or by direction of the Assembly and /or Manager. B. The Borough Attorney shall represent the Borough as attorney in civil and criminal proceedings affecting the Borough; however, the Borough Assembly may hire independent counsel when in its judgment independent counsel is needed. The attorney will represent the Borough in litigation involving prosecution of municipal code violation Kodiak Island Borough RFP for General Counsel Legal Services Page 20 when needed. Firms must be qualified to represent the Borough in all State of Alaska Courts, U.S. District Court, and before the Ninth Circuit Court of Appeals. C. The Borough Attorney must work effectively with the Borough Assembly, administration, boards and commissions, and also with other public agencies with which the Borough has legal relations. D. The Borough Attorney must be experienced and proficient in legal matters affecting the Borough, to include without limitation, federal and state constitutional law, federal and state non - constitutional law, Alaska Statute 29, and Borough Code. E. All representation of the Borough shall continue until the matters or cases assigned are either closed out by mutual consent or are recalled by the Borough Assembly. F. The firm shall not engage any consultant, expert, or service without the prior approval of the Manager or Assembly. G. Provide toll -free telephone access to the Borough. H. The firm shall: (1) Provide the Borough with copies of any significant pleading and /or correspondence prior to filing /sending them. (2) Obtain the Borough Manager's approval of all expenses exceeding $2,000. Section 3. Access to Municipal Personnel. The Manager shall secure the cooperation of the Borough personnel as necessary to assist the firm's performance hereunder. Section 4. Contract Administrator. The Borough shall: A. Receive all information and notices the firm is required to communicate to the Borough pursuant to this agreement. B. The Manager shall administer the contract on behalf of the Borough. Section 5. Term. A. For purposes of case assignments, this contract becomes effective when signed on behalf of the Borough and shall continue for three years from date executed. The contract may be renewed for up to three additional one -year extensions at the Borough Assembly's option. B. For purpose of assigned case completion this contract may be extended upon mutual consent. Section 6. Compensation Kodiak Island Borough RFP for General Counsel Legal Services Page 21 A. The firm shall be compensated at the hourly rates enumerated in Attachment A. The attorney's fee schedule is to remain fixed for the first three years of the contract with three, one -year extensions at the Assembly's option. If the Assembly opts to extend the contract, the fee schedule may be negotiated. The firm will also be reimbursed for other appropriate costs incurred to perform under this contract. B. The firm shall be entitled to no compensation under this contract beyond the scope of the Borough's express obligations under subsection A. The Borough understands that instances may arise that require additional services. During these times the firm will give the Assembly an estimate of services requested and will return to the Assembly prior to exceeding the estimate. C. As a condition of payment, the firm shall have paid all municipal taxes currently due and owing by the firm. Section 7. Payment and Reporting. A. The firm shall submit itemized monthly billings to the Borough Manager for payment of all fees and costs for which the firm seeks reimbursement under Section 6. Said monthly billings shall identify the subject of the work performed and the time, to the nearest one- tenth of an hour, spent on each subject. Costs shall be itemized and described separately on each monthly invoice. B. Upon approved billing, payment will be remitted to the firm within 30 days. Section 8. Termination of the Firm's Services The firm's services under Section 2 may be terminated: A. For convenience by the Borough Assembly. B. By mutual consent of the parties. C. For cause, by either party where the other party fails in any material way to perform its obligations under this contract. Termination under this subsection is subject to the condition that the terminating party notifies the other party of its intent to terminate, stating with reasonable specificity the grounds therefore, and the other party fails to cure the default within fifteen days after receiving the notice. Section 9. Duties Upon Termination. A. If the firm's services are terminated for the convenience of the Borough or by mutual consent of the parties, the firm will be paid as provided for under Section 6. Total compensation will not exceed the amount stated in Section 6. All finished and unfinished documents, work product, and materials prepared by the firm remain the property of the Borough. B. If the firm's services are terminated for cause, the Borough shall pay the firm the reasonable value of the services satisfactorily rendered prior to termination, less any damages suffered by the Borough because of the firm's failure to perform satisfactorily. The reasonable value of the services rendered shall not exceed the contract rate for such Kodiak Island Borough RFP for General Counsel Legal Services Page 22 services, and payment under this section shall not exceed ninety percent of the total compensation allowable under Section 6. Any finished or unfinished documents, work product, or materials prepared by the firm under this contract shall become the property of the Borough. C. The firm shall not be entitled to any compensation under this section until the firm has delivered to the Borough Manager all documents, records, work product, and materials relating to this contract. D. If the firm's services are terminated, for whatever reason, the firm shall not claim any compensation, under this contract, other than that allowed under this section. E. Except as provided in this section, termination of the firm's services under Section 8 does not affect any other right or obligation of a party under this contract. Section 10. Case Management. A. Execution of the contract by the Borough shall act as full authority for the firm to proceed with the representation of the Borough as provided hereunder. B. The Borough will have complete and total access to all material, information and files worked on by the firm pursuant to this contract. C. Copies of all legal opinions shall be provided to the Borough Clerk's office. Section 11. Assignments. Unless otherwise allowed by the Manager or as directed by the Borough Assembly, any assignment by the firm of its interest in any part of this contract or any delegation of duties under this contract shall be void, and any attempt by the firm to assign any part of its interest or delegate duties under this contract shall give the Borough the right to immediately terminate this contract without any liability for work performed. Section 12. Ownership; Publication, Reproduction and Use of Material. A. The firm agrees to discuss matters and reveal documents relating to this contract only with the Borough Assembly, Manager, Borough Clerk, or any person authorized by the aforementioned, and as required by court order. B. Except as otherwise provided herein, all data, documents, work product, research, reports, and materials produced by the firm under this contract shall be the property of the Borough, which shall retain exclusive right to publish, disclose, distribute, copy, and otherwise use, in whole or in part, any such data, documents, research, reports, or other materials. Section 13. Notices. Any notice required pertaining to the subject matter of this contract shall be either personally delivered, faxed, or mailed by prepaid first class registered or certified mail, return receipt requested to the following address: Kodiak Island Borough RFP for General Counsel Legal Services Page 23 Borough: Kodiak Island Borough Attention: Manager's Office 710 Mill Bay Road Kodiak, AK 99615 FAX: (907) 486 -9374 Firm: Section 14. Conflict of Interest. The firm may not represent or assist private or public clients in connection with other claims, litigation, or other legal matters where such representation would constitute or appear to constitute a conflict of interest. In particular, the firm shall comply with all relevant provisions of the Alaska Bar Rules and the Alaska Rules of Professional Conduct concerning the prohibition of conflicts of interest among clients. The firm shall not accept any employment and shall not render any professional services to other parties if such action might be inconsistent with the above - referenced standards unless the prior approval of the Assembly has been first obtained. Part II General Contract Provisions Section 1. Relationship of Parties. The firm shall perform its obligations hereunder as an independent firm of the Borough. The Borough may administer the contract and monitor the firm's compliance with its obligations hereunder. Section 2. Nondiscrimination. A. The firm will not discriminate against any employee or applicant for employment because of race, color, religion, national origin, ancestry, age, sex, or marital status, or mental or physical disability. The fitnt will take affirmative action to ensure that applicants are employed and that employees are treated during employment without regard to their race, color, religion, or mental or physical disability. Such action shall include, without limitation, employment, upgrading, demotion, or transfer, recruitment or recruiting advertising, layoff or termination, rates of pay or other forms of compensation, and selection for training including apprenticeship. The firm agrees to post in conspicuous places, available to employees and applicants for employment, notices setting forth the provisions of this nondiscrimination clause. B. The firm shall state, in all solicitations or advertisements for employees to work on contact jobs, that all qualified applicants will receive consideration for employment Kodiak Island Borough RFP for General Counsel Legal Services Page 24 without regard to race, color, religion, national origin, ancestry, age, sex, or marital status, or mental or physical disability. C. The firm shall comply with any and all reporting requirements that may apply to it which the Kodiak Island Borough may establish. D. The firm shall include the provisions of subsections A through C of this section in every subcontract or purchase order under this contract, so as to be binding upon every such independent counsel or firm of the firm under this contract. Section 3. Permits, Laws and Taxes. The firm shall acquire and maintain in good standing all permits, licenses, and other entitlements necessary to its performance under this contract. All actions taken by the firm under this contract shall comply with all applicable law to include without limitation, statutes, ordinances, rules, and regulations. Section 4. Nonwaiver. The failure of either party at any time to enforce a provision of this contract shall in no way constitute a waiver of the provision, nor in any way effect the validity of this contract or any part hereof, or the right of such party thereafter to enforce each and every provision hereof. Section 5. Amendment. A. This contract may be amended, modified, or changed only in writing as approved by the Borough Assembly and executed by the Borough Manager and an authorized representative of the firm. B. For the purpose of any amendment, modification, or change to the terms and conditions of this contract, the only authorized representatives of the parties are: (1) Kodiak Island Borough Manager (2) (Name of Contract Representative Here) C. Any attempt to amend, modify, or change this contract by either an unauthorized representative or unauthorized means shall be void. Section 6. Jurisdiction; Choice of Law. Any civil action rising from this contract shall be brought in the Superior Court for the Third Judicial District of the State of Alaska, at Kodiak. The laws of the State of Alaska shall govern the rights and obligations of the parties under this contract. Section 7. Severability. Any provision of this contract decreed invalid by a court of competent jurisdiction shall not invalidate the remaining provisions of the contract. Section 8. integration. Kodiak Island (Borough RFP for General Counsel Legal Services Page 25 This instrument and Attachment A hereto embody the entire agreement of the parties. There are no promises, terms, conditions, or obligations other than those contained herein; and this contract shall supersede all previous communications, representations, or agreements, either oral or written, between the parties hereto. Section 9. Insurance and Indemnification. A. The firm shall maintain in good standing the insurance described in Subsection B of this section. Before rendering any services under this contract, the firm shall furnish the Borough Manager with proof of insurance in accordance with Subsection B of this section. B. The firm shall provide the following types of insurance. The Kodiak Island Borough shall be insured as additional insured on all insurance policies except Professional Liability and Worker's Compensation policies. All policies shall have a thirty day notice of cancellation clause. (1) Workers' Compensation $100,000 Employer's Liability and Workers' Compensation as required by Alaska State Workers' Compensation Statues. (2) Commercial Automobile Liability Bodily Injury and Property Damage, including all owned, hired and non -owned automobiles. $1,000,000 Each Occurrence and Aggregate $1,000,000 (3) Professional Liability Agree to provide lawyer's professional liability insurance for all periods under the contract and provide an extended reporting period endorsement after the end of the contract for three years. Without request by the Borough, the firm shall provide proof of such insurance during the contract period and proof of such endorsement after the end of the contract. The firms' carrier must agree to notify the Borough thirty days before cancellation of insurance or of the extended reporting period endorsement. The insurance shall provide coverage for claims up to a minimum amount of $1,000,000 per claim. C. To the fullest extent permitted by law the firm agrees to defend indemnify and hold harmless the Kodiak Island Borough, its elected and appointed officials, employees, and volunteers against any and all liabilities, claims, demands, lawsuits, or losses including costs and attorney fees, and appellate attorney's fees, incurred in defense thereof arising out of or in any way connected or associated with this contract. Section 10. Inspection and Retention of Records. The firm shall at any time during normal business hours and as often as the Manager or Assembly may deem necessary, make available to the Borough for examination all records with respect to all matters covered by this contract for a period ending three years after the date of the firm is to complete performance in accordance with Section 2 of the Special Provisions. Upon request, and within a reasonable time, the firm shall submit such other information and reports relating to its activities under Kodiak Island Borough RFP for General Counsel Legal Services Page 26 this contract to the Borough in such a form and at such times as the Borough Assembly may reasonably require. The firm shall permit the Borough Assembly or their designee to audit, examine, and make copies of such records, and to make audits of all research, materials, pleadings, records of personnel, and other data relating to all matters covered by this contract. The Borough may, at its option, permit the firm to submit its records to the Borough in lieu of the retention requirements of this section. Section 11. Availability of Funds. This contract is subject to the availability of funds lawfully appropriated for its performance. IN WITNESS WHEREOF, the parties have executed this contract: KODIAK ISLAND BOROUGH Rick Gifford, Borough Manager Date ATTEST: Nova Javier, MMC, Borough Clerk Firm Name: Title: Date: IRS Tax No. State of Alaska) Third Judicial District) Subscribed and sworn before me on Notary Public Commission Expiration Kodiak Island Borough RFP for General Counsel Legal Services Page 27 Attachment C REFERENCE QUESTIONNAIRE The Kodiak Island Borough, as a part of the RFP process, requires proposing firms to submit three business references as required within this document. The purpose of these references is to document the experience relevant to the scope of work and provide assistance in the evaluation process. The proposing firm is required to send the following reference form to each business reference listed. The business reference, in turn, is requested to submit the Reference Form directly to the Kodiak Island Borough, Manager's Office by the RFP submission deadline for inclusion in the evaluation process. The form and information provided will become a part of the submitted proposal. The business reference may be contacted for validation of the response. Kodiak Island Borough RFP for General Counsel Legal Services Page 28 KODIAK ISLAND BOROUGH 710 Mill Ray Road, Kodiak, AK 99615 • Telephone 907.486 -9303 • Fax 907.486 -9374 • GENERAL SERVICES LEGAL COUNSEL RFP REFERENCE QUESTIONNAIRE FOR: (Name of firm requesting reference) This form is being submitted to your company for completion as a business reference for the firm listed above. This form is to be returned to the Kodiak Island Borough, Borough Manager's Office, via facsimile at (907) 486 -9374 or e -mail at mchristiansen@kodiakak.us no later than March 12, 2010 at 3:00 p.m., and must not be returned to the firm requesting the reference. For questions or concerns regarding this form, please contact the Kodiak Island Borough Manager's Office by telephone (907) 486 -9303 or by e -mail: mchristiansen@kodiakak.us CONFIDENTIAL INFORMATION WHEN COMPLETED Company providing reference: Contact name and title /position: Contact telephone number: Contact e-mail address: QUESTIONS: 1. In what capacity have you worked with this firm in the past? COMMENTS: 2. How would you rate this firm's knowledge and expertise? (3 = Excellent; 2 = Satisfactory; 1 = Unsatisfactory; 0 = Unacceptable) COMMENTS: Kodiak Island Borough RFP for General Counsel Legal Services Page 29 3. How would you rate the firm's flexibility relative to changes in the project scope and timelines? (3 = Excellent; 2 = Satisfactory; I = Unsatisfactory; 0 = Unacceptable) COMMENTS: 4. What is your level of satisfaction with hard -copy materials produced by the firm? (3 = Excellent; 2 = Satisfactory; 1 = Unsatisfactory; 0 = Unacceptable) COMMENTS: 5. How would you rate the dynamics /interaction between the firm and your staff? (3 = Excellent; 2 = Satisfactory; 1 = Unsatisfactory; 0 = Unacceptable) COMMENTS: 6. Who were the firm's principal representatives involved in your project and how would you rate them individually? Would you comment on the skills, knowledge, behaviors, or other factors on which you based the rating? (3 = Excellent; 2 = Satisfactory; 1 = Unsatisfactory; 0 = Unacceptable) Name: Rating: Name: Rating: Name: Rating: Name: Rating: COMMENTS: 7. How satisfied are you with the services and products developed by the firm? (3 = Excellent; 2 = Satisfactory; 1 = Unsatisfactory; 0 = Unacceptable) COMMENTS: Kodiak Island Borough RFP for General Counsel Legal Services Page 30 8. With which aspect(s) of this firm's services are you most satisfied? COMMENTS: 9. With which aspect(s) of this firm's services are you least satisfied? COMMENTS: 10. Would you recommend this firm's services to your organization again? COMMENTS: Kodiak Island Borough REP for General Counsel Legal Services Page 3I FY2014 KIB Revenue Forecast A , .., , ,), .,,- • r„ Ial alp 3 , � .,i. x : 4t 4r ` • "'. Prepared by Karleton Short, Finance Director Property Taxes The real estate market is still strong in the Borough. The FY2013 certified roll was $1,085,968,280. The Borough Assessor estimates that the assessed value of the Borough will increase 3% in FY2014 to $1,118,547,328. Real and Personal Property Values 1,200,000,000 Esfimafe 1,000,000,000 — - -- 800,000,000 600,000,000 ..... .. . 400, 000,000 ........ . 200,000,000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 • Real Property • Personal Property In the last three years the Borough's Assessing Department completed a reappraisal of all real property on the road system. They have also reappraised 90% of all remote properties. At the FY2013 area wide rate of 10.75 mills the increase in assessed values will result in an additional $350,000 in property tax revenue. The Borough Assessor does not feel that there will be a slump in property values in the foreseeable future. The total assessed value of the Kodiak Island Borough is estimated to increase about 1% per year. Fisheries The economy of the Borough is driven by fishing. The Borough benefits from a diverse fishing fleet. The major types of fisheries are: • Trawl Caught fish: These are fish such as cod, pollock, sole, etc. that our harvested by draggers. • Halibut, sable fish, pollock etc. that are caught by long lining. • Salmon that are caught by seining and gillnetting. • Crabs and cod that are caught by pot. Other fisheries include seafood such as scallops, sea cucumbers and urchins. While one or two fisheries may be in an economic decline the remaining fisheries remain strong. I have talked briefly with some local fisherman and plant operators. After these discussions I feel that a 10% decrease in our estimated seafood severance tax would be the best estimate for FY2014. As we collect the third and fourth quarters of FY2013 we can refine this estimate. Kodiak Landing History 400,000,000 140,000,000 350,000,000 - 120,000,000 300,000,000 - 100,000,000 250,000,000 V - 80,000,000 a 200,000,000 I h - 60,000,000 u 150,000,000 e 100,000,000 - 40,000,000 50,000,000 - 20,000,000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Pounds — Landed Value Source: National Ocean Economics Program The Borough receives revenues from the fishing industry by severance tax and by State raw fish tax. Borough Severance Tax on Fish The Borough assesses a severance tax on all fish delivered or processed within the Borough. The severance tax rate is the same as the area wide mill rate. In FY2013 this rate was 1.075 %. Severance tax on fish has continued to grow over the last couple of decades. The chart below shows the severance taxes on fish over the last 10 years. Severance Taxes on Seafood FY2013 & FY2014 estimated 2,000,000 1,500,000 1,000,000 1 1 1 � 1 1 }1 1 1 500,000 II 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 The Borough collected $1,892,555 in severance tax on seafood in FY2012 and has collected $968,000 in the fast two quarters of FY2013. At this time we recommend budgeting $1,700,000 for severance taxes on seafood which is 10% less than the amount collected in FY2012. This is fairly conservative. State of Alaska Raw Fish Tax Revenue from the State to the Borough for raw fish tax continues to increase. This chart shows the revenue from this source over the last 10 years. State of Alaska Raw Fish Tax FY2014 estimated 2,000,000 ' 1,500,000 1,000,000 ` ♦ � 1 I 50 0, 00 0 - !! 1 1 1 1 The Borough's revenue from the raw fish tax collected by the State correlates strongly with the Borough's severance tax on seafood. Revenue collected and passed on by the State is generally one year behind. We are budgeting this revenue source very conservatively for the same reasons we kept our severance tax revenue estimates conservative. At this time we are going to budget $1,650,000 for the Borough's share of the raw fish tax collected by the State. This is $13,836 less than what was collected in FY2013. Borough Severance Tax on Timber The Borough's severance tax on timber had been steadily increasing since FY2009. There are two large logging operations in the Borough, one on Afognak Island and one on the road system. Severance Tax on Logging FY2013 and FY2014 estimated 100,000 80,003 , k 60,000 f 1 , 40,000 f ! 1, , , I:. 20,000 - : I ,.. II I l.. 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 At this time, we believe that severance taxes on logging will remain fairly constant over the next 3 to 5 years. Payment in Lieu of Taxes (PILT) The Borough receives PILT payments from the Federal Government, the Kodiak Island Housing Authority, and sometimes Alaska Housing. Only the Federal PILT funding is material. Federal PILT FY13 & FY14 estimated 2,000,000 - 1,500,000 1,000,000 1 1 1 1 11 500,033 0 I I E1 '1111 3 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 In FY2012 the Borough received $1,433,723 in PILT based on 2,819,561 acres of federal land within the Borough. The PILT program was not fully funded until FY2009. The FY2009 payment included funds that should have been paid in FY2008 which resulted in a large amount that was paid in FY2009. On October 3, 2008, Congress enacted the Emergency Economic Stabilization Act of 2008 (Public Law 110- 343) which authorized counties to receive their full PILT entitlement from 2008 through 2012. On July 6, 2012, the President signed the Moving Ahead for Progress in the 21st Century Act (Public Law 112 -141), which reauthorized the program for 2013. It is estimated that our PILT amount may decrease 5% in FY2014. The exact amount of our PILT revenues is not known at this time. Interest Earnings We expect that interest earnings will remain low through at least FY2014 and probably through FY2015. The Federal Government has set a threshold of having an unemployment rate of 6.5% or lower and an inflation rate of 2.5% or lower before rates are increased. The Borough invests most of its funds in agencies. These generally follow the treasury rate. The following chart shows the interest rates for treasuries at March 27, 2013. US Treasury Rates 3.50% 3.00% 2.50% 2.00% a 1.50% • - 00% II ! : i • • . 0.00 % J l tbs �o c� F ° c�c y 1 'ft ti A A 3A h ib J e` „S fly L � , � a � e O O The Borough can receive more in interest earning by going out longer but must be careful that interest rates may go up significantly in the not too distant future. Conclusion At this time the economy of the Borough remains very strong. Of all of the Borough's major revenue sources only interest earnings are in decline. While the Borough did significantly better than market in FY2012 we anticipate a drop in interest earnings in FY2013 which will continue through FY2014. The General Fund fund balance is adequate to mitigate a fairly large revenue shortfall in FY2014. The Borough can build its FY2014 budget on the assumption that revenues will remain strong. KODIAK ISLAND BOROUGH WORK SESSION Work Session of: aA-e // c20/3 Please PRINT your name Please PRINT yo C \W c „ \ A\ V/ ') Kodiak Island Borough MEMORANDUM TO: Honorable Mayor and Assembly ers of the Kodiak Island Borough THROUGH: Bud Cassidy, Borough Manager • • FROM: Karleton Short, Finance Director ' < SUBJECT: FY204 budget DATE: April 11, 2013 This is the suggested calendar of events. 1. At the April 25, 2013 work session we will have a joint meeting with the school district board. One of the items to discuss is the school district annual budget and Borough school district support. 2. At the April 25, 2013 work session we will present the budget for the General Fund, Special Revenue Funds, and the Debt Service Fund. 3. At the May 9, 2013 work session we will present the budget for capital projects, enterprise funds, and fees. 4. At the May 16, 2013 regular meeting we will make the PowerPoint presentation of the FY2014 budget, introduce the budget ordinance, and approve the fee resolution. The assembly will also approve a resolution on school district funding. 5. At the May 30 work session the Assembly will make a final review of the budget and staff will be prepared to answer any previous assembly questions. 6. At the June 6' regular meeting the final budget ordinance will be adopted. 1 1 1 1 1 KODIAK ISLAND BOROUGH 1 Letter to the Governing Board 1 Year Ended June 30, 2012 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Altman,Rogers, (/y-f�. ),(J� PUBLIC 1 C- O ACCOUNTANTS January 28, 2013 1 Members of the Assembly Kodiak Island Borough 1 Kodiak, Alaska Ladies and Gentlemen: We have audited the 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 1 Kodiak Island Borough, Alaska's for the year ended June 30, 2012, which collectively comprise the Kodiak Island Borough, Alaska's basic financial statements. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, 1 Government Auditing Standards, OMB Circular A -133, the State of Alaska Audit Guide and Compliance Supplement for State Single Audits, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated June 19, 2012. 1 Professional standards also require that we communicate to you the following information related to our audit. 1 Significant Accounting Policies and Transactions Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by Kodiak Island Borough, Alaska are described in Note I to the financial 1 statements. No new accounting policies were adopted and the application of existing policies was not changed during 2012. We noted no transactions entered into by the Borough during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in 1 the financial statements in the proper period. • Accounting Estimates 1 Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance 1 to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements were: 1 All Opinion Units: Management's estimate of the collectability of accounts receivable is based on historical collections. We evaluated the key factors and assumptions used to develop the collectability of 1 accounts receivable in determining that it is reasonable in relation to the financial statements taken as a whole. 1 1 1 425 G Street Suite 500 Anchorage, Alaska 99501 Phone 907 - 274 -2992 Fax 907 - 274 -2993 Offices in Juneau and Soldotna A Professional Corporation 1 Members of the Assembly Kodiak Island Borough Page 2 of 5 Government -Wide Opinion Unit: 1 Management's estimate of the useful lives and depreciation is based upon the expected life of an asset. We evaluated the key factors and assumptions used to develop the useful lives and ' depreciation expense in determining that it is reasonable in relation to the financial statements as a whole. • Government -Wide Opinion, Business -type Activities and Municipal Solid Waste Collection and Disposal Enterprise Fund Opinion Units: Management's uses estimates to calculate the liability for the post closure of the landfill. These ' estimates are based on engineering surveys. We evaluated the key factors and assumptions used to develop the estimation of the liability for the closure of the landfill to determine its ' reasonableness in relation to the financial statements taken as a whole. Other Matters 1 GASB Statement No. 63: Financial Reporting of Deferred Outflows and Inflows of Resources, and Net Position , This statement, effective for state and local governments for periods beginning after December 15, 2011, provides new guidance over financial reporting of deferred outflows and deferred inflows of resources and the statement of net position. Concepts Statement No.4, Elements of Financial Statements, introduced and defined the elements as a consumption of net assets by the government that is applicable to a future reporting period, and an acquisition of net assets by the government that is applicable to a future period, respectively. Additionally, the statement identifies net position (rather than net assets) as the residual of , all other elements presented in a statement of financial position. Financial Reporting for Deferred Outflows and Inflows of Resources: ' Amounts that are required to be reported as deferred outflows of resources should be reported in a statement of financial position in a separate section following assets. Examples of deferred outflows include deferred loss from sale and leaseback, grant expenditures paid in advance of meeting timing requirements, negative fair value of government hedge of a future transaction, or deferred debit amounts resulting from the refunding of debt. Similarly, the amounts that are required to be reported as deferred inflows of resources should be ' reported in a separate section following liabilities. Examples of deferred inflows include resources received in advance in relation to an imposed non - exchange transaction such as property taxes, , deferred gain from a sale - leaseback transaction or positive fair value of government hedge of a future transaction. Financial Reporting for Statement of Net Position: ' The statement of net position reports in the recommended format all assets plus deferred outflows of resources, less liabilities, less deferred inflows of resources an amount that equals net position. The statement of net position should report the residual amount as net position, rather than net assets, proprietary or fiduciary fund balance, or equity. ' 1 1 Members of the Assembly 1 • Kodiak Island Borough Page 3 of 5 Electronic Format of Audit Supporting Documentation For many clients this was the first year of implementation of the electronic workpaper format. In order to ' facilitate this transition and in an effort to make future - audits more efficient changes are necessary in the planning and preparation for the annual audit. Adjusted trial balances are necessary a minimum of ten days prior to the start of final fieldwork. This is necessary to ensure that the adjusted trial balance is ' properly uploaded to our system, that we can adequately plan and prepare the necessary audit programs and evaluate risk areas prior to the start of fieldwork. Additionally, we will be requesting that all audit supporting documentation, lead schedules and financial statements be in electronic format. In order to ' keep our increase in audit fees to a minimum, we would like to receive audit support in the Excel, Word or PDF common formats. Audit documentation should be organized by fund and by financial grouping. For 1 example, for each fund we would like to have a folder with the financial statements and supporting documentation for the account balances in the fund. This could include but is not limited to a grant reconciliation, grant award, quarterly reports, debt schedules or other applicable information to the fund. ' We appreciate your efforts in this transition. • Financial Statement Disclosures The financial statement disclosures are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit ' We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements ' Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. 1 During the course of our audit we noted the following misstatements that have been corrected by management: ' • A prior period adjustment was recorded to beginning fund balance in the State Capital Grants Capital Project Fund for $134,499 which related to prior year revenue and to reduce accounts receivable. • An adjustment to record interest expense of $67,622 in the Municipal Solid Waste Collection and Disposal Enterprise Fund. • An adjustment to reduce the grant receivable account in the Other Capital Projects Capital ' Project Fund by $28,907 to properly state accounts receivable. • An adjustment to increase the accounts receivable account in the Municipal Solid Waste Collection and Disposal Enterprise Fund by $68,400 1 1 1 1 1 Members of the Assembly • ' Kodiak Island Borough Page 4 of 5 Summarized below is a misstatement that management has determined to be immaterial, both individually and in the aggregate, to the financial statements as a whole. This misstatement was not corrected by management: • Stale dated checks are included in the bank reconciliation in the amount of $42,829 in the General Fund. Disagreements with Management For the purposes of this letter, a disagreement with management as a financial accounting, reporting or , auditing matter, whether or not resolved to our satisfaction that could be significant to the financial statements or the auditors' report. We are pleased to report that no such disagreements arose during the course of the audit. Management Representations We have requested certain representations from management that are included in the management , representation letter dated January 28, 2013. Management Consultations with Other Independent Accountants ' In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the Borough's financial statements or a determination of the type of auditors' ' opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. t Internal Control Matters See the June 30, 2012 financial statements, compliance section for definition and descriptions of deficiencies, significant deficiencies, material weaknesses and any reported findings. Accounting Assistance As part of our engagement we drafted the basic financial statements of the Borough from the Borough's accounting records; however, management of the Borough was involved in the drafting process and retains responsibility for the basic financial statements. ' Supplementary Information Accompanying the Financial Statements With respect to the supplementary information accompanying the financial statements, we made certain ' inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information ' is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. 1 1 1 1 Members of the Assembly Kodiak Island Borough Page 5 of 5 Major Issues Discussed with Management Prior to Retention We generally discuss a variety of matters, including the application of accounting principles and auditing ' standards, with management each year prior to retention as the Borough's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. ' This information is intended solely for the use of the audit committee and management of Kodiak Island Borough and is not intended to be and should not be used by anyone other than these specified parties. ' Sincerely, 0 4,444.) (? -4 • Anchorage, Alaska 1 1 1 1 1 1 1 1 1 1 1 1 KODIAK ISLAND BOROUGH Federal and State Single Audit Reports 1 and Supplementary Information Year Ended June 30, 2012 1 1 1 1 1 1 1 1 1 1 1 1 1 • 1 KODIAK ISLAND BOROUGH Table of Contents 1 1 Pages Report Required Under Government Auditing Standards Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 1 -2 1 Report and Schedules Required Under OMB Circular A-133 Independent Auditors' Report on Compliance With Requirements That ' Could Have a Direct and Material Effect on Each Major Program and on Internal Control Over Compliance in Accordance with OMB CircularA -133 and on the Schedule of Expenditures of Federal Awards 3 -5 Schedule of Expenditures of Federal Awards 6 1 Notes to the Schedule of Expenditures of Federal Awards 7 Federal Schedule of Findings and Questioned Costs 8 -10 Corrective Action Plan 11 1 State Single Audit Report and Schedule Independent Auditors' Report on Compliance With Requirements That Could Have a Direct and Material Effect on Each Major Program and On Internal Control over Compliance in Accordance with the State of Alaska Audit Guide and Compliance Supplement for State Single Audits and on the Schedule of State Financial Assistance 12 -14 1 Schedule of State Financial Assistance 15 -16 Notes to the Schedule of State Financial Assistance 17 State Schedule of Findings and Questioned Costs 18 1 1 1 1 1 1 1 1 1 (This page left blank intentionally) 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 REPORT REQUIRED UNDER ' GOVERNMENT AUDITING STANDARDS 1 1 1 1 1 1 1 1 1 Altman , Rogers [ 91 CERTIFIED BLIC a ACCOUNTANTS 1 Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 1 The Honorable Mayor and Members of the Assembly Kodiak Island Borough, Alaska Ladies and Gentlemen: We have audited the financial statements of the governmental activities, the business -type activities, the discretely presented component unit, each major fund and the aggregate remaining fund 1 information of Kodiak Island Borough, as of and for the year ended June 30, 2012, which collectively • comprise Kodiak Island Borough's basic financial statements and have issued our report thereon dated 1 January 28, 2013. 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. Internal Control over Financial Reporting Management of Kodiak Island Borough is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered Kodiak Island Borough's internal control over financial reporting as a basis for designing our auditing procedures for ' the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Kodiak Island Borough's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of Kodiak Island Borough's internal control over financial reporting. Our consideration of internal control over financial reporting was for the limited purpose described in the 1 preceding paragraph and was not designed to identify all deficiencies in internal control over financial reporting that might be significant deficiencies, or material weaknesses and therefore, there can be no assurance that all deficiencies, significant deficiencies, or material weaknesses have been identified. 1 However, as described in the accompanying Federal Schedule of Findings and Questioned Costs, we identified a certain deficiency in internal control over financial reporting that we consider to be a material weakness. 1 1 ' 1 1 425 G Street Suite 500 Anchorage, Alaska 99501 Phone 907 - 274 -2992 Fax 907- 274 -2993 Offices in Juneau and Soldotna A Professional Corporation 1 The Honorable Mayor and Members of the Assembly Kodiak Island Borough, Alaska A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely , mely basis. We consider the deficiency described in the accompanying Federal Schedule of Findings and Questioned Costs as Finding 12 -01 to be a material weakness. Compliance and Other Matters As part of obtaining reasonable assurance about whether Kodiak Island Borough's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, 1 regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. , Kodiak Island Borough's response to the finding identified in our audit is described in the Federal Schedule of Findings and Questioned Costs and the Corrective Action Plan. We did not audit Kodiak Island Borough's response and, accordingly, we express no opinion on them. This report is intended solely for the information and use of management, the Kodiak Island Borough 1 Assembly, others within the entity, federal awarding agencies and pass- through entities and is not intended to be and should not be used by anyone other than these specified parties. 1 Anchorage, Alaska January 28, 2013 1 1 1 1 2 • 1 1 1 1 1 1 1 1 1 1 REPORT AND SCHEDULES REQUIRED UNDER OMB CIRCULAR A -133 1 1 1 1 1 1 1 1 1 1 1 1 Altman Rogers C ERTIFIED PUBLIC ACCOUNTANTS 1 Independent Auditors' Report on Compliance With Requirements That Could Have a Direct and Material Effect on Each Major Program and on Internal Control Over Compliance in Accordance with OMB CircularA -133 and on the Schedule of Expenditures of Federal Awards 1 The Honorable Mayor and Members of the Assembly ' Kodiak Island Borough, Alaska Ladies and Gentlemen: 1 Compliance We have audited the Kodiak Island Borough's compliance with the types of compliance requirements described in the OMB Circular A -133 Compliance Supplement that could have a direct and material effect on each of Kodiak Island Borough's major federal programs for the year ended June 30, 2012. Kodiak Island Borough's major federal programs are identified in the 1 summary of auditors' results section of the accompanying Federal Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants ' applicable to each of its major federal programs is the responsibility of Kodiak Island Borough's management. Our responsibility is to express an opinion on the Kodiak Island Borough's compliance based on our audit. 1 Kodiak Island Borough's basic financial statements include the operations of its component unit, Kodiak Island Borough School District, which received $5,865,124 in federal awards which are ' not included in the schedule of expenditures of federal awards for the year ended June 30, 2012. Our audit, described below, did not include the operations of Kodiak Island Borough School District because it was subjected to a separate audit performed in accordance with OMB Circular 1 A -133. ' We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and • OMB Circular A -133, Audits.of States, Local Governments, and Non - Profit Organizations. Those standards and OMB Circular A -133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Kodiak Island Borough's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Kodiak Island Borough's compliance with those requirements. 3 1 425 G Street Suite 500 Anchorage, Alaska 99501 Phone 907 - 274 -2992 Fax 907- 274 -2993 Offices in Juneau and Soldotna A Professional Corporation 1 The Honorable Mayor and Members of the Assembly 1 Kodiak Island Borough, Alaska In our opinion, Kodiak Island Borough complied, in all material respects, with the requirements 1 referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2012. 1 Internal Control over Compliance Management of Kodiak Island Borough is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered Kodiak Island Borough's internal control over compliance with the requirements that could have a direct and material effect on a major federal program to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over 1 compliance in accordance with OMB Circular A -133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of Kodiak Island Borough's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal 1 control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of 1 compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in the internal control over compliance that might be deficiencies, significant deficiencies or material 1 weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. Schedule of Expenditures of Federal Awards We have audited the 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 Kodiak Island Borough as of and for the year ended June 30, 2012, and have issued our report thereon dated January 28, 2013, which contained unqualified opinions on those ' financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Kodiak Island Borough's financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A -133, Audits of States, Local Governments, and Non - Profit Organizations, and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial 4 1 1 The Honorable Mayor and Members of the Assembly Kodiak Island Borough, Alaska 1 statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling ' such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the financial statements as a whole. This report is intended solely for the information of management, the Kodiak Island Borough Assembly, others within the entity, federal awarding agencies, and pass- through entities and is not intended to be and should not be used by anyone other than these specified parties. 6246,14,4r (veer). January 28, 2013 ' Anchorage, Alaska 1 1 1 1 1 1 1 1 1 1 5 1 1 1 1 1 1 (This page left blank intentionally) 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 KODIAK ISLAND BOROUGH Schedule of Expenditures of Federal Awards 1 Year ended June 30, 2012 I Federal Pass- through Program CFDA Grantor's or Award Number Award Number Amount Expenditures 1 U.S. Department of Commerce - Passed through the State of Alaska, Department I of Military and Veteran Affairs: Tsunami Hazard Ready Program 11.467 09NOAA - GR34286 55,073 45.329 Remote Community Alert Systems 11.468 09 -NOAA- GR34287 141,703 6,704 I Total U.S. Department of Commerce 196,776 52,033 U.S. Department of Health and Human Services - Passed through the State of Alaska, Department of Health and Social Services - 1 Child Care Assistance 93.575 604 -12 -908 101,048 101.048 U.S. Department of Homeland Security - Passed through the State of Alaska, I Department of Military and Veteran Affairs: Middle School Gym Seismic Retrofit 97.039 1796.0009 346,500 124,511 Panamaroff Creek Road 97.036 FEMA 1865 -DR -AK 24.137 1,548 Panamaroff Creek Culverts 97.036 FEMA 1865 -DR -AK 22,998 1,016 I Road Shoulder Erosion and Culvert Repair 97.036 FEMA 1865 -DR -AK 41,425 424 Total U.S. Department of Homeland Security 435,060 127,499 I U.S. Department of Housing and Urban Development - Passed through the State of Alaska, Department of Commerce, Community and Economic Development - Plan for Long Term Care Facility 14.228 800739 90,000 88,662 I U.S. Department of Energy - Direct program - ARRA - Energy Efficiency and Conservation Program 81.128 DE- RW000119 50,000 10,883 I U.S. Department of the Interior - Direct Programs: Payments in Lieu of Taxes (BLM) 15.226 None 1,460,645 1,460,645 Payments in Lieu of Taxes (FWP) 15.226 None 188,268 188,268 I 1,648,913 1,648,913 Total federal financial assistance $ .2,521,797 2,029,038 I Reconciliation to federal source revenues in the Statement of Revenues, Expenditures and Changes in Fund Balances: Total Federal financial assistance $ 2,029,038 Federal awards included in this schedule that are recorded in the I Business -type activities and the Hospital Facilities Enterprise Fund: Plan for Long Term Care Facility 14.228 800739 (88,662) $ 1,940,376 1 See accompanying notes to Schedule of Expenditures of Federal Awards. 1 6 1 KODIAK ISLAND BOROUGH, ALASKA Notes to the Schedule of Expenditures of Federal Awards 1 Year Ended June 30, 2012 (1) Basis of Accounting The schedule of expenditures of federal awards includes the federal grant activity of Kodiak Island Borough and is presented on the modified accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A -133, Audits of States, Local Governments, and Non - Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic 1 financial statements. (2) Reporting Entity The Kodiak Island Borough, for purposes of the supplementary schedule of expenditures of federal awards includes all the funds of the primary government. It does not include the component unit of the Kodiak Island Borough as follows: The Kodiak Island Borough School District The Kodiak Island Borough's basic financial statements include $5,865,124 in federal awards expended for the Kodiak Island Borough School District, a component unit of the Kodiak Island Borough. These monies are excluded from this schedule. Separate reports on compliance and internal control dated November 14, 2012, were issued for the Kodiak Island Borough School.District. 1 (3) Non -Cash Awards During the year ended June 30, 2012, the Kodiak Island Borough received no federal awards in 1 the form of non -cash awards. (4) Retainages Payable , Retainages payable on contracts are not charged to the grants until they are paid to the 1 contractor. Accordingly, expenditures exclude amounts payable for retainages on contracts. 1 1 1 1 7 1 1 KODIAK ISLAND BOROUGH, ALASKA 1 Federal Schedule of Findings and Questioned Costs Year Ended June 30, 2012 1 Section I - Summary of Auditors' Results Financial Statements ' Type of auditors' report issued: Unqualified Internal control over financial reporting: Material weakness(es) identified? x yes no Significant deficiency(ies) identified? yes x no ' Noncompliance material to the financial statements disclosed? yes x no Federal Awards 1 Internal Control over major programs: Material weakness(es) identified ' (Section .510 (a)(1))? yes x no Significant defciency(ies) identified (Section .510 (a)(1))? yes x no Any material noncompliance with the provisions of laws, regulations, contracts, or grant agreements 1 related to a major program (Section .510(a)(2))? yes x no Type of auditors' report issued on compliance for major program: Unqualified Any audit findings disclosed that are required to be reported in accordance with OMB Circular A -133, Section .510(a) (3) or (4)? yes x no 1 Identification of major programs: CFDA Number(s) Name of Federal Program or Cluster 1 97.039 Hazard Mitigation Grant 15.226 Payments in Lieu of Taxes 1 Dollar threshold used to distinguish between • Type A and Type B programs: $ $300,000 1 Auditee qualified as low -risk auditee? yes x no • 1 8 1 1 KODIAK ISLAND BOROUGH, ALASKA Federal Schedule of Findings and Questioned Costs, Continued 1 Section 11 Financial Statement Findings 1 Finding 12 -01 Internal Control over Revenue /Receivables Material Weakness Condition: In the prior year the Borough misstated grant revenue and accounts receivable due to an error in a grant report. This error was discovered in the current year and resulted in a prior period adjustment in the State Capital Grants Capital Project Fund. ' Criteria: Grant reports should be reviewed prior to submittal to ensure that all information presented is correct. A report submitted in FY11 was not correct, which caused the Borough to overstate grant revenue and accounts receivable. Context: During our review of grant -to -date expenses we determined that the Borough had over expended a grant in the prior year and as a result, overstated grant income and grant accounts receivable. 1 Cause: A grant report was submitted without including all of the prior 1 year expenses. The Borough used this information to over accrue grant income and the associated accounts receivable. Effect: Grant income and grant accounts receivable was overstated by 1 $134,499 in FY11. This error was not discovered until FY12, which resulted in a prior period adjustment to the State Capital 1 Grants Capital Project Fund. Recommendation: We recommend that grant reports be reviewed to ensure that , they are completed correctly and include all prior year expenses and that grant revenue and the associated accounts receivable be periodically evaluated for accuracy. Management's Response: Management concurs with the finding. See corrective action plan. 1 1 1 9 1 1 KODIAK ISLAND BOROUGH, ALASKA 1 Federal Schedule of Findings and Questioned Costs, Continued 1 Section Ill - Federal Award Findings and Questioned Costs No matters were reported. Section IV Status of Prior Year Findings ' Financial Statement Findings Finding 11 -01 Internal Control over Capital Asset Additions 1 Significant Deficiency ' Condition: During the year, the Municipal Solid Waste Collection and Disposal Fund purchased a new loader. The Borough failed to properly capitalize this asset. 1 Status: Finding has been resolved in the current year. 1 Finding 11-02 Internal Control over Accounts Payable Significant Deficiency ' Condition: Accounts payable were not properly recorded at year end. Status: Finding has been resolved in the current year. 1 Finding 11 -03 Internal Control over Long term Advances Significant Deficiency Condition: The Facilities Special Revenue Fund has made numerous long ' term advances to other funds within the Borough. Yearly payments are required to be made to the Facilities Special Revenue Fund from the other funds to satisfy this debt. The 1 Borough failed to record two yearly payments from other funds. Status: Finding has been resolved in the current year. 1 1 1 • 1 10 1 KODIAK ISLAND BOROUGH, ALASKA Corrective Action Plan 1 Year Ended June 30, 2012 ' Finding 12-01 Internal Control over Revenue /Receivables i Name of Contact Person: Karleton Short, Finance Director Corrective Action: We will spend additional time reviewing all grant reports prior to ' submittal to ensure that all information presented is correct and ties • to the General Ledger Proposal Completion Date: Process will be implemented immediately. 1 1 1 1 1 1 1 1 1 1 1 11 1 1 1 1 1 1 1 1 1 STATE SINGLE AUDIT REPORT AND SCHEDULE 1 1 1 1 1 1 1 1 1 1 1 1 1 Altman, Rogers CERTIFIED a PUBLIC 1 ACCOUNTANTS Independent Auditors' Report on Compliance With Requirements That Could Have a Direct and Material Effect on Each Major Program and on Internal Control Over Compliance in Accordance with the State of Alaska Audit Guide and Compliance Supplement for State Single Audits and on the Schedule of State Financial Assistance 1 The Honorable Mayor and Members of the Assembly ' Kodiak Island Borough, Alaska ' Ladies and Gentlemen: Compliance 1 We have audited Kodiak Island Borough's compliance of with the types of compliance requirements described in the State of Alaska Audit Guide and Compliance Supplement for State Single Audits that could have a direct and material effect on each of Kodiak Island Borough's 1 major state programs for the year ended June 30, 2012. Kodiak Island Borough's major state programs are identified in the accompanying Schedule of State Financial Assistance and Notes to • the Schedule of State Financial Assistance. Compliance with the requirements of laws, 1 regulations, contracts, and grants applicable to each of its major state programs is the responsibility of Kodiak Island Borough's management. Our responsibility is to express an opinion on Kodiak Island Borough's compliance based on our audit. Kodiak Island Borough's basic financial statements include the operations of its component unit, Kodiak Island Borough School District, which received $32,566,436 in state awards which are not 1 included in the schedule of state financial assistance for the year ended June 30, 2012. Our audit, described below, did not include the operations of Kodiak Island Borough School District because it was subjected to a separate audit performed in accordance with the State of Alaska 1 Single Audit Guide and Compliance Supplement for State Single Audits. We conducted our audit of compliance in accordance with auditing standards generally accepted 1 in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and State of Alaska Audit Guide and Compliance Supplement for State Single Audits. Those 1 standards and the State of Alaska Audit Guide and Compliance Supplement for State Single Audits require that we plan and perform the audit to obtain reasonable assurance about whether ' noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major state program occurred. An audit includes examining, on a test basis, evidence about Kodiak Island Borough's compliance with those requirements and 1 performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of Kodiak Island Borough's compliance with those requirements. 1 12 1 425 G Street Suite 500 Anchorage, Alaska 99501 Phone 907 - 274 -2992 Fax 907- 274 -2993 Offices in Juneau and Soldotna A Professional Corporation 1 The Honorable Mayor and Members of the Assembly Kodiak Island Borough, Alaska ' In our opinion, Kodiak Island Borough complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major state programs for the year ended June 30, 2012. Internal Control over Compliance 1 The management of Kodiak Island Borough is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to state programs. In planning and performing our audit, we considered Kodiak Island Borough's internal control over compliance with requirements that could have a direct and material effect on a major state program in order to determine the auditing procedures 1 for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with the State of Alaska Audit Guide and Compliance Supplement for State Single Audits, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of Kodiak Island Borough's internal control over compliance. ' A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct noncompliance with a type of compliance requirement of a state program on a timely basis. A material weakness in internal control' over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a state program will not be prevented, or detected and corrected, on a timely basis. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in the internal control over compliance that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. Schedule of State Financial Assistance We have audited the 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 as of and for the year ended June 30, 2012, and have issued our report thereon dated January 28, 2013, which contained an unqualified opinion on those financial statements. Our audit was performed for the purpose of forming opinions on the financial statements that collectively comprise Kodiak Island Borough's financial statements. The accompanying schedule of state financial assistance is presented for purposes of additional analysis as required by the State of Alaska Guide and Compliance Supplement for State Single Audits and is not a required part of the financial statements. Such information is the responsibility 1 of management and was derived from and relates to directly to the underlying accounting and records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain other procedures, 13 1 1 The Honorable Mayor and Members of the Assembly 1 Kodiak Island Borough, Alaska ' including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the 1 United States of America. In our opinion, the schedule of state financial assistance is fairly stated in all material respects in relation to the financial statements as a whole. This report is intended solely for the information and use of management, Kodiak Island Borough Assembly, others within the entity, State of Alaska, other State awarding agencies and pass- through entities and is not intended to be and should not be used by anyone other than these specified parties. 1 afhtio; / / • Anchorage, Alaska January 28, 2013 1 1 1 1 1 1 1 1 • 1 1 14 1 1 1 1 1 1 1 (This page left blank intentionally) 1 1 1 1 1 1 1 1 1 1 1 1 1 1 ' KODIAK ISLAND BOROUGH Schedule of State Financial Assistance I Year ended June 30, 2012 1 Program Program or Award 1 Number Amount Expenditures I Department of Community and Economic Development - Direct Programs: Road Service Area Rehabilitation and Paving 09 -DC -567 2,500,000 362 Anton Larsen Dock 12 -DC -388 2,000,000 6 I - " Emergency School Generators 12 -DC -625 2,182,000 293,018 Tsunami Sirens, Upgrades, Replacements, Additions 07 -DC -329 100,000 21,278 Near Island Facility 07 -DC -510 500,000 26,861 Long Term Care Facility Planning and Design 12 -DC -389 1,275,000 8,872 Total Department of Community and Economic Development 8,557,000 350,397 Department of Administration - Direct Programs - * Senate Bill 81 PERS Supplement on- behalf payment None 341,630 341,629 1 Department of Education and Early Development - Direct Programs - $ 1 * Debt Retirement Program None 2,088,739 2,088,739 Department of Revenue: Direct Programs: * Fisheries Business Tax None 1,405,360 1,405,360 * State Revenue Sharing None 985,108 985,108 Commercial Passenger Vessel Tax None 32,622 32,622 * Fisheries Resource Landing Tax None 101,364 101,364 I Telephone /Electric Tax None 26,387 26,387 Liquor license None 12 12 Total Department of Revenue 2,550,841 • 2,550,853 I Department of Environmental Conservation - Direct Programs - "" Clean water Revolving Loan Funds 505041 None 8,645,000 1,317,600 1 (continued) 1 1 1 15 1 1 KODIAK ISLAND BOROUGH ' Schedule of State Financial Assistance, continued 1 Program Program or Award Number Amount Expenditures Department of Military and Veterans Affairs: Direct Programs: Middle School Gym Seismic Retrofit 1796.0009 115,500 41,504 Local Emergency Planning Committee 12LEPC- GR35602 19,018 19,018 Panamaroff Creek Road FEMA 1865 -DR -AK 8,046 516 Panamaroff Creek Culverts FEMA 1865 -DR -AK 7,666 338 Road Shoulder Erosion and Culvert Repair FEMA 1865 -DR -AK 13,808 141 Total Department of Military and Veteran Affairs 164,038 61,517 Department of Health and Social Services - Direct Programs - Child Care Assistance Program 604 -12 -908 4,648 4,648 Total State of Alaska $ 22,351,896 6,715,383 Reconciliation to State of Alaska revenues in the Statement of Revenues, Expenditures, and Changes in Fund Balances: Total State financial assistance $ 6,715,383 PERS supplement on- behalf recorded in enterprise funds (75,819) State awards included in this schedule that are recorded in the Business -type activities and the Hospital Facilities Enterprise Fund: Long Term Care Facility Planning and Design 12 -DC -389 (8,872) Clean Water Revolving Loan Funds received in the current year are not treated as revenue in the financial statements; however, they are required to be presented on this schedule by the State of Alaska Audit Guide and Compliance Supplement for State Single Audits. The loan is recorded in the Business -type activities and Enterprise Funds. (1,317,600) $ 5,313,092 1 See accompanying notes to the Schedule of State Financial Assistance. 1 1 1 16 1 1 KODIAK ISLAND BOROUGH, ALASKA Notes to Schedule of State Financial Assistance Year Ended June 30, 2012 (1) Basis of Accounting 1 This schedule was prepared on the modified accrual basis of accounting. ' (2) Reporting Entity The Kodiak Island Borough, for purposes of the supplementary Schedule of State Financial Assistance includes all the funds of the primary government. It does not include the component unit of the Kodiak Island Borough as follows: The Kodiak Island Borough School District ' The Kodiak Island Borough's basic financial statements include $32,566,436 of State of Alaska funds expended for the Kodiak Island Borough School District, a component unit of the Kodiak Island Borough. These monies are excluded from this schedule. These monies were subjected to State of Alaska single audit procedures and are subject of separate reports issued for the Kodiak Island Borough School District dated November 14, 2012. • ' (3) * Major State Programs for Compliance: ' Emergency School Generators Senate Bill 81 PERS Supplement On- behalf payment Debt Retirement Program 1 Fisheries Business Tax State Revenue Sharing Fisheries Resource Landing Tax (4) ** Clean Water Revolving Loan Funds Financial assistance received under this loan agreement is considered state assistance and is included when determining the threshold amount for a State Single Audit However, financial assistance received under this loan agreement is not subject to compliance testing under the ' State Single Audit. 1 1 1 1 17 1 1 KODIAK ISLAND BOROUGH , State Schedule of Findings and Questioned Costs 1 Year Ended June 30, 2012 1 Section I - Summary of Auditors' Results Financial Statements 1 Type of auditors' report issued: Unqualified Internal control over financial reporting: Material weakness(es) identified? x yes no Significant deficiency(ies) identified? yes x no , Is a material noncompliance disclosed? yes x no ' State Financial Assistance Internal control over major programs: , Material weakness(es) identified? yes x no Significant deficiency(ies) identified? yes x no 1 Type of auditors' report issued on compliance for major programs: Unqualified Dollar threshold used to distinguish a state major program: $ 100,000 1 Section II — Financial Statement Findings See Federal Schedule of Findings and Questioned Costs for Finding 12 -01. Section III — State Award Findings and Questioned Costs No matters were reported. 1 1 1 1 18