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CAFR FY20141 KODIAK ISLAND BOROUGH Comprehensive Annual Financial Report Year Ended June 30 , 2014 Official Issuing Report Karleton G. Short Finance Director KODIAK ISLAND BOROUGH TABLE O F CONTENTS INTRODUCTORY SECTION: Letter of Transmittal GFOA Certificate of Achievement Organizational C hart E lected Officials (Photographs) Borough Officials Map of Kodiak Is land Borough FINANCIAL SECTION: Independent Auditor's Report Management's Discussion and Analysis Basic Financial Statements: Government-wide Financial Statements: Statement of Net Po s iti on Statement of Activities Fund Financial Statements: Balance Sheet -Governmental Funds Jun e 30, 2014 Reco nciliation of Net Po siti on Between the Govemment-Wide and the Fund Financial Statements Statement of Revenues, Ex penditures, and C hanges in Fund Balances (Deficits)- Governmental Funds Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund · Balances (Deficits) of Governmental Funds to the Statement of Activities Statement of Net Position -Proprietary Funds -Business-Type Activities -Enterprise Funds Statement of Revenues, Expenses, and Changes in N et Pos ition -Proprietary Funds - Bus ines s-Type Acti vi ties -Enterprise Funds State ment of Cash Flows -Proprietary Funds -Business-Type Activities -Enterprise Funds Notes to Basic Financial Statements Required Supplemeutary Information: Budgetary Comparison Schedule -General Fund Budgetary Comparison Schedule -Special Revenue Fund -Education Support Budgetary Comparison Schedule -Special Revenue Fund -Facilities Notes to Required Supplementary Info rmati on -Budgetary Comparison Schedules Additional Supplementary Information: Budgetary Comparison Sc hedule -Debt Service Fund -Education and H ea lth Nonmajor Governmental Funds: Combining Balance Sheet Combining Statement of Revenues, Ex penditures, and C hanges in Fund Balances Nonmajor Special Revenue Funds: Co mbinin g Balance Sheet Page 1-4 5 6 7 8 9 10-12 13-22 23 24 25 26 27 28 29 30 31-32 33 -72 73 -74 75 76 77 78 79 80 81-84 KODIAK ISLAND BOROUGH TABLE OF CONTENTS, CONTINUED Additional Supplementary Information, continued Combining Statement of Revenues , Expenditures and Changes in Fund Balances (Deficits) Schedule of Revenues , Expenditures, and Changes in Fund Balance (Deficit)- Budget and Actual: Fire and Road Service Areas: Fire: Fire Protection Area No. I Womens Bay Fire Department Kodiak Airport Fire District Road: Monashka Bay Road Service Area Service Area No. I Womens Bay Road Service Area Bay V iew Road Service Area Service Area No.2 L.E.P.C. Land Sales Buildings and Grounds Woodland Acres Street Light Service Area Trinity Islands Street Light Service Area Tourism Development Mission Lake Tide Gate Fern Fuller Trust Trinity Islands Paving Oil Spill Disaster Nonmajor Capital Project Funds: Combining Balance Sheet Combining Statement of Revenues, Expend itures and Changes in Fund Balances Page 85-88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 (continued) E nterpri se Funds: KODIAK ISLAND BOROUGH TABLE OF CONTENTS, CONTINUED Schedule of R even ues , Expen ses, and C hanges in Net P o s iti o n -Budget and Actual: Municipal So lid Waste Collection and Di s posal Ho spital Facilities Kodiak Fisheries Research Center 91 I Services Fund Supplementary Bond Schedules: Summary of Bonded Debt Service Requirements to Maturity General Obli gation Bond , 2004 Series D -Retirement Schedule General Obli gation Bond , 2008 Series A -Retire ment Schedule General Obli gation Bond, 20 II Series One -Retirement Schedule General Obligation Bond , 2012 Series A -Retirement Schedule General Obligation Bond, 2012 Series B -Retirement Schedule General Obligation Bond , 2013 Series O ne -Retirement Schedule General Obligation Bond , 2014 Series One -Retirement Schedule STATISTICAL SECTION: Statistical Section Index Net Position by Component '--Last Ten Fiscal Years Changes in Net Position -Last Ten Fiscal Years Fund Balances of Governmental Funds -Last Five Fiscal Years Changes in Fund Balances of Governmental Funds -Last Ten Fiscal Years General Revenu es by Source -Last Ten Fiscal Years A ssessed and Es timated Actual Value of Taxable Property-Last Ten Fiscal Years Direct and Overlapping Property Tax Rates and Contribution s to the School Di strict - Last Ten Fiscal Years Property Tax Levies and Collections -Last Ten Fiscal Years Principal Property Tax Payers -Current Year and Ten Years Ago Ratios of Net Bonded Debt-Last Ten Fiscal Years Computation of Direct and Overlapping Debt Legal Debt Margin Information -Last Ten Fiscal Years Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Governmental Expenditures and Transfers -La st Ten Fiscal Years Ratios of Outstanding Debt by Type -Last Ten Fiscal Years Demographic and Economic Statistics -Last T en Fiscal Y ears Average Monthly Employment & Earnings -Last Ten Fiscal Years Miscellaneous Statistical Data -Last Ten Fiscal Years Property Value, Co nstruction and Bank Deposits -Last Ten Fiscal Years Full-Time Equivalent Borough Employees by FunctionlProgram -Last Ten Fiscal Years Operating Indicators by Function -Last Ten Fiscal Years Capital Asset Statistics by Function/Program -Last Ten Fiscal Years 109 110 I II 112 113 114 I IS 116 I 17 I 18 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 (This page was left blank intentionally) INTRODUCTORY SECTION ~ , , I --1 I J . , . grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government's internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of State and federal awards. These reports are available in the Borough's separately issued Single Audit Report. GAAP require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analy sis (MD&A). This letter of transmittal is de signed to complement MD&A and should be read in conjunction with it. The Borough 's MD&A can be found immediately following the report of the independent auditors. ProfIle ofthe Government The Kodiak Island Borough lies at the western border of the Gulf of Ala ska, approximately 40 miles south of the Kenai Peninsula. Kodiak Island is the largest island in Alaska and the second largest in the United States. About two-thirds of the Borough lies in the Kodiak archipelago with the remaining third on the Alaska Peninsula, across the Shelikof Strait from Kodiak Is land. The Shelikof Strait is only 20 miles wide in pl aces . The Borough encompasses 7,130 square miles, making it slightly smaller than the State of Massachusetts and serves a population of 13,824. The Borough was incorporated September 30, 1963, as a Second Class Borough by Chapter 146 Sessions, Laws of Alaska 1961 , as amended. The powers granted to the Borough include area- wide powers and non area-wide powers. Area-wide powers are health, education, planning and zoning, emergency services planning, and assessment and collection of taxe s for both the Borough and cities within the Borough. Non area-wide powers include parks and recreation , economic development, solid waste disposal , animal control , fire protection, street lighting and road maintenance and construction. A Manager form of government governs the Borough. The Mayor is elected at large while the Borough Assembly appoints the Manager. The Assembly is composed of seven members who are elected at-large. The Borough provides a full range of services including fire protection, the construction and maintenance of roads and other infrastructure, community and economic development, health, culture and recreation and solid waste collection and disposal. The Borough also is financially accountable for a legally separate school district which is reported separately within the Borough's financial statements. Additional information on this legally separate entity can be found in the basic financial statements. The annual budget serves as the foundation for the Borough 's financial planning and control. All departments of the Borough are required to submit requests for appropriation to the Borough Manager. The Borough Manager uses these requests as the starting point for developing a proposed budget. The Borough Manager then presents this proposed budget to the Assembly for review by April 30. The assembly is required to hold public hearings on the proposed budget and to adopt a final budget by no later than June 10. The appropriated budget is prepared by fund and department. The Assembly makes appropriation transfers between funds and/or departments only after the adoption of an ordinance . Borough staff may execute transfers between line items 2 within a department. Amendments to the budget can occur anytime during the fiscal year through the Borough Assembly or administrative action. Expenditures may not legally exceed appropriations at the following levels: Capital Project Funds -project level, all other funds - department level. All funds , except Capital Project Funds, are budgeted on an annual basis encompassing a fiscal year. Budgets of Capital Project Funds generally encompass the period from start-up to project completion, which is generally greater than one year . Budget-to-actual comparisons are provided in this report for each individual governmental and proprietary fund for which an appropriated annual budget has been adopted. For the General Fund , the Education Support Special Revenue Fund and the Facilities Special Revenue Fund , this comparison is presented on pages 73-76 as part of required supplementary information . For governmental funds, other than the General Fund , the Education Support Special Revenue Fund and the Facilities Special Revenue Fund, this comparison is presented in the additional supplementary information subsection of this report, which starts on page 78. Also included in the additional supplementary information subsection are the Education and Health Debt Service Fund budget to actual. For proprietary funds , this comparison is presented in the proprietary funds subsection of this report, which starts on page 109 . Factors Affecting Financia l Condition The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the Borough operates. L ocal eco n omy. The economic condition of the Kodiak Island Borough remains healthy . The main industries of the Borough are commercial fishing , logging, and tourism. The commercial fishing industry in Kodiak has been very strong. Severance taxes on seafood increased from $980 ,109 in FY2005 to $1 ,715 ,496 in FY2014, a 75% increase. Logging has increased over the last ten years from $17,013 to $96 ,014 but it is not a material revenue source . Tourism continues to be strong in Kodiak. Bed tax revenues have increased from $20 ,886 in FY2005 to $75 ,042 in FY2014, an increase of259%. Considering today's economy this is very good. To accommodate this demand , construction of fishing lodges , bed and breakfast accommodations and recreational facilities has increased along with an increase in charter boat and guide operations. Cruise ships continue to visit Kodiak. The Kodiak Island Borough is also home to the aerospace industry , which began with construction of the Kodiak Launch Complex in 1998. Owned by the Alaska Aerospace Development Corporation (AADC), a public corporation of the State of Alaska, the Kodiak Launch complex is the first complete launch facility built in the United States since the 1960's and the first not owned by the Federal Government. The state-of-the-art facility includes a launch control center, payload processing facility , spacecraft assembly building and launch pad. It is designed to handle small to medium sized rockets used to launch low earth orbit satellites, as well as military, scientific and research missions. Kodiak is home to the largest U.S. Coast Guard base in the country, employing nearly 1,350 people and providing vital services to the marine industries that are an integral part of Kodiak's make-up as well as making a significant contribution to the Kodiak community. 3 The seafood industry is by far the largest industry in the Kodiak Island Borough. This industry includes commercial fishing, fisheries research, management and enforcement, seafood processing, and maintenance and support services. Kodiak is home to the largest port in the State, housing over 500 commercial vessels and consistently ranks among the top ten ports in the United States in terms of amount and value of product delivered. In 2012393,000,000 pounds of sea food was landed with a value of$148,086,957. Employment varies throughout the year with July , August, and September being the peak months due to the increased activity in the fisheries and related businesses , and then declines in November and December when fishing quotas are reached. The local unemployment rate has fluctuated from 5.2% to 8.3% over the last ten years, but the overall average has remained around 6.7%. Long-term financial planning. Every year the Borough adopts a five-year strategic plan. In this plan the Borough decides what its goals and objectives are for the next five years. The Borough breaks these goals out based on our Mandatory and Adopted powers. To view the complete Strategic plan you can visit our web site at www.kodiakak.us. Awards and Acknowledgemen ts The Government Finance Of ficers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the Borough for its comprehensive annual financial report (CAFR) for the fiscal year ended June 30 , 2013. This was the twenty-fourth consecutive year that the Borough has received this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readab le and efficiently organized comprehensive annual financial report . This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff of the administration and finance department. We would like to express our appreciation to all members of the department who assisted and contributed to the preparation of this report. Cred it must be given to the mayor and the assembly for their unfailing support for maintaining the highest standards of professionalism in the management of the Borough 's finances. Respectfully submitted , Charles E . Cassidy Jr. Borough Manager Karleton G . Short Director of Finance 4 Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to Kodiak Island Borough Alaska For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2013 Executive Director/CEO 5 Kodiak Island Borou g h FY 2014 Electorate F I Bo r ough Mayor Borough Assembly I I Borough Manager II II Borough Attorney II II II Borough Clerk Grant Writer! Spec Proj Support I I Resource Mgt Officer Deputy CJerk HR Officer / Executive Assistant Assis t ant Clerk Eng i neeri ng/Faci lities I Fire Chief I I Assessing I Community Development I Finance / Mis I I I Director Mai ntenance Coordinator Assesso r Direct o r Director Maintenance Mechan ic Property Appraiser Associate Planner Finance Secretary III Appraiser Technician Associate Planner Ge neral Accountant Ba ler Appraiser Tec h nician Co de En f orcement Officer Acco unti n g Tec h/AP Ba ler/la ndfil l Supervisor Assessment Clerk I Secretary 111 Accounting Tech/ Ba ler Op H Payroll Ba ler Op I Baler Op I Revenue Accountant Baler Op I Cashie r Ba ler Op I KFRC MIS Interpretive Spec/Rec. IT Supervisor Interp retive Spec./Rec. Programmer/Ana lyst M ai nt e nan ce Engineer GIS Analyst Pro jec t s PC Tec h It Pr oject Ma nage r /I nsp . Constructi on Insp./En gr Secretary II I Pr oject Ma nage r Project Ass ista nt Secretarv III 6 Carol Austerman '16 Aaron Gri ffi n ' 15 Chris Lynch ' 15 Frank R. Pete rson' 16 KODIAK ISLAND BOROUGH KODIAK, ALASKA BOROUGH OFFICIALS YEAR ENDED JUNE 30, 2014 MAYOR Jerro l Friend' 14 ASSEMBLY MANAGEMENT Tuck Bonne y' 14 Dave Kaplan' 14 Mel Stephens' 14 Charles "Bud" Cassidy ........................................................................................... Borough Manager Karleton G . Short ..................................................................................... Finance Director/Treasurer Robert Tucker ............................................................................. Engineering and Facilities Director Nova Javier, CMC ....................................................................................................... Borough Clerk Bill Roberts ............................................................................................................ Borough Assessor Robert A. Himes ................................................................................................................. Fire Chief Levesq ue Law Group, LLC ...................................................... Borough Attorne y (Contracted Firm) Stuart McDonald ............................................................................... Superintendent, School District Dria Bray-Ho ll oway ............................................................................................ General Accountant Dora Cross ................................................................ , ........................................ Revenue Accountant Paul Van Dyke .............................................................................................................. IT Supervisor Lauri Whiddon ....................................................................... : ......... HR OfficerlExecutive Assistant 8 (This page was left blank intentionally) J J J , . FINANCIAL SECTION Altman, Roger~IED (".3 Go I PUBLIC e;-. ACCOUNTANTS Independent Auditor's Report The Honorable Mayor and Members ofthe Assembly Kodiak Island Borough Kodiak, Alaska Report on the Financia[ Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the Kodiak Island Borough, as of and for the year ended June 30 , 20[4, and the related notes to the financial statements, which collectively comprise the Borough's basic financial state ments as listed in the table of contents . Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles general[y accepted in the United States of America; this includes the design , implementation , and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the stan dards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity 's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements . [0 425 G Street Suite 500 Anchorage, Alaska 99501 Phone 907-274 -2992 Fax 907-274-2993 Offices in Juneau and Soldotna A Professional Corporation The Honorable Mayor and Members of the Assembly Kodiak Island Borough We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the discretely presented component unit, each major fund , and the aggregate remaining fund information of the Kodiak Island Borough, as of June 30, 2014 , and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America . Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis on pages 13-22 and the Budgetary Comparison Schedules and notes to RSI on pages 73-77 be presented to supplement the basic financial statements. Such information , although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance . Othe r Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Kodiak Island Borough 's basic financial statements. The information listed in the table of contents as "Additional Supplementary Information", which includes Budgetary Comparison Schedule - Debt Service Fund -Education and Health, Nonmajor Governmental Funds: Combining Balance Sheet and Combining Statement of Revenues, Expenditures, and Changes in Fund Balances, Nonmajor Special Revenue Funds: Combining Balance Sheet, Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Deficits), and Schedules of Revenues, Expenditures, and Changes in Fund Balance (Deficit) -Budget and Actual , Nonmajor Capital Project Funds: Combining Balance Sheet and Combining Statement of Revenues , Expenditures and Changes in Fund Balances are presented for purposes of additional analysis and are not a required part ofthe basic financial statements. II ,-, The Honorable Mayor and Members of the Assembly Kodiak Island Borough The Additional Supplementary Information listed above is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Additional Supplementary Information listed above is fairly stated, in all material respects, in relation to the basic financial statements as a whole. The Introductory Section, the Supplementary Bond Schedules and the Statistical Section, as identified in the table of contents , have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them. Otber Reporting Reqnired by Govemment Auditing Standards In accordance with Government Auditing Standards , we have also issued our report dated December 31, 2014 on our consideration of the Kodiak Island Borough's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations , contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over fmancial reporting or on compliance . That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Kodiak Island Borough's internal control over financial reporting and compliance. /) . . a .. -. I-&1, ~,~ Anchorage, Alaska December 31,2014 12 (This page was left blank intentionally) KODIAK ISLAND BOROUGH Management's Discussion and Analysis June 30, 2014 As management of the Kodiak Island Borough , we offer readers of these financial statements this narrative overview and analysis of the financial activities of the Kodiak Island Borough for the fiscal year ended June 30 , 2014 . We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages I -4 of this report. Financial Highlights • The assets of the Kodiak Island Borough exceeded it s liabilities at the close ofFY20 14 by $175 ,412,469. Of this amount, $58 ,869 ,7 19 (unrestricted net position) may be used to meet the Borough 's ongoing obligations to c iti zens and creditors. • In FY2014 the Borough 's total net pos ition increased by $13,110,572 . • Equity in our central trea sury decreased $11 ,792 ,274. This decrease was mainl y due to capital expenditures. • At the end of the current fiscal year, the Borough 's governmental funds reported combined fund balances of $72,318,860. Thi s wa s a decrease of $3 ,497,624 , compared to the net cbange in the prior year of an increase of $20 ,645 ,7 19. At the end of FY20l4, unassigned fund balance for the general fund was $3,502,489 . This was 57% of total general fund expenditures . • The Borough 's bond s payable increa sed by $20,991 ,44 2. Thi s was due to th e issuance of a $22,660 ,000 general obligation bond with a premium of $2 ,427,432 le ss payments of $4 ,095 ,990 in bond principal and premium. Overview of the Financial Statements Gover nme nt wide Financial Statements The government wide financial statements are des igned to provide readers with a broad overview of the Kodiak Island Borough 's finances , in a manner simi lar to a private sector business . The statement of net position presents information on all of the Kodiak Island Borough 's assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Kodiak Island Borough is inlproving or deteriorating . The statement of activities presents information showing how the government's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. T hus , revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods. Both of the government wide financial statements distinguish functions of the Kodiak Island Borough that are principally supported by taxes and intergovernrnental revenues (governrnental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business -typ e activities). The governrnental activities of the Kodiak Island Borough include general government, public safety, community and economic development, emergency preparedness , health and sanitation , education, culture and recreation , parks and recreation , service district maintenance , and primary and secondary ed ucation. The business-type activities of the Kodiak Island Borough include a so lid waste collection and disposal faci lity , a Borough owned hospital , the Kodiak Fisheries Research Center, and a 911 emergency system . 13 KODIAK ISLAND BOROUGH Management's Discussion and Analysis , Continued The government wide financial statements include not only the Kodiak Island Borough itself (known as the primary government), but also the legally separate sc hool district for which the Kodiak Island Borough is financially accountable. Financial information for this component unit is reported separately from the financial information presented for the primary government itself. The government wide financial statements can be found on pages 23-24 of this report. Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Kodiak Island Borough, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance related legal requirements. All of the funds of the Kodiak Island Borough can be divided into two categories: governmental funds and proprietary funds. Governmental Funds -Governmental fund s are used to account for essentially the same functions reported as governmental activities in the government wide financial sta tements. However, unlike the government wide statements, govermnental fund financial sta tements focus on near-term inflows and outflows of spendable resources as well as on balances of spendable resources available at the end of the fiscal year . Such information may be useful in evaluating a governmen t's near-ternl financing requirements. Because the focus of governmental funds is narrower than that of the government wide financial statements, it is usefu l to compare the information . presented for governmental funds with similar information presented for governmental activities in the government wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and govermnental fund statement of revenues , expenditures, and changes in fund balances provide a reconciliation to facilitate this compar ison between governmental funds and governmenta l activities. The Kodiak Island Borough maintains 30 individual governmental funds. Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues , expenditures, and changes in fund balances for the General Fund, the Education Support Specia l Revenue Fund , the Facilities Special Revenue Fund, the Education and Health Debt Service Fund, and the Kodiak High School Renovation Capital Project Fund, and the Renewel and Replacement Projects Capital Project Fund , which are all considered to be major funds. Data from the other nonmajor funds are combined into a single, aggregated presentat ion. Indiv idual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in the supplementary information section of this report. The Kodiak Island Borough adopts an annual appropriated budget for its General Fund, Special Revenue Funds and Debt Service Fund. Budgetary comparison statements have been provided for the funds to demonstrate compliance with this budget. The ba sic governmental financial statements can be found on pages 23-32 of this report. Proprietary F unds -The only Proprietary Fund type that the Kodiak Island Borough uses is enterprise funds. Enterprise funds are used to report the same functions presented as business type activities in the government wide financial statements. Proprietary Funds provide the same type of information as government wide financial statements, only in more detail. The Kodiak Island Borough uses enterprise funds to account for a solid waste collection and disposal facility , a Borough owned hospital leased to the Sisters of Providence d .b.a. Providence Kodiak Island Medical Center, rents and utilities of the Borough owned Kodiak Fisheries Research Center, and 911 phone charges and expenses. 14 • I KODIAK ISLAND BOROUGH Management's Discussion and Analysis, Continued The Kodiak Island Borough adopts an annual appropriated budget for its proprietary funds. Budgetary comparison statements have been provided for the funds to demonstrate compliance with the budget. The basic Proprietary Fund financial statements can be found on pages 29-32 of this report. Notes to the Basic Financial Statements -The notes provide additional infonnation that is essential to a full understanding of the data provided in the government wide and fund financial statements. The notes to the basic financial statements can be found on pages 33-72 of this report. Other Information -In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary infonnation including budgetary comparison schedules for the General Fund , the Education Support Special Revenue Fund and the Facilities Special Revenue Fund. Required supplementary infonnation can be found on pages 73-77 of this report. Government wide Financial Analysis Statement orNet Position As noted earlier, net position may serve over time as a useful indicator of a government's fmancial position . In the case of the Kodiak Island Borough, assets exceeded liabilities by $175,412,469 at the close of FY2014, the most recent fiscal year. The net position of the component unit were $7,485,028 at the close ofFY2014. The largest portion of the Kodiak Island Borough 's net position ($1 16 ,542,750 or 66%) reflects its investment in capital assets (e.g. land, buildings , equipment and infrastructure) net of related debt. The Kodiak Island Borough uses these capital assets to provide services to citizens; consequently, these capital assets are not available for future spending. Although the Borough's investment in capital assets is reported net of debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. Governmental Business-type Activities Activities Total 2014 2013 2014 2013 2014 2013 Current and other assets $ 81 .695,355 79 ,790,040 22 ,131,673 35,122,305 103 ,827,028 114 ,9 12 ,345 Capital assets 131 ,424 ,119 100 ,052,704 65,293,662 47,791,787 196 ,717,781 147 ,844,491 Total asset s $ 213 ,1 19,474 179,842,744 87,425,335 82 ,914,092 30 0,544 ,809 262 ,756,836 Long-term liabilities _ $ 72 ,178,195 51,746,354 32,003,516 31 ,293,294 104 ,181 ,7 11 83 ,039,648 Other liabi lities 14 ,027,297 8,172,957 6,923,352 9,242,334 20 ,950,649 17 ,415 ,29 1 Total1iabilities $ 86,205,492 59,919,311 38 ,926,868 40 ,535,628 125,132 ,360 100 ,454,939 Net position : Net invest ment in capital assets $ 80,159 ,5 21 72 ,773 ,598 36 ,383 ,229 21,628 ,143 116 ,5 42,750 94 ,401 ,741 Unrestricted 46 ,7 54,461 47 ,149,835 12 ,115 ,2 58 20,750,321 58 ,869,719 67,900,156 Total net position $ 126 ,913,982 119 ,923,433 48 ,498,487 42,378,464 175 ,412,469 162 ,301,897 For more detailed infonnation see the Statement of Net Position on page 23. The remaining balance of unrestricted net position, $58 ,869 ,719, may be used to meet the Borough's ongoing obligations to citizens and creditors. 15 KODIAK ISLAND BOROUGH Management's Discussion and Analysis, Continued Statement of Activities The following condensed table of chan ges in net position di splays the re venues and expenses for the current and pri or year. Gowrnmenlal .cti~tie5 BU3inC5S-!l:e: acth'des ToW 2014 2013 2014 2013 2014 1013 Revenues: Program revenues : Ourrges furscrvices S 70 1,999 657,025 5,267.289 4,827,538 5,969,288 5,484,563 Operatin g grants and contrib ution s 4,On,5 10 2,917 ,662 85,634 4,077,'10 3,003,296 Capital grants 6,651,737 2,2 12,524 5,538,038 5,984,095 12,189,775 8,196,6 19 General revenues : Property t axes 13,741 ,190 12,910,5 12 13,741 ,190 12,910,5 12 Grants and entitlements not res tricted 10 s pecific programs 4,142,583 4,458,203 4,142,583 4,458,203 Land sales 864,584 864,.'584 Severance ta)OOs 1,843,8 19 1,774,700 1,843,8 19 1,174,700 Other ""'.S46 383,877 598,162 78,688 1,104,708 462,565 Investment earnings 1,106,7 17 528,676 178,851 117 ,702 1,285,568 646,378 Total revenues 33,636,685 25,843,179 11,582,340 11 ,093,657 45,219,025 36,936,836 ElIpenses: Genem l government 6,990,640 7.398,899 6,990,640 7,398 ,899 Public safety 751,637 644 ,I 'i11 75 1,63 7 644,I'i11 ConnM.mity and economic development 964 ,377 1,070,991 964 ,3 77 1,010,991 E'mergency preparedness 12 ,487 278,480 12,487 278,480 Health and sanit a t ion department 326,700 290,800 326,700 290.800 Education , culture and recreation 2 18 ,013 84,273 218,013 84,273 Parks and recreation 37,795 2 1,100 37,795 21,100 Service district maintenance 631,572 479,264 631,572 479,264 Primal)' an d secondal)' education 14 ,523,m J3 ,930,919 14,523,509 13,930,919 Interest on kmg.tenn debt 2,109,>W6 1,254,225 2,109,406 1,254,225 Municipal solid waste eoUection and d is pos a l 2,080,864 2,342,006 2,080,864 2,342,006 Ho s pital facilities 1,740,525 1,091,035 1,740 ,525 1,091 ,03 5 Kodiak Fisheries Re search Center 1,68 1,111 1.715,062 1,68 1.111 1.775,062 911 services 39,8 17 87,596 39,8 17 87.596 Total expenses 26,566,136 25,453,148 5,542,317 5,295,699 32,108,453 30,748,847 ClJ.a nge in net position before tmn s fers 7,070,549 390,031 6,040,023 5,7'i11,958 13,110,572 6,187,989 Transfers (80.000) (80,000) 80.000 80.000 Oumge in net p o s ition 6,990,549 3 10,03 1 6,120 ,023 5,8n,9j8 13,11 0,572 6,187,989 Net position, beginning of year, as previou s ly stated 119,923 ,43 3 133,550,817 42,..378,464 36,500,506 162,301 ,897 170,05 1,323 o.lfnm.llative effect oCa change in accoun t ing principle (196,453) Prior period adjus tment (1 3,740,962) (13,740,962) Net pos ition , beg innin g of year, a s re s tated 11 9,923,433 119,6 13,402 42,378,464 36,500,506 162,301,897 156,11 3,908 Net pos it ion, end of year S 126,9 13,982 119.923,433 48,498,487 42,378,464 175,412,469 162,301,897 Governmental activities increased the Kodiak Island Borough 's net pOSItIOn by $6,990,549. The major differences in revenue s were an increase of $5,599,061 in operating and capital grants due to successful grant applications, an increase of $830,678 in property taxe s due to increased assessed values and an increase in investment earnings of $578,041 due to longer investment maturities. There were some major changes in expenses including an increase of $855,181 in interest on long term debt due to issuance of general obligation bonds , and an increase of $592,590 in primary and secondary education caused by an increase in non-capital expenditures. 16 KODIAK ISLAND BOROUGH Management's Discussion and Analysis, Continued The General Fund is the main operating fund of the Kodiak Island Borough. At the end of the current fiscal year, nonspendable fund balance of the General Fund was $1 ,459 with an unas s igned fund balance of $3,502 ,489 for a total fund balance of $3,503,948. As a mea s ure of the General Fund 's liquidity, it may be useful to compare fund balance to total expenditures. Unassigned fund balance represent s 57% of total General Fund expenditures. The fund balanc e of th e Kodiak Is land Borough 's General Fund increased by $156 ,962 during the current fiscal year. While overall there was no significant change it is worth noting an increase of $109,700 in federal payments in lieu of taxes , a decrease in state revenue sha ring of $311 ,11 7, a decrease of $100 ,717 in state fisheries bu s ines s tax, a decrease in general administration and administration expenditures of $286 ,424 and an increase of$135,264 in management information services . The fund balance of the Kodiak Island Borough 's Facilities Special Revenue Fund increa sed by $133, I 05 during the current fiscal year. The key factor leading to thi s minimal increase was increa sed investment earnings compared to the prior year. The fund balance of the Education Support Special Revenue Fund decreased by $184,223 during the current fiscal year. The key factor leading to thi s change were increases in capital outlay to the School District. The fund balance of th e Fire Protection Area No. I increased by $172 ,894 . The key factor leading to thi s increa se wa s not s pending mo nies budgeted for capital outlay. The fund balance of Womens Ba y Road Service Area increa se d by $67,567. The key factors leading to thi s increase were lower snow removal and repair and maintenance costs. The fund balance of Land Sales increased $50,315. The key factor leading to this increase wa s a land sale. The fund balance of the Fern Fuller Trust decreased $64,207 . The key factor leading to thi s decreas~ was low interest earnings. The fund balance of the Kodiak Island Borough's Renewal and Replacement Projects Capital Project Fund decreased by $936,578 during the current fiscal year. The key factor leading to this was a budgeted use of assigned fund balance to balance the FY20 14 budget. The fund balance of the Kodiak Island Borougb 's Kodiak High School Renovation Capital Project Fund decreased by $2 ,933,587 during the current fiscal year. Tbe key factor leading to this decrea se was a budgeted use of assigned fund balance. Proprietary Funds -The Kodiak Island Borough 's proprietary funds provide the same type of information found in the government wide financial statements, but in more detail. Net position of the Municipal Solid Waste Collection and Disposal Enterprise fund amounted to $16 ,846 ,5 88, the Hospital Facilities Enterprise Fund amounted to $21,263 ,713 , the Kodiak Fisheries Researcb Center Enterprise Fund amounted to $10 ,388,186 and the 911 Services Enterprise Fund amounted to $0. The total increase in net position for the Municipal Solid Waste Collection and Disposal Enterprise Fund was $6,032,820. The total decrease in net position for the Hospital Facilities Enterprise Fund was $121 ,997 . The total increase in net position for tbe Kodiak Fisheries Research Center Enterprise Fund was $209,200. The total change in net po sit ion in the 911 Service Enterprise Fund was $0. Other factors concerning the finances of these four funds have already been addressed in the discussion of the Kodiak Island Borough's business-type activities. 18 KODIAK ISLAND BOROUGH Management 's Di scussion and Anal ysi s, C ontinued • Severance taxes for mining were $22,309 more than budgeted. This was due to an estimation error when the budget was devel o ped. • Penalties and interest on taxes were $71,942 le ss than budgeted . This was due to fewer late tax payments . • State shared revenue s were $23 ,675 more than budgeted. This was due to an increa se in the State's budget for aid to the various political subdivisions of the State . • The Borough 's share (50%) of state raw fish tax was $103,692 less than budgeted. This was due to an estimation error in harvest of wild fish. • State on-behalf P ERS payments were $37,543 more than budgeted. This was due to an estimation error when the budget was developed . • Federal payments in lieu of taxes were $315 ,152 more than budgeted. Thi s wa s due to an estimation error when the budget was developed. • Federal fi sh and wildlife revenue sharing were $55 ,518 more than budgeted . Thi s was due to an estimation error when the budget was developed . • Building permit revenues were $19 ,661 over budget. This was due to an estimation error when the budget was developed . • Investment income was $76,196 less than budgeted . This wa s due to an overall decrea se in the market in the current year. • The General Admini stration department came in $68 ,163 under budget. This was due to lower insurance costs. • The Borough Manager department came in $60,661 under budget. This was due to vacant positions. • The Borough Clerk department came in $43 ,049 under budget. Thi s was due to vacant positions, reduced records management costs, and other. • The Management Information Systems department came in $62 ,647 under budget. Thi s was due to vacant positions and not purchasing all budgeted equipment expenditures. • The Community Development department came in $140 ,579 under budget. This was due to vacant positions . • The Parks and Recreation department came in $157,205 under budget. Thi s was due to lack of staff to supervise projects . • The Emergency Preparedness department was $42,013 under budget. This was due to contracted services coming in under budget. Capital Assets and Debt Administration Capital Assets -The Kodiak Island Borough's investment in capital assets for its governmental and business - type activities as of June 30, 2014, amounted to $196 ,717,741 (net of accumulated depreciation). This investment in capital assets includes, land , buildings and improvements, improvements other than buildings , machinery and equipment, and construction work-in-progress. The total net increase in the Kodiak Island Borough 's investments in capital assets for the current fiscal year was $48,873,250 which was mostly due to increases in construction work in process . 20 KODIAK ISLAND B OROUGH Ma nage ment's Di sc uss io n and A na lys is, Continu ed T he fo ll ow ing ta bl e d ispl ays the capi ta l assets (net of acc umul ated d eprec iati on) fo r th e curre nt year. Gove rnm e n ta l B usin ess-ty p e acti viti es acti\'iti es To ta l 2014 2013 2014 2013 2014 2013 Artwork $ 16 ,09 1 16,09 1 16,09 1 16,09 1 Land 23,272 ,788 23,46 7,3 04 1,66 1,499 1,66 1,499 24 ,934,287 25,128 ,803 Con stru ction work-in-pro gres s 47,862 ,997 12,6 04,89 7 40 ,07 4,74 2 20 ,790 ,509 87 ,937,739 33 ,39 5,406 Buildi ngs and improveme nts 44 ,588 ,590 47 ,085,28 3 20 ,38 7,522 2 1,782 ,249 64 ,9 76 ,11 2 68 ,8 67 ,532 Imp rovements Other than b ui ld in g 13 ,889,667 14,987 ,459 1,65 1,121 1,833 ,395 15,540 ,788 16,820,854 Equipme nt 978 ,81 6 932,432 53 5,38 0 698 ,722 1,5 14 ,19 6 1,63 1,154 ln fra stru cture 83 1,26 1 975 ,329 83 1,261 9 75 ,3 29 Uncla ss ifi ed pla nt in se rvice 96 7,26 7 1,009 ,322 967,267 1,00 9,322 $ 13 1,424,11 9 100 ,05 2 ,70 4 6 5,293 ,622 4 7,7 9 1,787 196 ,7 17,74 1 14 7,844 ,4 9 1 Additi ona l in fo rm ation o n the Kodi ak Is land Borough 's capi ta l assets can be fo und in note 7 o n pages 44 -4 8 of thi s re port . L o ng-T erm Debt -At th e end of th e c urrent fi sca l yea r, th e Ko di a k Is land Bo ro ugh had tota l bond ed debt o ut sta ndin g of $69 ,135 ,000. T hi s e ntir e a mo unt is bac ked by th e fu ll faith and credit of th e B oro ug h. T he rem ai nd er of th e Kod iak Is land Bo ro ugh 's debt re pre se nt s loa ns and notes payabl e, com pensated a bse nces an d landfill cl os ur e and post-cl osure co st s . T he fo ll ow in g tabl e d is play s t he long-te rm debt for the current year. Gove rnm ent a l Bu siness-ty pe acti v ities ac tiv iti es T otal 2014 2013 2014 2013 2014 2013 Ge nera l obl igatio n bo nd s, includ in g pre mium $ 76,227 ,556 55 ,236 ,11 4 76 ,227 ,556 55 ,236,11 4 ADEC loan s 37,042 42 ,992 37 ,042 42,992 Compe nsated ab se nces 328 ,529 298,640 328 ,529 298 ,640 Landfill post closure car e costs 3,968 ,123 5,389 ,65 0 3,968 ,123 5,389,650 Lo ng le m1 interfu nd borrowi ngs 3,97 1,872 4,55 1,382 3,97 1,872 4,55 1,382 Not es pa ya ble 28 ,9 10,39 3 26,163 ,644 28 ,9 10,393 26,163 ,644 $ 76,593 ,127 55,577 ,746 36 ,850,388 36 ,104 ,676 113 ,443 ,5 15 9 1,682,422 Th e Kodiak Is land Boro ug h 's to tal d ebt in crease d by $2 1,761 ,093 durin g th e c urrent fi scal year . Thi s in c rea se was mostly du e to th e Kodi ak Hi gh Schoo l Re nov ati on Ca pital Proj ect Fund se llin g $22 ,660,000 in genera l obli ga ti on . Tota l d ebt se rvic e payments durin g the year were $3 ,645,950 of prin ci pal of ge ne ral o bli gati o n bond s. Th er e is n o genera l obli gati on debt lim it imp os ed on the Kodi ak Island Borou g h by th e State Co nstituti on, state statu tes or th e Borough's ch art er or co de. Additi onal inform at ion on th e Kod iak Is land Boro ugh 's long -term debt can be fo und in note 9 on pages 53-63 of thi s report . 2 1 KODIAK ISLAND BOROUGH Man age men t's Discuss ion and Ana lys is, Co ntinu ed E cono mi c Factors a nd Next Yea r's Budgets and Rates • At June 30,2014, the un empl oy ment rate for t he Kodiak Is land Borough was 5.2 %, which is .6 % lowe r than la st yea r 's rate of 5.8%. The average un empl oyme nt rate for the las t 10 yea rs has been 6.67%. • Property tax reve nues received are proj ected to increase in future years as the Kodiak Island Borough 's assessed valuation co ntinu es to increase. • Th e PERS (Publi c Empl oyees Retirement Syste m) rate has increa sed fro m 0% in FY2 004 to 35 .68% in FY2014. The State of Alaska se t a ceiling of 22 % o n all p o litical subdivi sions and contributed the additional 13.68 %. ·Req uests for Information This financial re po rt is de s ign ed to provide a ge neral overview o f the K odiak Island Borough's fman ces for all tho se with an interes t. Questions concerning any of the information provided in thi s re port or reque sts for additional informati on should be addressed to th e Kodiak Is land Borou gh, Director of Finance, 710 Mill Bay Kodiak, Alaska 99615 . 22 BASIC FINANCIAL STATEMENTS (This page was left blank intentionally) .. KODIAK ISLAN D BOROUG H Statement of Net Po sition June 30 , 2014 (With summa ri zed finan c ial info rmation fo r June 30, 20 13) C omponent Pr im a!! gOl'crom e Dt unit Tot al reporting e ntity Go"ernmcntal Bu sine ss -type Sc hool Ass ets activitie s adi\'iti tS To tal District 2014 2013 Equity in cent ral treasu ry $ 79,478,297 15,488 ,8 23 94,967,120 33,487 95,000,607 106 ,784 ,673 Due from primary government 8,708,251 8,708 ,251 5,764,927 Receivables : State of Alaska 611,868 4,086,05 8 4 ,69 7,926 3,095 ,11 5 7,793 ,04 1 9,625,483 Federa l government 359,513 359,5 13 35 9,5 13 192,177 Pr operty taxes , ne t of allo wa nce 0[$15 ,828 245,933 245,933 245,933 18 3,093 Severance taxes 396 ,798 396,798 396,798 394,984 Land sa les contracts receivable 549,230 549,230 549,230 9,1 14 Account s and other receivables , nct 52 ,257 307,053 359 ,3 10 36,4 66 395 ,776 294 ,677 Inventories 597 ,93 2 597,932 50 1,735 1,099,66 7 767 ,668 Prepaid item s 1,45 9 2 ,6 79 4 ,138 2 ,940 7,078 67,183 Restricted cash and equivalents 1,649 ,188 1,6 49 ,188 1,649,188 Ca pit al assets : Non-depreciable 71 ,135,785 4 1,752,332 112 ,888 ,117 112 ,8 88,117 58,540,300 pepreciable, ne t 60,288,334 23 1541 1290 83 ,829 ,624 744,435 84,574,059 89,864,964 Total $ 213 ,119,474 87,42 5,355 300,544 ,829 13 ,122 ,429 313 ,66 7,258 272,489,243 Liabilities a nd Net Po sition Liabilities : Account s payab le $ 3,611 ,343 1,852 ,359 5,463 ,702 1,092,034 6,555 ,736 6 ,740,063 Accrued compensation and related liab ilit ies 401,423 100,575 50 1,99 8 3,741 ,034 4 ,243 ,032 3,893,502 Other accrued lia bilities 998,650 42 ,383 1,041 ,033 1,04 1,033 7 16 ,782 Custome r deposits 1,100 27 ,000 28,100 28,100 14 ,750 Unearned reven ues 134,815 134 ,8 15 98,651 2)),466 204,546 Du e to component unit 8,708,251 8,708,251 8,708,251 5,764,927 Internal ba lances (4,026,035) 4,026,035 Noncurrent liabi li ties : Du e within one year 4 ,197,750 875 ,000 5,072,750 609,278 5,6 82 ,028 4 ,537,923 Due in more than one ye ar 72 ,178,195 28 ,035,393 100,213 ,588 96,404 100,309,992 77,649,998 Landfill closur e costs 3,968,123 3,968,123 3,968,123 5,389,650 T otal li abiliti es 86,205,492 38,926,868 12 5,132,360 5 ,63 7,40 1 130,769,76 1 104 ,912 ,141 Net posit ion : Net investme nt in capital assets 80,159,52 1 36 ,383,229 11 6,542,750 618,900 117 ,16 1,650 94 ,962,5 14 Unrestric ted 46,754,46 1 12,11 5,,58 58,869,719 6,866,128 65,735,847 72,6 14 ,588 Net pos ition 126,9 13,982 48,498,487 175,412,469 7,485.028 182,897,497 167,577,102 Tota l $ 2 13,11 9,474 87 ,4 25 ,355 300,544,829 13 ,122,429 313,667,258 272,489,2 4 3 See accompanying note s to fi nancial stateme nt s. 23 FunctionsiPrograms ~ensts Primary government: Governmenta l activi ties: Ge neral government S 6,990,640 Public safety 751,637 Community and economic d evelopment 964,377 Emergency preparedness 12,487 Health and sanitation department 326,700 Educati on, culture and recreation 2 18,013 Parks and r ecreation 37,795 Service district maintenance 631,572 Primary and secondary education 14,523,509 In te rest on long<tenn debt 21 1091406 Totalgovernmenllli activities . 26,566,136 Business<type activities: Municipal soli d waste collection and disposal 2,080,864 Hospital facili ties 1,740 ,525 Kodiak Fisheries Resea«:h Center 1,681,111 91 1 servic e 39:81 7 TOIllI business-type activities 5,542,317 Total primary government 32,108,453 Component unit: School Distri ct $ 53,240,623 General revenues: Propeny taxes Grants and entit lements not restricted to specific programs LaI1d sales Severance taxes Suppon from primary government Oth" Inv estment earn ings Transfers Total general reven ues and transfers Change in net position Net position, at beginning of year. as previously staled C wnulative e ffect of a change in accounting principle Prior period adjustment Nel position, at beginning of year, as restated Net position, at end of year See accompanying notes to financial statements, C horges for services 577,350 14 ,336 110,313 701,999 2,265,967 1,150,000 1,851.322 .5,267,289 5,969,288 243,260 KODIAK ISLAND BOROUGH Statement of Ac tivities Year ended Jun e 30, 20 14 (With summarized financial inform ation for the year ended June 30. 20 13) PrORr.m revenu es Net (expe nse ) r evenu e li nd cha nges in n et positi on Operating grant! and contributions 392,183 13 ,430 71,150 253,230 3,347,517 4,077.510 4,077,510 12,726,590 Ca pital grant s 10,007 51 ,764 160,730 [ 1,987 6,417,249 6,65 1,737 5,323,038 2 15,000 5,538,038 12,189,775 6,820 24 Primary governmenl Governm enla l Bu si n en-Iype ac tivities activities (6,01 1,100) (672,107) (732,497) (500) (326,700) (2 18,013) (37,795) (52 1,259) (7,853,030) 1.238,111 (15,134,890) (15,134,890) 13,741,190 4,142,583 864.584 1,843,819 506,546 1.1 06,717 ~80,OOOl 22,125,439 6,990,549 11 9,923.433 119,923,433 126,9 13,982 5.508.141 (375,525) 170,21 1 ill&!lL 5 1263,0 10 5,263~ 598,162 178,85 1 80,000 857,013 6,120,023 42,378,464 42,378,464 48,4?8,487 Total (6,011,100) (672,107) (732,497) (500) (326,700) (2 18,013) (37,795) (521.259) (7,853 ,030) 1.238,111 (15,134 ,890) 5,508,141 (375,525) 170,2 11 (39.817) 5,263,010 (9,8 71 ,88 0) 13 ,74 1,190 4,142,583 864,584 1,843,8 19 1,104 ,708 1,285,568 22,982,452 13 ,11 0,572 162 ,30 1,897 162,30 1,897 175,412,469 Compon enl unil School Di strict (40,263,953) 30,698.126 10,651,976 1,123,674 42,473,776 2,209,823 5,275,205 5,275,205 7,485,028 Totlll reporting entity ~ 20t3 (6,0 11,100) (5,208,0 11 ) (672,107) (528,757) (732,497) (1,070,99 1) (500) (2 78.480) (326,700) (290,800) (218,013) (8 4,273) (37,795) (2 1,100) (52 1,259) (385,188) (7,853,030) (12,811.391) 1,238 ,111 1,013 ,054 (15,134,890) (19,665,93 7) 5,508.141 5,42 8,958 (375,525) 408,436 170,21 1 (148,230) p9,8171 ~87,5961 5,263,010 5,60 1.568 [9187 1,88 0 1 [14 ,064,3691 (40,263,953) (38,652,207) 13,741,190 12,9 10,512 34,8 40,709 34 ,780,892 864,584 1,843,8 19 1,774,700 10,651,976 10,250,350 2,228.382 560,856 1,285,568 646,378 65,456,228 60,923,688 15,320,395 8,207,112 167 1577,102 173 1307,405 (196,453) (13,740,%2) 167,577,102 159,369,990 18 2,897,497 1~7,577, 102 A"ds Genera l Assets: Equity in ce ntral tr eas ury S 3,484,048 Rec eivabl es : State of Alaska 87,465 Federal government 205,518 Property taxes, net of allowance of$15 ,828 21,885 Severance taxes 396.798 Land sales contracts Account s and other receivables, net 14,740 Pre paid item s 1,459 Due from other fund s 209,477 Land sales contracts , due after one year Advances to other funds Total S 4,421,390 L iabilities, Defe rred Innows of Resources, and f und Balances (Deficits) Liabilities : Accounts payable 364 ,037 Accrued compensatio n and related liab ilities 184 ,241 Custome r deposits Due to component unit Due to other fund s 174,3 12 Advances from other funds Unearned revenues Total1iabilities 722,590 Deferred inflows of resources : Unavailable revenue s 194!852 Total liabil itie s and deferred inflows of resourc es 917.442 Fund balances (deficit s): No nspendab le 1,45 9 Co mmitted Ass igned Unassigned 3.502,489 Total fu nd balances (deficits) 3,503,94 8 Tot al S 4 ,421,390 See accompanying notes to fin ancial statements . KODIAK ISLAND BOROUGII Balanc e Sheet Govemment(ll Funds June 30 , 2014 (With summarized financial infonnation for June 30, 2013) Education Ca ~ital Proj ect Funds S~t<:ial Revenue F unds and Hea lth Kodiak High Rencwa l . .nd Education Debt Scrvice Sc hool RCll lacemcnt Su~~rt Facilities Fund Renovatio n Pro iects 8,468 ,311 32,7 11 ,89 5 296 ,5 11 28.530,694 464 49,396 338 ,864 70.160 43,838 170 .206 33.486 2,580 174 ,3 12 6!716.900 8,687,913 39,603,107 668,86 1 28.600.854 46.882 11,336 3,150 2.974,474 11,369 8 ,708 .25 1 95.0 72 2,745.028 8,7 19,587 3,1 50 2,974,474 2,85 1,469 54 1 163 __ 8,7 19,587 54 ,1 63 3.1 50 2.974,4 74 2.85 1,4 69 39.548 ,944 665,7 11 25 ,62 6,380 PI,674} (2 ,804,587) Pl ,674} 39,5 48 ,9 44 665,7 11 25,626,3 80 p ,804 ,58 7} 8,687,9 13 39,603,107 668.861 28 ,600 ,854 46,882 25 Other Govel·nmental Totals Funds 2014 2013 5,986,374 79 ,478,297 77,6 18 ,660 22.145 6 11 ,868 1,2 84 ,2 14 153 .995 359,513 192 ,177 17 ,776 245 ,933 183 ,093 396,798 394 ,9 84 35,465 35,465 3 ,649 37,517 52 ,257 46 ,422 1,4 59 61 ,376 383.789 3,836 ,895 513,765 513 ,765 5,465 6,7 16 ,900 4!576 ,459 6,767.0 37 88,796,044 88,203,394 246.977 3,6 11 ,3 43 2,3 49 ,953 184 ,241 91 ,924 1,100 1,100 1.250 8,708,25 I 5,764 ,927 60,242 329,626 3.773,983 2,745.028 25,077 134 ,8 15 134 ,8 15 188,756 443 .13 4 15.7 14,404 ~870 513 ,7 65 762,780 19 1,0 40 956,899 16 .4 77.184 12,386,9 10 513,765 515,224 4 ,643,300 2,14 0,474 42,355,129 37 ,902,356 3,249.11 9 28,875,499 29,98 1,503 !93,22O l 573,008 3,289,325 5,810.138 72.31 81860 75,8 16.484 6 ,767 ,037 ~044 88 ,2 03,394 KODIAK ISLAND BOROUGH Reconciliation of Net Position Between the Government-Wide Financial Statements and the Fund Financial Statements June 30, 20 14 Amount reported as fund balances on the governmental funds balance sheet Amounts reported for governmen tal activities in the statement of n et position are different because: Cap it al asse ts used in governmental activities are not financial resources and, therefore, are not reported in the funds. Long-term receivables, delinquent property taxes and loans are not availab le to pay for current-period expenditures and, therefore, are unavailable in the funds: Property taxes Int erest receivable Notes receivable -land sale s Long-term li abi lities , including bonds payable, are not due and payable in the current period and therefore are not reported in the funds: General obligation bonds payable Bond premium ADEC loans Accrued intere st expense Compensated absences Net position of governmental activities See accompanying notes to financial statements. 26 $ . 194,852 54,163 51 3,765 (69,135,000) (7 ,092,556) (37,042) (998,650) $ 72,3 18 ,860 131,424,119 762,780 (328 ,529) (77 ,59 1,777) $ 126,913,982 Gentra] Revenut$: Property taxes and assessments 207,975 Transient accomodations tax Severance tax es 1,843,819 Intergevemmental : Sl.ltewurcn 2,859,246 Federal sources 1,746,670 Charges for serv ic es 3,136 Licenses, permits and fCC'S 82,113 In''eStment income 23,804 Other 11,1 92 Total uwenues 6,77 8,555 Expenditures: Current ~nera l ge"cmment 4,495,294 P ublic safety 72,941 Communit y and economic dew;lepmem 880,251 Emergcncy preparedness 9,987 Health and sa nitation department 326,700 EduC3tion, culture and recrc-ation 95,625 Parks and recreation 37,795 Serv ice district maintenance Pr imaI)' and secondary educat io n 195,000 C.piUlloutlay: Schools Genera l 24.500 Debt $tn.'icc' Principal Int erest Debt issuance costs Tota] cxpC'nd ilures 6,13 8,093 Eltcess (defi ciency) of revenues ever (u nder) c:O;pC'nd itures 640,462 Other fi nancin~ sources (uses): Proceeds from sale of bonds Premi um on bonds issued Proceeds from sale of capital a:;sets La.nd s.ale proceeds T mlsfen in Transfers OUI Net ether financin g (483 SOOI sources (uses) ~483.s001 Change in fund balances 156 ,962 Fund balances (deficits), al begilUlin g ofyur 3.346.986 Fund ba lances (d eficits), at end of year , 3 503 948 See accompanying nOles \0 financial statements. KODIAK ISLAND BOROUGH SUlterne nt of Revenues, Eltp~ndit ur~s an d Changes in Fund Balances (Deficits) Governmental Funds Year ended June 30, 2014 (With summarittd financial information for th e ye;lr ended Jun e 30, 2013) E duration Cal!ital Pro ject "',,n ds Sl!eci ~1 R c-nnue Funds a nd HfI]th Kodiak High Rentw.lland Educa ti on Debt Sen>ic c-Sc ho ol Replacemc-n t S u.,po rt Faciliti es Fund Renu"ltion Projects 9,882,767 2,043,895 180,590 253,230 3,347,5]7 6.342,993 74,256 655,470 3,182 385,835 IO,i3 ,t997 655.470 5,394,594 6728,828 254 ,346 6,045 90,749 10,650,220 34,749,847 1,262 ,638 3,645,950 2,107,/98 89,835 10,650220 5,849,028 34749847 1.353.387 (514,223 1 655,470 (454,434 1 (28,0210191 (1 098,541) 22,660,000 2,42 7,432 330,000 482,402 16 1,963 (522 3651 3)0.000 (5g36s1 482,402 25,087432 161.963 (1 84.22 3) 133,105 27,968 (2,933.5 87) (936,S78 ) 152,549 39,4 15,839 637,74 3 28559,967 jl ,868,(09) (3 1 674 ) 39.54 8 944 665711 25626380 (2804,58 71 27 O th c-r Gonrnmc-ntHI Tot a l~ Fund s 2014 2013 1,341544 13,656,771 12,936,796 75,142 75,142 96,640 1,343 ,8 19 1,774,700 60,916 12,938,158 7,929,017 187,002 1,933,672 ],659,372 586.300 589,436 562,199 29,850 112,563 94,826 47,17S 1,115,466 536,903 39364 50,556 52516 2,367,293 32,3 15,583 25,642,969 857,417 5,449.505 5,307,199 503,779 576,720 469,280 84,126 964,377 1,070,99 1 9,987 18 ,342 326,700 290,800 95,625 84,273 37,795 21,100 631,572 631,512 479,264 10,845.220 ]0,442,350 122,388 34,872,235 5.486,612 234,858 1.52 1,996 2,041,674 3,645,950 2,966,441 2,208 2,109,406 1,254,22 5 89835 20809 2,436 J48 61,176.923 29953,420 (69,0551 (28,861,)40) (431045 1) 22,660,000 21,595,000 2,427,4 32 3,424,8 19 9,16< 356.284 356.284 6,787 18,000 992,365 6,2 12,885 (66 500) (1 ,072 365) (6.292 ,8851 307,784 25,363.71 6 24,956.170 238,729 (3,497.624) 20,645,719 5,51 1,409 75,816,434 55 170,765 5,8 10,13 8 72.318,860 75.816,484 KODIAK ISLAND BOROUGH Reconcil iation of the Statement of Revenues, Expenditures and Changes in Fund Balances (Deficits) of Governmental Funds to the State ment of Activities Year ended June 30 , 2014 Change in fund balances -tota l governmental fund s Amounts reported for governmental activities in the statement of activitie s are different becau se: Governmenta l fund s report capital outlays as expenditures . However, in the Statement of Activities the cost of those ass ets is a llocated over their estimated useful live s and reported as depreciation expense: Capital outl ay Depreciation expen se Governmenta l funds only report the revenue from the sale of ass ets to the extent proceeds are received from the sale. In the Statement of Activ iti es, a gain or lo ss is reported for each sa le. The net effect of tran saction s in vo lving capital as set s is to decrease net position. Cost of ass ets so ld Accumulated depreciation of assets sold Certain revenue s in the statement of activit ies do not provide current financial resource s and are reported as unearned or unavailable revenues in the funds : Property tax Interest income Land sale proceeds Certain revenue s that were earned in a prior year provide current financial resource s : Accrued property tax Accrued interest income Land sale contracts The issuance of long-term debt provides current financial resources to goverrunental funds , while the repayment of the principal of/ong-term debt consumes the current financial resources of governmenta l funds. Neither transaction, however, has any effect on net position. Also , governmental fund s do not report th e accrual of interest expense on debt when it is not payable from c urrentl y avai labl e resources: Interest expenditures applied to accrued interest Issuance of/ong term debt Principal repayments Bond premium Bond premium amortization Some expenses reported in the Statement of Activities do not require the use of current financial resources and , therefore, are not reported as expenditures in governmental funds: Compensated absences , net change Change in net position of governmental activities S~e accompanying notes to financial statem ents . 28 $ 35 ,607 ,990 (4 ,042 ,059) (194,5 16) 194 ,852 54 ,163 513 ,765 (185 ,575) (62 ,912) (5,465) (376,689) (22,660,000) 3,645 ,950 (2,427,432) 455,990 $ (3,497,624) 31 ,565 ,931 (194 ,516) 762 ,780 (253 ,952) (2 1,362,18 1) (29,889) $ ====6,=99=0,,=,5=49= Assets Curr ent assets : Equi ty in central treasury $ Restricted cash and equivalents Customer re cei vables Accounts re ce ivab le- State of Ala ska Prepa ids Total current as sets Inventorie s Ca pital asse ts: Non-depreciable Deprcci~ble . net Total capital assets Tota l noncurr ent asset s Total $ Liabilities and Net Po sition Current liab ilitie s: Account s payabl e $ Customer deposits Accrued co mpensa tion and related liabilities Other accrued liab ilities Current port ion of adva nces from other fun ds Curre n! portion of notes pa yabl e Due to other fund s Total cu rrent li abilities Noncurrent liabilities : Notes paya bl e Adv anc es from other fu nds Accrual for landfill closure and postclosure costs Tot al noncurrent liabi li ties Tota l liabilities Net po si tion : Net investment in cap ital assets Unre stri cted (defi c it) Total net position Total $ See accompan yin g no tes to financial statem en ts . KODIAK IS L AN D BOROUGH Statement of Net Position Prop ri etary Funds -Bu sin ess -Type Activities -Enterprise Funds Ju ne 30, 20 14 (With summar iz ed fi nanci al information for Ju ne 30 , 20 13) Municipal Kodiak Otbn So lid Waste Fisberies Nonmajor Collection and Hospital Research Enterprise Dis~OSllI Facilities Cenf er Fund 5,737,395 6,449,638 3,27 1,18 1 30,609 302 ,500 1,346 ,6 88 260,897 40 ,046 6,110 4 ,047 ,505 38,553 2,679 10,35 0,976 7,834,8 79 3,311 ,227 36 ,719 320,925 277 ,00 7 19 ,753,655 20 ,967,304 1,031 ,373 2,287 ,465 11,770,723 9,483,102 22,041 ,120 32 ,738 ,0 27 10 ,5 14,475 22,362 ,045 33,015 ,0 34 10,5 14 ,47 5 32 ,713 ,02 1 40,849,9 13 13,825,702 36,719 1,551 ,020 5,83 0 258,790 36,719 27,000 7 1,0 12 29,563 4 2,383 82 ,723 540,000 270,000 605 ,000 54,163 1,96 1,41 5 693 ,553 882 ,5 16 36,719 9,936 ,895 18 ,098,4 98 794 ,149 2,555 ,000 3,968 ,123 13 ,905,0 18 18,892,647 2,555,000 15,866 ,433 19,586,200 3,437 ,5 16 36,719 I 1,834 ,225 14 ,034,529 10 ,5 14 ,475 5,0 12,363 7,229 ,184 (126,289) 16,846,588 2 1,263 ,7 13 10,388,186 32,713,021 40,84 9,9 13 13 ,825 ,702 36,719 29 Totals 2014 2013 15,48 8,823 29,140,734 1,649,188 307,053 248 ,255 4,086 ,058 5,456 ,114 2.679 195 21 ,533,801 34,845,298 597 ,9 32 277,007 41 ,752,332 22 ,468 ,099 23,54 1,290 25,323,688 65 ,293,622 47,791 ,787 65,89 1,554 48 ,068,794 87,425,355 82 ,9 14,092 1,852 ,359 4,164,291 2 7,000 13 ,500 100,575 95,428 42,383 94,82 1 622 ,723 579,510 875,000 260,000 54,163 62,912 3,574,203 5,270,462 28 ,035 ,393 25,903,644 3,349,149 3,971,872 3,968,12 3 5,389,650 35,352,665 35 ,265,166 38,926,868 40,535,628 36,383,229 2 1,628,143 12,115,258 20,750,321 48 ,498,487 42 ,378,464 87,425,355 82,9 14,092 KODIAK ISLAND BOROUGH State ment of Revenue s, Expenses , and Changes in Ne t Pos ition Proprietary Fund s · Bu siness· Type Act iviti es -Enterpri se Fund s Year ended Ju ne 30 , 20 14 (Wit h su mmarized financial in fonn ation for the year ended June 30, 2013) Municipal Kodiak O ther So lid Was te Fis herie s No nmajor Collcction and Hospital Rcstarcb En(uprise Disposal Fa cilities Cent e r Fund Operatin g revenues : Charges for serv ices : So lid waste disposal $ 2,265,967 Lease in come 1,150,000 1,851,322 Other 39,403 439 39,817 Total operating re venues 2,305.370 1,150,000 1,851 .761 39,817 Operat ing expenses: Personne l serv ices 876 ,3 54 10,100 359,783 3,000 Refuse di sposa l Co ntracted services 185,284 Maintenance and repair s 141 ,309 1,144 Dep reciation 278 ,342 867,913 636,14 3 General and administrati on 206,793 411,55 0 Misce llaneous 5 ,791 47 ,090 98 Telephone services 36,719 Re cycli ng serv ices 214 ,876 Contributions 39,106 Tota l operating expen ses 1,942,064 883,804 1,455,710 39,8 17 Operat ing income (loss) 363,306 266 ,196 396,051 Other income (expe nse): In te rgovernmental : State sources· grant s 5,323,038 2 15 ,000 State of Alaska on·bchalfpayment Federal so urces -grant s Co ntr ibut ion to Pro vidence Hosp ital (108,000) Investment income 67,094 73,207 38,550 Bon d premium amort izatio n 27 ,2 11 113 ,82 1 Bond is suance costs Landfil l closure and postclosure costs 377,471 Intere st expe nse ( 138,800) (748,721) (225,401) Tota l other in come (expense) 5,656,0 14 (4 54,6 93) (186,85 1) Inco me (loss) befor e tran sfers 6 ,0 19,320 (188,497) 209,200 Transfers in 13,500 66,500 Change in net po si tion 6,032,820 (12 1,997) 209,200 Net po siti o n, at be g innin g of year 10,813,768 2 1,385,71 0 10 ,178,986 Net position , at end of year S 16,846,588 2 1,263,713 10,388,186 See accompanying not es to finan cial stateme nts . 30 Total s 20 14 20 13 2,265,967 2,504,035 3,00 1,322 2,323,503 79 ,659 51,477 5,346,948 4,879,015 1,249,237 1,292,778 185,284 352,132 142,453 38 ,981 1,782 ,398 1,774 ,135 618,343 771 ,218 52,979 67,418 36,7 19 84 ,454 214,876 212,243 39,106 37,011 4,32 1,395 4,630 ,3 70 1,0 25 ,553 24 8,645 5,538,038 5,984,095 84,296 1,338 (108 ,000) (108 ,000) 178 ,851 117,702 14 1,032 27,21 1 (112 ,573) 377,47 1 (1 ,112 ,922) (444,756) 5,0 14,470 5,549,3 13 6 ,040,023 5 ,797,95 8 80,000 80,000 6,120 ,023 5,877,958 42 ,3 78,464 36 ,500 ,506 48 ,498,487 42 ,378,464 KODlAK I SLAND BOROUG H S tatement of Cash Flows Propri etary Fund s -Bu si nes s -Type Activities -Enterpri se Fu nds Year ended Ju ne 30, 2014 (Wi th su mmari ze d finan c ia l infonnation fo r the year ended J une 30, 20 13) Municipal Kodiak Other Sol id Waste F is h eries Non m ajor C ollection and n os pital Resear c h Ente rprise T ota ls Di sposa l Faciliti es Center Fund 2014 2013 Cash flo ws from operating acti viti es: Cas h rece iv ed from c ustom ers $ 3,399 ,424 1,421 ,7 16 1,81 2,2 4 6 38,320 6,67 1,706 1,602 ,009 Payments to s uppli e rs (3,637,290) (1 ,100,863) (2 4 7,059) (36,725) (5,021,937) 1,888,395 Pa)'J11ent s to e mployees (870,866) (10,100) (359,783) (3,000) {I ,243,749) (1 ,350,745) Ne t cash provi ded (used) by operating activi ties (1,108,732) 3 10,753 1,205,404 (1,405) 406P20 2,139,659 Cash flows from noncap it al fina ncing activi ties : State sources -grants 5,323,03 8 2 15,000 5,538,038 5,984,095 Federal sources -grants 1,338 Contribution to Providence Ho s pital (108,000) (108,000) ( 108,000 ) Int ern a l activi ty -payments to/from other funds (8 ,749) (8,749) 7 1,284 Transfers in 13,500 66 ,500 80,000 80,000 Net cash provided (uscd) by noncapita l financ ing activi ti es 5,336,538 173 ,500 (8,749) 5,501,2 89 6,028,7 17 Cas h flo ws from capi tal and related finan c ing activities: Acqui sition and const ru ction of capital assets (8,470,829) (9,969 ,269) (844 ,13 5) (19,284,233) (10,249,728) Int erest paid on not es payab le and in terfund borrowings (111 ,589) (7 48,72 1) (225,40 1) (1,085,711 ) (442,830) Principal payments on lo ng-tenn notes pa yable and in terfund borrowin g (287,2 11 ) (79,510) (500,000) (866,72 1) (882 ,858) Proce ed s fro m issuance of notes pa yab le 3,147 ,7 82 3,14 7,782 18 ,730,03 2 Net cash provided (used ) by capi ta l and related fin a nc in g acti vities (5 ,72 1,8 47) (I O,797,500~ (1,569,536) ( 18,088,883) 7,154,6 16 Cash nows from investing activit ies: Interest and di vi dends rece ived 67,094 73,207 38,550 178 ,851 11 7,702 Net c ha nge in cas h and cash equival ent s (1.426 ,947) (10,240,040) (334,33 1 ) (1 ,405) (12 ,002,723) 15,440,694 Cash and equ ivalents, at beginning o f year 7,466 ,842 18,036,366 3,605 ,5 12 32,0 14 29,140,734 13,700,040 Cash and equ iva lents, at end of year $ 6,039.895 7,796,326 3,27 1,181 30,609 17,138,0 11 29,1 40,734 Reconc il iation of cas h and cash equi valents to the State ment of Net Pos it ion : Equity in central treasury $ 5,737,395 6,449,638 3,271,18 1 30 ,609 15,488,823 29,140,734 Re stri cted cash and e quival ents 302,500 1,3 46,688 1,64 9,188 $ 6,039,895 7,796,326 3.27 1,18 1 30,609 17,138 ,0 1 1 29,140,734 (continued ) 3 1 KODIAK I SLAND BOROUG H Statement of Cash Fl ows Pro prietary Fund s -Business -Type Activities -Enterprise Funds, (Continu ed) Year ended June 30. 20 14 (Wi th s ummarized financial in fo nnat io n for the year e nded J une 30, 2013) Municipal Kodiak Othe r Solid W u tt Fisbe ries Noumajor ColI «tion and Hos pita l Resea r c h Enterprist Di s ~osal Facilities Ctnter Fund Reconciliation of operating income (loss) to n et cash provide d by operating a cti vities: Operating income (loss) $ 363,306 266,196 396,05 I Adj us tTmnts to reco nc il e operating income (loss) to net cash provided by operati ng acti\'it ies: Deprec ialion 278,342 867,9 13 636,143 State of Alaska on-behalf payments Accrual for landfill c los ure and postclosure costs Changes in assets and li abilities that provided (used) cash: (Increase) decrease in assets: CUS lomer receivables (17,786) (39,515) (1,497) Accounts re ceivable -Slale of Alaska 1,098 ,3 40 271 ,7 16 Accounts receivable -Federal govemm ent Prepaids (2 ,484) In ven tories (320,925) Increase (decrease) in liabil it ies: ACCOlUUS payable (1,4 30,0 19) (1,095,072) 213,066 92 Accrued compensation 5,488 Other accrued li abilities (52,438) (341 ) Landfill closure and postclosure costs (1,0 44.056) Unearned revenues 13 ,500 Net cas ~ pro\'ide~ (used) by (1,1011,732) 3 1U,753 1,2U5,4U4 operatmg act IvItIes , { I,4U5 1 See accompanyin g notes to fi nancial statements. 32 Totals 2014 20U 1,025,553 248,645 1,782,398 1,774,135 84,296 (8 ,295) (58.798) 32,152 1,370,056 (3,403,372) 80,7 14 (2,484) (195) (320.925) (2,311 ,933) 3,357,643 5,488 (25,763) (52,779) (13.801) (1.044,056) 13,500 13,500 4U6 ,020 2 ,139,659 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements June 30, 2014 (1) Summary of Significant Accounting Policies (a) Reportillg Elltity The Kodiak Island Borough (the Borough), Ala ska , wa s organized to perform the municipal dutie s allowed by Alaska Statute s and as directed by it s residents. As required by accounting principle s generall y accepted in the United States of America , these financial statements pre sent the government and it s component unit, an entity for which the government is considered to be financiall y accountable. The discretely presented component unit is repOlted in a separate column in basic financial statements to empha s ize it is legally separate from the government. The Borough reviewed its relation ship with other organization s and determined that the following organization is a component unit. Discretely Presented Component Unit The Borough ha s delegated the operating respon s ibility for public education to the Kodiak Island Borou g h School Di strict (School District). In accordance with statutes, the Borough retain s ownership of the education related capital ass ets and incurs the debt, if nece ss ary , to finance the acqui s ition and con struction o f school facilitie s. T he Borou gh Assembly approves the total annual budget of the School District and may, during the year, increa se the total appropriation. Complete financial statements for the component unit ma y be obtained at the entity 's admini strative offices for the Kodiak Island Borough School District. Kodiak Is land Borough School Di strict 722 Mill Bay Road Kodiak, Alaska 99615 (b) GoveTllme"t-Wide alld FUlld Fillallcial Statemellts The government wide financial statements (i.e ., the statement of net position and the statement of activities) report information on all of the activities of the primary government and its component unit. For the most part, the effect of inter-fund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business type activities,· which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from the legally separate component unit for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include I) charges to customers or applicants who purchase, use , or directly benefit from goods , services , or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterpri se funds , if applicable, are reported as separate columns in the fund financial statements. 33 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued (c) Measurement Focus, BllSis of Accollnting, and Finllncial Statement Presentation The government-wide financial state men ts are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial sta tements. Revenues are recorded when earned and expenses are recorded when a liability is incun·e d, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied . Grants and similar item s are recogni ze d as revenue as soon as all eligibility requirements have been met. Governmental fund financial sta tements are reported using the current financial resources measurement focu s and the mod ified accrual basis of accounting. Revenues are recognized as soon as they are both measurabl e and available . Revenues are considered to be available when they are collectible within the current peri o d or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of dle current fi s cal period except for grant revenues which are recognized when the related expenditure is incurred irre s pect ive of when the cash is received. Expend iture s generally are recorded when a liability is incurred , as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes and interest associated with the current fiscal period are all considered to be s usce ptible to accrual and have been recognized as revenues of the current fi sca l period. All other revenue items are considered to be measurable and available only when cash is received by the government. The gove rnment reports dle following maj o r governmental funds : The General Fund is the gove rnment's primary operating fund. Jt accounts for all financial resources of the general gove rnment, except those required to be accounted for in another fund. The Education Support Special Revenue Fund accounts for property taxes and assessments dedicated to school district support activity. The Facilities Special Revenue Fund accounts for the proceeds from the sale of Shuyak Island. The single most important goal is to preserve the principal of the fund . Interest earnings, after inflation proofing, can be used for debt service, building insurance and capital projects. The Education and Health Debt Service Fund was established to finance and account for the payment of interest and principal on all general obligation debts, serial and term, odler than that payable exclusively from special assessments and revenue debt issued for and serviced by a government enterprise fund. The Kodiak High School Renovation Capital Project Fund accounts for the construction and major maintenance activities for the Borough's educational facilitie s funded by school bonds. The Renewal and Replacement Projects Capital Project Fund accounts for the construction and maintenance of various Borough facilities . 34 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Co ntinued The government reports the following major proprietary funds: The Municipal So lid Waste Co llection and Disposal Fund accounts for the co llect ion and di s posa l of solid waste and recycling serv ices for the Kodiak Island Borough . The Hospital Facilities Fund accounts for rent s on the Borough owned ho sp ital; ho sp ital related state revenue sharing; and other ho spital related revenue. In turn , it purchases hospital equipment and makes debt serv ice pa yment s on ho spital related debt. The Kodiak Fisheries Research Cen ter Fund accounts for rents and expenses on the Borough owned Kodiak Fisheries Research Center. The three tenants: NOAA, Alaska Department of Fish & Game and University of Alaska, Fairbanks pay lea se funds to participate in this multi-agency re sea rch facility committed to the preserva tion of the North Pacific marine ecosystem and reso urce s. As a general rule the effect of inter-fund activity has been eliminated from the government wide financial stateme nts. Exceptions to thi s general rule are charges between various function s of the government. Elimination of the se charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include (I) charges to customers o r applicants for goods, se rvices, or privileges provided , (2) operating grants and contributions, and (3) capital grants and contributions. Intelllall y dedicated resources are reported as ge neral revenue s rather than as program revenue s. Likewise , general revenues include all taxes . Proprietary funds distinguish operating revenues and expenses from nonoperating item s. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenue s of the enterprise funp s are charges to customers for sa les and serv ice s and lea se reve nue s. Operating expenses for enterprise funds include the cost of sales and se rvices, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. (d) Assets, Liabilities, alld FUlld BalallcelNet Positioll Cash and Investments Cash and temporary investments of Borough funds are pooled in a central treasury. Each fund 's portion of this pool is displayed on the Balance Sheet and Statement of Net Position as "Equity in Central Treasury". The Borough participates in the Alaska Municipal League Inve stment Pool (AMLIP). AMLIP is not SEC registered and is unrated . Alaska Statute 37.23 establishes regulatory oversight of the pool. The law sets forth numerous requirements regarding authorized investments and reporting . The pool is incorporated in the State of Alaska as a nonprofit corporation and reports to its Board of Directors. Alaska Statute 37.23.050 requires the retention of an inve stment manager. The AMLIP manager is required to produce monthly disclosure statements to the pool. The pool has also reta ined an investment advisor to monitor the performance of the investment manager and to ensure compliance with investment policie s. All participation in the pool is voluntary . The pool must maintain a dollar weighted average maturity of 90 days or less, and only purchase instruments having remaining maturities of 397 days or le ss. On a monthly basis , the investments in the pool are reviewed for fair value by an independent pricing serv ice . 35 KODIAK ISLAND BOROUGH Notes to Basic Financia l Statements, Continu ed All highly liquid investments, excluding restricted assets , with original maturities of ninety days or less are con s idered to be cash equivalents. For purposes of the Statements of Cash Flow s, equity in central trea sury held by e nterpri se funds are treated as cash equivalents . lnvestments for the government, as well as the component unit, are repOlted at fair value , as deternJined by quoted market prices. The reported value of the pool is the same as the fair value of the pool share s . Receivables and Payables Act ivity between fund s that are repre sentative of lending /borrowing arrangements out standing at the end of the fi scal year are referred to as either "due to /from other fund s" (i.e., the current portion of inter-fund loans) or "advances to /from other fund s" (i.e., the noncurrent portion of inter-fund loans). Any re s idual balances outstanding betweeiJ the governmental activit ies and business type activities are reported in the government wide financial statements as "interna l balances." Advances between fund s, as reported in the fund financial statements, are offset by a fund balance re serve account in applicab le governmental funds to indicate that they are not available for appropriation and are not expendable available financial re sources. Inventories and Prepaid ltemslExpenses Expendable operating supplies of the Borough are accounted for using the purchases method. There are no s ignificant amounts of s uch inventories on hand at year end. The entire Ho spital Enterprise Fund inventory is assigned to Providence as of Apri l 21 ,1997. According to the terms of the lease agreement for the hospital facilities [see note 13(a)], those item s are required to be returned to the Borough at the ternJination 'ofthe lease in at le ast equa l value. Payments made to vendors for services that are applicab le to future accountin g periods are recorded as prepaid items. The prepaid as sets do not reflect current available re sources and , thus, an equivalent portion of fund balance is clas sified as nonspendable in the fund financial statements. Prepaid items and expenses are based on the consumption method. Capital Assets Capital assets , which include property , plant, equipment, and infrastructure assets (e.g., roads, street lights , and similar items including those acquired prior to fiscal years ended after June 30 , 1980), are reported in the applicable governmental or business type activities columns in the government-wide financial statements. Capital assets are defined by the Borough as assets with an initial , individual cost of more than $5,000 (amount not rounded) and an estimated useful life in excess of two years . Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market va lu e at the date of donation. The costs of nonnal maintenance and repairs that do not add to the va lu e of the asset or materially extend assets lives are not capitalized . Major outlays for capita l assets and improvements are capita li zed as projects are constructed. Interest incurred during the construction phase of capital assets of business type activities is included as part of the capitalized value of the assets constructed. There was no interest capitalized during the year. 36 KODIAK ISLAND BOROUGH Notes to Basic Fin ancial Statements, Co ntinued Property, plant, and eq uipment of th e primary gove rnment is deprec iat ed us in g th e stra ight lin e me thod over the foll ow in g estimated use ful live s: Buildings and improvem e nts Improvements other than buildings Equipment infra structure Compensated Absences 10-40 years 10-15 years 5-10 years 40 yea rs It is the Borough's policy to pelmit e mployees to accumulate earned but unu sed annual leav e benefits. All annual leave pay is accrued when incurred in the government wide and proprietary fund financial statements. A liability for the se amounts is reported in governmental fund s only if they have matured, for example, as a re sult of employee re signation s and retirements. Long-term Obligations In the government wide financi a l statements, long-ternl debt and other long-term obligations are rep0l1ed as liabilitie s in the applicable governmental activitie s, bu s ines s ty pe activities, or prop rietary fund Statement of Net Position. Bond premium s and di sco unts are d eferred and am o rtized over the life of the bonds using the effective interest method. Bonds payable are reported net of th e applicable bond premium o r di sco unt. Bond iss uance costs are expensed in the year incurred. In the fund financial statements, go vernmenta l fund type s recognize bond premiums and di sc ounts, as well as bond iss uance costs , during the current period. The face amount of debt issued is reported as o ther financing sources. Premiums received on debt iss uances are reported as other financing sources while discounts on debt issuances are reported as other financing use s . Issuance costs, - whether or not withheld from the actual d e bt proceed s received, are reported as debt service expenditures. interest on long-teml obligations is recorded as an expenditure when due. Net Position In the government wide financial statements, net position is reported in three categoties; net investment in capital assets , restricted net position and unrestricted net position. Net position is reported as restricted when constraints placed on net asset use are either externally impo se d by creditors (such as thro ugh debt covenants), grantors, contributors provisions or laws or regulations of other governments or imposed by law through constitutional provision s or enabling legislation . Fund Balance In the Fund Financial Statements, fund balance includes five classifications as follows: Nonspendable Fund Balance -amounts that are legally or contractually required to be maintained intact (such as the corpus of an endowment fund) or amounts that are not in a spendable fOml (such a s inventory , prepaid expenses, supplies, and long-teml receivables). Such constraint is binding until the legal or contractual requirement is repealed or the amounts become spendable. 37 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued Restricted Fund Balance -amounts constrained to specific purposes by their providers (such as grantors and higher levels of government), through constitutional provisions, or by enabling legislation . Such constraint is binding unless modified or rescinded by external body, laws, or regulation. Committed Fund Balance -amounts that can be used only for the spec ific purposes detennined by a fonnal action of the Borough Assembly, the Borough's highest leve l of decision-making authority. Commitments may be changed or lifted by the Assembly taking the same fOimal action that imposed the constraint originally. The fOl1nal action that is required to be taken to establish, modifY or rescind a fund balance commitment is for the Assembly to pass a resolution. Assigned Fund Balance -amounts that are constrained by the Borough for specific purposes. In governmental funds other than the General Fund , assigned fund balance represents the amount that is not restricted or committed, but constrained for a specific purpose. Assignment of fund balance is made by the Borough Assembly or its designee, the F inance Director. Such constraint is binding unless modified or eliminated by the Borough Assembly or Finance Director. Assignment of fund balance is made during the budget process and reviewed at the end of the fiscal year. Assigned fund balance for FY21 04 represents amounts constrained for capital project funds and was assigned by the Finance Director. Unassigned Fund Balance -amounts not contained in the other classifications and available for any purpose. Positive unassigned amounts will be reported only in the General Fund. If another governmental fund , other than the General Fund, has a fund balance deficit, then it will be reported as a negative amount in the unassigned classification in that fund. The order of s pending, regarding the restricted and unrestricted fund balance when an expenditure is incurred for which both restricted and unrestricted fund balance is available should first reduce restricted fund balance and then unrestricted fund balance. The order of spending regarding unrestricted fund balance is that committed amounts should be reduced first, followed by the assigned amounts, and then the unassigned amounts when expenditures are incurred for purposes for which amounts in any of those unrestricted fund balance classifications could be used. Compliance with the provisions of the Fund Balance Classification Policy are reviewed as part of the annual budget adoption process. The Finance Director reports to the Assembly as close to the end of the year as possible t he anticipated year-end fund balance or deficit. The Assembly takes appropriate action to commit or assign, or otherwise allocate prior year fund balances as a part of the budget planning process. The Borough's Special Revenue Funds are used to account for school district s upport, fire and road service areas, federal and state grant programs, street lighting districts, and operations and maintenance programs that are restricted or committed. (e) Revenues, Expenditures, and Expenses Property Taxes Property taxes are based on the assessed value of taxable property as of January 1. Pursuant to Alaska Statute 29.45.240, the Borough establishes the mill rate on or before June 15th. Tax bills are then mailed on or before July 1st. 38 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Co ntinu ed Taxes are du e when billed and ge nerall y become de linqu ent on or after October 16th . 11,e Boro ug h code al so provid es for sp lit pay ment s. If a taxpayer ava il s him se lf of thi s prov ision , o ne-h a lf must be pa id on or befo re Augu st 15th and the re maind er becomes due o n o r befo re Nove mb e r 15th (in lie u of October 15th ). Borough property tax reve nu es are r ecognized in the fi scal year in which th ey become mea surable and ava ilabl e, which is generally th e ye ar following t he yea r t he tax bill s are mailed. All taxes are delinquent on Novembe r 16th, and a tax foreclosure process may com me nc e as outlined in Alaska Statutes Titl e 29. Briefly, thi s ent ai ls the petition for Jud gment of Foreclosure s ig ned by the District Co urt Judge a nd the publication of a ll delinquent ta xes in t he local new spaper fo r four consecutive weeks. Real prope rty tax lien s are e nforced by one general for eclos ure proceeding again st the de linquent properties. Prior to FY2012 all area w id e property taxes were depos ite d into th e Genera l Fund and tben transfened to the other area wide funds . As of FY2012 the Boro ugh ha s set a separa te mill rate for each area w ide fun ction th at wa s funded by property taxe s. Fo r FY2014 th e Borough set a mill rate of 0.03 mill s fo r th e General Fund , 8.75 mill s for th e Edu cation Support Spec ial Re ve nu e Fund , 1.81 mills for the De bt Service Fund and 0.16 mill s for the Renewal and Replacement Projects C apital Project Fund for a total area wide mill rate of 10 .75. This was the same mill rate as FY2013. Severance Taxes Severance taxes are based o n the am ou nt and value of natural re so urces seve red from the environment. Types of reso urces taxed include seafood, gravel and mineral re so urces, and timber. Severance tax returns are se nt to appropriate companies (as determined by the Bo rough Assessor) and are re turned to the Borough Finance Department. The return s are filed quarterly, and are due by the end of the month following the quarter 's end. Borough severance tax revenue s are recognized in the fiscal year in which they become mea s urable and available. Intergovernmental Revenue State s hared revenues, safe communities, State education related entitlement programs and State levied taxes , the proceeds of which are distributed to local governments, are recorded in the fiscal year to which they relate, including accrual at year end if final payments due are measurable and re ceived within approximately two month s after yea r e nd . State of Alaska and Federal government cost reimbursable g rants and contracts are recorded to the extent o f allowable expenditures in the period in which the expenditures were incurred . When both restricted and unrestricted resources are available for use for governmental activities, it is the Boro ugh 's policy to use re stricted resources first, then unrestricted resources as they are needed . 39 KODIAK IS LAND BOROUGH Notes to Basic Financial Statements, Continued Operating and Nonoperating Revenue and Ex penses Proprietary funds distinguish operating reve nu es and expenses fro m nonoperating item s. Operating revenues a nd expenses ge ne rall y re sult from providing services and producing and deliv erin g goo ds in connection with a proprietary fund 's principal ongoing operations. The princip a l operating revenu es o f the Municipal Solid Wa ste Co llecti o n and Di sposal Fund and 911 Service Fund are charges to customers for se rvi ces. The princip a l o perating rev enues of the Ho spital Facilities Fund and the Kodiak Fi she ri es Researc h Center Fund are rents from customers. Operating expenses for proprietary funds includ e costs of services, administrative expen ses, and depreciati o n o n capital assets. All revenue s and ex penses not meet in g thi s definition are reported as non operat in g revenues and expenses. Revenue from hlvestments and Property Amounts earned on inve stment of available cash balances and the rental of building facilities are re corded in the period to which they relate, includin g accrual at yea r end of the bal a nce due , and unr ea li ze d ga in s and losses o n inve stments held at fi sca l yea r end. Land Sales Proceeds a nd Otber Local R ev enues Amounts received pursuant to land sale contracts are recorded on the mod ified accrual ba sis in the fund financial statements and the accrual bas is in the go vernment-wid e financial statements. Other loca l revenue s are recorded on a bas is consistent with their nat ur e in relation to meas urement and avai labili ty standard s . (f) Cash Flows All highly liquid investments, excluding restricted assets, with original maturities of three mo nths or le ss are considered cash equivalents for purposes of th e statement of cash flows . (g) Use of Estimates Preparati on of financial state ments in accordance with accountin g principles generally accepted in the United States of America requires management to make estimates an d assumptions that affect the amounts reported in th ese financial statement s. Actual results may differ from the estimates. Significant estimates include the allowance for doubtful accounts , the useful lives of assets and related accumulated depreciation, and accrued landfill closure and post-closure care costs. (2) Stewardship, Compliance, and Accountability (a) Excess of Expenditures over Appropriations The following fund expenditures exceeded their budget: Fund Special Revenue Funds: Ed ucation Support Kodiak Airport fire District Debt Se rvice Fund - Edu catio n and Health Total expenditures exceedin g budgets 40 Excess 500 59 98,835 $ ==9;,;;9,;;;,3;;,94;,. KODIAK ISLAND BOROUGH No te s to Basic Financial Statements, Continued (b) Deficit Fund Equity The individual fund de ficit s at June 30, 2014, are as follows: Special Revenue Funds: Edu ca ti on Supp ort L.E.P.C Trinity Island Paving Oil Spill Di sa ster Renew al and Repl ace me nt Projec ts Cap it a l Project Fund Tota l fund deficits $ 31 ,674 17,82 1 11 ,985 10 ,566 2,804 ,587 $ 2,876 ,633 The d e ficit in Edu c ati o n Support Fund, L.E.P.C. Fund , a nd Trinity Is land Paving Fund will all be funded by t ra nsfe rs in fro m the General Fund in FY2015. T he deficit in the Renewal and Replacement Projects Ca pital Proj ects Fund will be c overed by a loa n from th e Fac ilitie s Special Revenue Fund , which w ill then be repaid by a mill rate in c rea se. (3) Cash and Investments A portion of the Borough 's investm ent s are in the Alaska Municipal Lea g ue Investment Pool (AM LIP). The investm e nt in AMLIP represents the Borough 's share of ownership in the pool rath er than o wn e rship of s pecific sec uri t ie s . The fair values of the investments in the pool approximates amortized c ost and is equal to the value of pool s hares. To o btain a copy of AMLIP's financial statements contact Key Trust of Alas ka at 10 I West Ben so n Blvd ., Roo m 302 , Anchorage, Alaska 99503 . As of June 30 , 2014, the Borough had the foll owing investments: Investment Maturities !in ~ears} Fair Less Investment Type Value than I Ito 5 6 to 10 U.S. Agency Securities: Federa l Hom e Loan Bank $ 12 ,738,3 06 8,260 ,897 4,477,409 Federal Horne Loan Mortgage Corporation 5,118 ,445 2,007 ,145 3,111 ,3 00 Federal Home Loan Di sco unt Note 19,999,500 19 ,999 ,500 Federal Farm Cred it Ban k 1,189 ,343 1,189 ,343 Federal National Mortga ge Association 5,080,076 999 ,980 4,080,09 6 Municipal Obligations 29,401 ,333 5,428 ,793 2,699 ,41 9 21 ,273,121 Alaska Municipal League Inv estme nt Pool 14 ,65 7,777 14 ,657 ,777 Cert ifi cate s of Depo sit 948 ,897 948,897 $ 89 ,133,677 51,354,092 15,3 17,121 22 ,46 2,464 In addition to the inve stments li sted above, Kodiak Island Borough also had cash equivalents of $5 ,833 ,443 . 41 KODIAK ISL AND BOROU GH Notes to Basic Financial Statements, Continued Interest Rate Risk The Borough's investment policy does not limit investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates . Credit Risk Statutes authorize the Borough to invest in obligations of the United States, the State of Alaska and its political SUbdivisions, savings accounts, certificates of deposit, banker's acceptances, repurchase agreements, and such other legal security instruments . The Borough does not have a fonnal investment policy that restricts investments based on credit risk. At June 30, 2014, the Borough's U.S. agencies bonds were rated AAA by Standard & Poor and Fitch Ratings, and AAA by Moody's Investor Service. At June 30, 2014, the Borough's investment in the Alaska Municipal League Investment Pool was unrated. Concentration of Credit Risk The Borough places no limit on the 1lI110untthe Borough may invest in anyone issuer. At June 30, 2014, the Borough had 50% percent of its investments in U.S . Government agency securities. Custodial Credit Risk -Deposits The Borough maintains a cash pool that is available for use by -all funds . Each fund's portion of this pool is reported on the Balance Sheet and Statements of Net Position as "Equity in Central Treasury" or amounts "due to/from other funds." The Borough bank accounts are insured by the Federal DepositoI)' Insurance Corporation (FDIC) to a maximum of $250,000. U .S. Treasury obligations collateralize the remaining bank balance, which is held by Bank of New York in a Tri-party collateral agreement with Wells FargQ, the pledging fmancial institution's agent, in the Borough's name. Custodial Credit Risk -Investments For an investment, this is a risk that, in the event of the failure of the counterparty, the Borough will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The Borough manages its custodial credit risk in investments by requiring collateralization agreements . The Borough had no debt securities exposed to custodial credit risk at June 30, 2014 . - (4) Annual Appropriation to the School District An armual appropriation is made to the School District. In addition to the annual appropriation, the Borough provides the School District, without charge, general liability and property insurance, data processing services, the annual independent audit, mental health serv ices, and grounds maintenance services. 42 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued (5) Receivables Governmental Funds Eduado. and Education and Capital Project Funds Kodiak High Rmewaland Other Total General Support Special BealtbDebt Sellool Replacement Govtramentll Govenmental Fund Revenue Fund Servlu: Fund Renovation Projects Fund, FUDds Receivab le s: Grut~· $ 292,983 49,3 96 338 ,86 4 70,160 43 ,83 8 176,1 40 971,381 Taxes 434,511 170,206 33,486 . 2,580 17,776 658 ,55 9 Customers and other 14,740 B,982 87,722 Gross ro::eivablca 742,234 219 ,602 372,350 70,160 46 ,4 18 266,898 1,717,662 Less: al lowance for unco Jl ectibles (15,828) !,5,828 1 Net total receivables S 726,406 219,602 372,350 70,160 46,418 266,898 1,701,834 Entt!l!rue FuDds Mumcipal Kodiak Othe, SoUd Waste Fisheries NODlDljor Total Total Total CoUection UoopiUl Ratarch EBterprise Ellta'prise Go vcrDmentll Pri .... ry and !!!e0sal Fac:iJities Ceo", Fund hads Fuods Goveroment Receivables: Grut~ $ 4,047,505 38,553 4,086,05 8 971,381 5,057,439 Taxes 658,559 658,559 Customers and other 260,897 40,046 6,110 307,053 87,722 394,775 Gross receivables 4,308,402 38,553 40 ,046 6,110 4,393 ,111 1,717,662 6,110,773 Less: allowance for WlCOllcctibles (15,828 1 !15,B28 1 Net total receivables $ 4,308,402 38,553 4l!,M6 6,110 4~§3 .111 1,701 ,834 6,094,945 (6) Deferred Inflows and Uaearned Revenues Govenlmental funds report deferred inflows in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Govenunental funds also report unearned revenues in connection with resources that have been received, but not yet earned, At June 30, 2014, the various components of deferred inflows and unearned revenue reported in the governmental funds were as follows: Unavailable property taxes receivable Unavailable land sales receivable Grant advances prior to expending all proceeds Total unavaiIablelunearned revenue for governmental funds $ $ 43 Unavailable 194,852 513,165 54,163 162.180 Unearned 134,815 134,815 Total 194,852 513,165 188,918 897595 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued (7) Capital A ssets As noted in Footnote (12), the Borough leases the Kodiak Island Hospital and Care Center to Sisters of Providence. The value of the leased assets and associated depreciation are reflected in the Hospital Facilities Fund following. Capital asset activity for the year ended June 30, 2014 was as follows : Beginning liiuling Balance Increase Decrease Balance Governmental activities: Capital assets, not being depreciated: Land $ 23 ,467,304 (194 ,516) 23 ,272,788 Construction work-in-progress 12,604,897 35,560,550 P02,450) 47,862,997 Total 36,072,201 35,560,550 ~496,96~ 71,135,785 Capital assets , being depreciated : Buildings and improvements III,772, 770 55,OIl IIl,827,781 Improvements other than . buildings 21,164,554 53,084 21 ,217,638 Equipment 2,936,661 241,795 3,178,456 Infrastructure 5,762,722 5,762,722 Total 141,636,707 349,890 141,986,597 Less accumulated depreciation for: Buildings and improvements 64,687,487 2,551,704 67,239,191 Improvements other than buildings 6,177,095 1,150,876 7,327,971 Equipment 2,004,229 195,411 2,199,640 Infrastructure 4,787 ,393 144,068 4,931,461 Total 77,656,204 4,O4!.059 81,698,263 Total capital assets being depreciated, net 63,980,503 p,69~169~ 60,288,334 Total governmental activities , net $ 100,052,704 31,868,381 ~496,966) 131,424,119 44 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continned Beginning Ending Balance Increase Decrease Balance Business-type activities: Municipal Solid Waste Collection and Disposal Fund capital assets, not bcing depreciated: Land $ 1,651,248 1,651,248 Construction work-in-progress 9,631,578 8,470,829 18,102,407 Total 11,282,826 8,470,829 19,753,655 Capital assets, being depreciated: Unclassified utility plant in service 2,178,733 2,178,733 Improvements other than buildings 2,410,717 2,410,717 MachineI)' and equipment 1,928,803 1,928,803 Total 6,518 ,253 6,518,253 Less accumulated depreciation fur: Unclassified utility plant in service 1,169,411 42,055 1,211,466 Improvements other than buildings 1,301,154 132,666 1,433,820 MachineI)' and equipment 1,481,881 103,621 1,585,502 Total 3,952,446 278,342 4,230,788 Total capital as sets being depreciated, net 2,565,807 ~78,342l 2,287,465 Total Municipal Solid Waste Collection and Disposal Fund, net $ 13,848,633 8,192,487 22,041,120 45 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continu ed Beginning Ending Balance Increase Decrease Balance Hospital Facilities Fund, Capital assets , not being depreciated: Artwork .$ 16,091 16 ,091 Land 10 ,251 10 ,251 'Construction work-in-progress 10 ,971 ,693 9,969,269 20,940,962 Total 10 ,998 ,035 9,969,269 20 ,967,304 Capital assets, being depreciated: Building s 27 ,131,044 27 ,13 1,044 Improvements other than building s 401 ,046 401,046 Machinery and equ ipm ent 3,627 ,068 3,627,068 Total 31 ,159 ,158 31,159,158 Less accumulated depreciat ion for: Bui ldings 14 ,922,012 800,044 15,722 ,056 Impr oveme nt s other than building s 197 ,122 14,176 211,298 Machinery and equipment 3,401 ,388 53,693 3,455,081 Total 18 ,520 ,522 867,913 19,388,435 Total capital assets being depreciated , net 12,638,636 (867 ,913) 11,770,723 Total Hospital Facilities Fund , net $ 23 ,636,671 9,101,356 32 ,738 ,027 46 -' I KODIAK ISLAND BOROUGH Notes to Basic Financial Statements , Co ntinued Beginning Ending Balance Increase Decrease Balance Kodiak Fisheries Re se arch Center Fund Ca pital assets , not being depreciated: Cons tru cti on work-in-progress $ 18 7,238 844 ,135 1,031,373 Capi tal assets, being depreciated : Buildings 17,840 ,410 17 ,840 ,410 Improve ment s other than buildin gs 1,058 ,26 1 1,058,261 MachineI)' and equipment 1,187 ,679 1,187,679 Tota l 20,086 ,350 20,086 ,350 Less accumu lated depr eciatio n for: Buildings 8,323,761 594,683 8,918,444 Improvem ent s other than buildings 481,785 35,432 517 ,2 17 MachineI)' and equipment 1,161 ,559 6,028 1,167,587 Tota l 9,967, I 05 636 ,143 10 ,6 03,248 Total capital ass et s being depr ec iated , net 10,119 ,245 (636 ,14 3) 9,483 ,102 Total Kodiak Fi sherie s Re sea rch Center Fund , net $ 10 ,306,483 207,992 10 ,514 ,475 47 KODIAK ISLAND BOROUGH Notes to Basic Financia l Statements, Continued Beginning Ending Balance Increase Decrease Balance Total bu siness-ty pe activities: Capita l assets, not being depreciated: Artwork $ 16 ,09 1 16 ,091 Land 1,66 1,499 1,66 1,499 Co nstructi on work-in -progress 20,790,509 19,28 4,23 3 40,074,742 Total 22 ,468,099 19,284,233 41 ,752,332 Capital assets, being depre ciated: Unclassified utility plant in serv ice 2 ,178 ,733 2 ,178 ,733 Buildings 44 ,97 1,454 44 ,971,454 Improvement s other than buildings 3,870,024 3,870,024 Machinery and equipment 6,743,550 6 ,743,550 Total 57,763 ,761 57 ,763 ,761 Less accumu lated depreciati on for: Un classified utility plant in se rvice 1,169,411 42,055 1,211 ,466 Bui ldings 23 ,189,205 1,394,727 24,583,932 Improvement s other than bui lding s 2 ,036,629 182 ,274 2,218,903 Machinery and equipment 6,044,828 163,342 6,208,170 Total 32,440,073 1,782,398 34,222,471 Total capital assets being deprec iated, net 25,323,688 (1 ,782,398) 23,541 ,290 Total business-type activities, net $ 47 ,791,787 17,5 01,835 65,293,622 48 KODIAK ISLAND BOROUGH N o tes to Basic Financial Statements, Contillued Depreciation expense was charged to t he departments and functions ofthe prim ary governm e nt as follows: General government Public sa fety Emergency prepa redness Primary and seco nd ary educati o n T ot al -governmenta l ac tiviti es Business-type activitie s: Municipal so lid wa ste collection a nd disposal Hos pital facilitie s Kodiak fi s herie s research center Total -bu s in ess -ty pe activities Total primary governm ent (8) Interfund Receivables, Payables and T ransfers (aJ filter/and Receivables allli Payables In terfund balances at June 3 0, 20 14 cons isted of the following: (1) Due to / from other funds: Receivable Fund Payable Fund M ajo r gove rnmental fund s: $ 652 ,877 174 ,917 2,500 3,211,765 4,042 ,059 278 ,342 86 7,9 13 636 ,143 1,782 ,3 98 $ =.;;5~,8;;;,24,;,;,4,;,;5;,;,7= General Fund General Fund General Fund R e newa l and Replacement Projects $ Facilities Special Revenue Fund Other Governmental Funds Kodiak Fisheries Research Center Enterprise Fund General .Fund Total primary government (2) Advances to / from other funds: Rece ivable Fund Payable Fuod $ Majo r governmental fund s - Facilities Special Revenue Fund Renewal and Replacement Project $ Hospital Facilities Enterprise Fund Kodiak Fisheries R esearch Center E nterpris e Fund Amount 95 ,0 72 60,2 42 54,163 174,3 12 383,789 Amount 2,745,028 876,8 72 3,095 ,000 Total primary gove rnm ent $ =~6h' 7,;,;1 6;g;,9,;;,00~ 49 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued The balance of $3,095,000 due the Facilities Fund from the K.F.R.C. Fund resulted from a loan of $8 ,000,000 that was made to help pay for the . construction of the building. $2,555,000 is not sc heduled to be paid in FY2015 and is record ed as a noncurrent liability in advances from other funds. The balance of $876,872 due the Facilities Special Revenue Fund from the Hospital Facilities Enterprise Fund re sulted from a loa n of $1,600,000 that was made part of the cost of a lawsuit. $794,149 is not sc heduled to be paid in FY20 15 and is recorded as a noncun'e nt liability in advances from other funds. All remaining interfund balances were s hort term loan s to cover negative cash balances at year end. The outstanding short tern1 balances between funds result from the time lag between the dates that (J) inter-fund goods and se rvice s are provided or reimbursabl e expenditures or expenses occur, (2) tran sac tions are rec orded in the accounting system, and (3) payments between funds are made . (b) LOllg-term bllerftilul Borrowillgs In October 199 7 the Facilities Special Revenue Fund loaned $8,000,0 00 to the Kodiak Fisheries Research Center Enterprise Fund. This loan was to help finance the construction of the Kodiak Fisheries Research Center. The loan from the Facilities Special Revenue Fund is accounted for as a long-term inter-fund advance , while the liabi lity in the Kodiak Fisheries Re search Center Enterprise Fund is accounted for as a long-term inter-fund borrowing. The advance bears interest at 7%, and the scheduled payments for the next five fiscal years ended and thereafter are as follows: Princil!al Interest Total Year ending June 30: 2015 $ 540,000 19 7,750 737,750 2016 575,000 158 ,725 733,725 2017 615 ,000 117,07 5 732,075 2018 660,000 72,450 732,450 2019 705,000 24,675 729 ,675 $ 3,095,000 570,675 3,665 ,675 50 (c) Tr ansfers Oul Major Governmenta l Funds: General Fund KODIAK ISLAND BOROUGH Notes to Bas ic Financial Statements, Continued In July 2 00 3, the Facilities Special Revenue Fund loaned $1,600 ,000 to the Hos pita l Facilities Enterp ri se Fund in order to he lp fund c urren t operations. The loan from the Facilities S pecial Revenue Fund is accounted for a s a lo ng-te rm interfund advance , while th e liability in the Hos pital Faci litie s Enterprise Fund is acco unted for as a long-term interfund borrowing. The advance bears interest at 4%, and the sc hed ul ed pay me nt s for the next five fiscal ye ar s and there aft e r are as follows: Princil!al Interest T otal Year en din g Jun e 30: 20 15 $ 82 ,723 34,255 11 6,978 20 16 86 ,06 5 30 ,9 13 116 ,978 2017 89,542 27,436 116 ,978 20 18 93,159 23,819 116,978 20 19 96 ,923 20 ,056 116 ,979 2020-2023 428,460 39,45 1 467,9 11 $ 876,872 175,930 1,052 ,802 Trallsfers Interfund tran sfers have been made in accordance with budget ordinances. Funds are transferred from one fund to s upp ort expend it ures of ot her funds in accordance with the a uth ority esta bli shed for the individual fund . Transfers between funds during the yea r ended June 30, 20 14, were as follows: Transfers In CO \'ernm ental Fund s Enl erl!ri se Fund s R en~'.1 and Education Educati on Replacement Municipa l Support and Hea lth Pro jects Other So lid WlS le Ho spit al Specia l Reve nue Debt Service Ca pital Projet'l Governmental Co ll ection and Facilitits fund Fund Fund Funds Di sl!2 sa l Fund Fund Tota ls I 220.000 250.000 13,500 483.500 Facilities Special Reve nu e Fund 11 0,000 232 ,402 161,%3 18,000 522,365 Other Governmenta l Funds 661500 661500 Total transfe~ S 330,000 482 ,402 161,963 18,000 13,500 66,500 1.072,3 65 A s ummary of significant transfers are as follows: • The General Fund tran sfe rre d $220,000 to the Education Support Special Revenue Fund to cover school di stri ct suppo rt. • The Genera l Fund transferred $250,000 to the Education and Health Debt Service Fund to pa y for debt se rvice on sc hoo l di strict and hospital bonds . • The General Fund transferred $13 ,500 to the Municipal Solid Waste Collection and Disposal Enterprise Fund to pay for garbage disposal for area thrift shops. 51 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued • The Facilities Special Revenue Fund tran sferred $110,000 to the Education Support Special Revenue Fund to cover schoo l district insurance costs. • The Fac iliti es Special Revenue Fund transferred $232,402 to the Education and Health Debt Service Fund for debt se rvice on schoo l di s trict and ho s pital bonds. • The Facilities Special Revenue Fu nd transferred $161,963 to the Renewal and Replacement Projects Capital Project Fund to pay for capital improvements . • The Faci lities Special Revenue Fund transferred $18 ,000 to the Buildin g and Grounds Special Revenue Fund to pay additi ona l s now removal costs at school sites. • The Fern Fuller Trust Specia l Revenue Fund transferred $66 ,500 to the Hospital Facilities Enterprise Fund for the purchase of new equipment. The remainder of this page left blank intentionally. 52 (This page was left blank intentionally) KODIAK ISLAND BOROUGH Notes to Bas ic Financial Statements, Continued (9) L ong Term Debt (a) Gelleral Obligatioll BOllds alld otfler Debt The Borough iss ues ge nera l obligation bond s a nd other debt to provide fund s for the acq uisition and con struction of maj or cap it a l facilities. General ob li gation bond s a re direct ob li gat io ns a nd pledge the full faith and cred it of the Borough. Genera l ob li gati o n bond s and other debt c urrentl y outstandin g a re as fo ll ows : Interest Principal I!!;tments TYI!: of debt Rates Dates Issue dates J\1aturi!l: dates Dates Amount Gen era l obligation bo nd s -2004 C Se ri es 4 .0-5.00A, 1/1-7/1 7 /2112004 7/1/20 14 071011 14 Gen e ral ob ligat ion bonds -2004 0 Series 4 .0% S/]-l l1 l 121 1/2004 1 111120 14 111011 14 530,000 530.000 General obligatio n bonds -2008 A Series 4.0-5.0% 4/1-10/1 11 /112008 4/1/2028 04/0 1115 335,000 04/01/16 350.000 04 /011 17 370,000 04/011 18 380,000 04/011 19 400,000 04/01/20 4 15,000 04/0 112 1 430,000 04 /01122 450,000 (WOIl23 470,000 04/01124 490,000 04 /01125 515,000 04/0 1/26 540,000 04101 127 565,000 04/01128 595,000 6,305,000 Ge neral o bligation bonds -2009 A Series '3.54% 2/1-8/1 4 /912009 211120 14 021 14 /14 53 KODIAK ISLAND BOROUGH Note s to Ba s ic Financial Statements, Continu e d Authorized Prior Icars Balance at Retiredi' Balance at Fiscal year Anlount Iss u cd R e tire d Julv 1.2013 Iss ued Refunded June30,2014 2004 9 ,300,000 9 ,300,000 8 ,865,000 435,000 435,000 2004 11 ,050,000 11 ,050,000 10,0 10,000 1,040,000 5 10 ,000 530 ,000 2008 8,000,000 8,000,000 1,375,000 6 ,625,000 320 ,000 6 ,305,000 2009 6 ,740,000 6 ,740,000 5 ,295 ,000 1,445,000 1,445,000 54 KODIAK ISLAND BOROUGH Notes to Bas ic Financi a l Statements, Continued Intcrest Princie!1 ~l:!!!ent.s Tl2: ofdcbt Rates Dates Issue date Maturity dates Date s Amount General o bligatio n bonds -201 1 Serie s One 2.05%-S.200/o 9/1-3 /1 311 /20 11 3111 203 1 03 /0111 5 305,000 03/01116 310,000 03/01 /17 320,000 03 /01 /18 330,000 03 /01119 340,000 03 /0 1/20 355 ,000 03 /01 12 1 370,000 03 /01 /22 3 85 ,000 03/01123 405 ,000 03 /01124 425,000 03 /01 125 445 ,000 03 /01126 465 ,000 03/01 /27 485 ,000 03/01128 510,000 03/01129 535,000 03 /0 1/30 565,000 03 /01 /3 1 595,000 7,145,000 General ob ligation bonds -2012 Series A 2.0-5.0% 311 -911 5124120 12 91112024 91112014 91112015 435,000 911120 16 455,000 911120 17 460,000 9/112018 480,000 9f112019 495,000 91112020 525,000 9/1/2021 545,000 9/1/2022 570,000 9/112023 600,000 91112024 630,000 5,195 ,000 55 Authorized Fiscal year Amount 2012 8,000,000 2012 5,230,000 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued Prior years issued Retired 8 ,000 ,000 560,000 5,230,000 35,000 Balance at Julyl,2013 7 ,440,000 5,195,000 56 Issued Retired' Refunded 295 ,000 Balance at June30,2014 7,145 ,000 5,195,000 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued Interest Principail!!.r!!!cnts Type of debt Rates Dales Iss ue dates Maturitv d.'ltes Dates Amount Ge nera l ob lig ation bond s -20 12 Series B 2.0-5.0% 3/1-9/1 5124120 12 911 /2024 9/1/2014 911120 15 5 30 ,000 9/1/20 16 550,000 9/1/20 17 565,000 911 /20 18 585,000 9/112019 610,000 9/1/2020 640,000 911 /2021 665,000 9/1/2022 695,000 9/112023 730,000 9/112024 770,000 6 ,340,000 Ge n era l ob li gation bonds -2013 Series One 3.8-5.0% 21 1-8/1 3/112013 21 1/2033 211120 15 730,000 21 1/20 16 760,000 21 1/2017 790,000 21112018 820,000 21 1120 19 855,000 21 112020 895,000 21 112021 935,000 21 112022 970,000 21112023 1,0 10,000 21112024 1,050,000 21 112025 I ,JOO,<XXl 21 1/2026 1,155,000 21 112027 1,2 15,000 21112028 1,275,000 21112029 1,340,<XXJ 21 1/2030 1,405,000 21 1/203 1 1,475,000 21112032 1,550,000 21 112033 57 Authori zed Fiscal year Amount 2 01 2 6 ,385 ,000 2013 21 ,595,000 KODIAK ISLAND BOROUGH Notes to Bas ic Financial Statements, Continued P ri or years Issued Retired 6 ,3 8 5,000 4 5 ,000 2 1,595,000 Balance at Ju ly 1,2013 6,340,000 21 ,595,000 58 Iss u ed Retired! Refunded 635 ,000 Balance at J UD e 30, 2014 6 ,340,000 20,%0,000 KODIAK ISLAND BOROUGH Notes to Bas ic F inan c ia l State me nts, Continu e d Interes t Princi p:1 1 pa;rm e n ts T~ of debt Rat e s Dates iss u e date Maturi!r w l te s D ates A mount Gen era l ob li gat ion bonds -20 14 Ser ies One 2.O-S.00/Q 3/1-9/1 3 /1/2013 3 /1/2034 3/1/20 15 740,000 31 1120 16 785,000 3/1120 17 8 10 ,000 3/1120 18 840,000 3/1/2019 880,000 3/1/2020 900,000 3/11202 1 9 15 ,000 31112022 965,000 3 /112023 1,010,000 3 /112024 1,060,000 3 /112025 1,1 10,000 3 /112026 1,150,000 3/1/2027 1,205,000 3/1/2028 1,265,000 3/1/2029 1,330,000 3/112030 1,395 ,000 3/1/203 1 1,465,000 3/112032 1,535,000 3/1/2033 1,6 10 ,000 3 /112034 1,690,000 22,660.000 C lean water -Kar luk 3.92-4.05% •• •• •• 611/20 15 6 ,039 6/1120 16 6,130 6111 2 0 17 6 ,22 2 6/]/20 ]8 6,3 15 61 1/20 19 6,4 10 6/112020 5.926 37.042 $ 69,172,042 59 Authorized Fiscal year A mount 20 14 22,660,000 1998 400.000 , 1 $ _~99;.;,3:;:60::.,000=_ KODIAK ISLAND BOROUGH Notes to Basic Financial State ments, Co ntinu ed P I'jor ' years Issued Retired 97,0 19 54,027 76,397,0 19 26,239,027 60 Balance at July 1,2 013 42,992 50,157,992 Issued 22,660,000 22,660,000 Retired! Refunded 5,950 3,645 ,950 Bal ance at June 30, 20 14 22,660,000 37,04 2 69,172,042 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued The annual requirements to amortize all general obligation bonded debt and the ADEC loan payable outstanding as of June 30, 2014, are as follows: General AD EC obli;ation loan ~.yable Total loterest Year ending Jun e 30: 2015 $ 2,640,000 6,039 2,646,039 3,119,885 2016 3,170,000 6,130 3,176 ,130 2 ,989,362 2017 3,295,000 6,222 3,3 01,222 2,869,212 2018 3,395,000 6,3 15 3 ,401 ,3 15 2,750 ,462 2019 3,540,000 6,410 3,546,4 10 2,617,362 2020-2024 19,980,000 5,926 19 ,985,926 10 ,756,373 2025-2029 18 ,200,000 . 18 ,200,000 6 ,158 ,180 2030-2034 14 ;915,000 14 ,9 15 ,000 1,964,556 $ 69 ,135,000 37,042 69,172 ,042 33,225 ,3 92 At June 30, 2014, there was $665,711 available in the Education and Health Debt Service Fund to serv ice general obligation bonds. There are a number of limitation s and restrictions contained in the various bond indentures. The Borough is in compliance with all significant limitation s and restrictions. The remainder of this page leji blank intentionally. 61 KODIAK ISLAND BOROUGH Notes to Basic Financia l Statements, Continued (b) Notes Payable As of June 30,20 14 , the Borough had the followin g notes pa y able outstanding in the Municipal So lid Wa ste Co ll ect ion and Di s po s al Enterpr ise Fund: No te payable (AC WF #5 0503 1) to Alaska Department of Environmental Co nservati on (A DEC ), to be paid within 20 years. From June 2,1999 until April 28, 2005 inter es t accrued at 2.5%. From Apr il 29 , 2005 to June 30, 2014 interest accrued at 1.5%. The fir st loan payment was made on April 1,2012, with payment s of$1 00 ,00 0 being due on Apr il I in each suc cessiv e year. Note payable (ACWF #50504 I) to Alaska Department of Environmental Co nser vation (A DEC), to be paid within 20 yea rs. Intere st acc rued at 3.8% over the life of the loan. The fir st loan payme nt is due one year following sustantial comp letion and initi ation of operatio n of th e facility . No te payable (AC WF #505061) to Alas ka Department of Environmenta l Co nser vation (A DEC), to be paid within 20 yea rs. Int erest accrued at 3.8% over the life of the loan. The fir st loa n payme nt is du e one year following sustantial co mpl etion and initiation of operat ion of the facility. On September 15 ,20 I I the Boro ugh iss ued a $3,275 ,000 revenue bond , with a premium of$384,379. The bond wa s marketed by the Alaska Municipal Bond Bank. Interest accru es at rate s between 3.0 and 5.0% with payments due on Septemb er I and March I of each year. The bond will mature on September 1,2026 . $ =...,;1,;;,7,;;,00;:,;,0;;,;0;;;,0= $ =~4;;;,4;;;4,;,1 ,;:,;65;,;;3= $ ==,;,;75;,;;;0,,;;;00;;;,0 = $ =~3,~3 I;;o5,~24~2= As of June 30, 2014, the Borough had the following bond payable outstanding in the Hospital Facilities Enterprise Fund: On June 19 ,2013 the Borough iss ued a $ I 7,1 10,000 reven ue bond , with a premium of$I,707,320. The bond was mark eted by the Alaska Municipal Bond Bank. Intere st accrue s at rate s bewleen 2.0 and 5.0% with payment s due on June I of each year. The bond will mature on June 1,2033. 62 $ =,,;1,;;,!8 ',;,;7 0,;;,!3 ,,;,;49;;;,8 = KODIAK ISLAND BOR OUGH Not es to Basic Fin anc ia l Statements, Continu ed (e) Challges ill LO ll g -term L iabilities Long-term lia b ili ty ac t iv ity for the year en ded J une 30, 2 01 4, w as as fo ll ows: Balance Balance June 30, June 3 0 , D u e within 201 3 Ad ditions Re ductions 201 4 one ~'ea r Governm en tal activities : Bo nds pa yable : General obligation bonds $ 50,1 15,000 22,660,000 3,640,000 69 ,135 ,000 3,640,000 Bond premium 5,12 1,114 2,427 ,4 32 455 ,990 7,092 ,556 334 ,6 18 55,236,1 14 25 ,087 ,432 4,095 ,990 76,227,556 3,974,6 18 AD EC loan s 42,992 5,950 37,042 5,950 Compensated ab se nces 298,640 247,07 1 217,182 32 8,529 2 17,182 TOiai $ 55,577,746 25 ,334 ,503 4 ,3 19 ,122 76 ,593,127 4 ,197 ,75 0 Bu siness·type activit ie s: Municipal Solid Waste Collect ion and Dis posal : Landfi ll closure and po st-cl osure costs $ 5,389,650 1,42 1,527 3,968,123 Note s payable 7,34 6,324 3,147 ,783 287 ,2 12 10,206 ,895 270 ,000 Total $ 12 ,735 ,974 3,14 7,783 1,708,739 14,175 ,018 270,000 Hos pita l Faci lities: Lon g te rm in terfund borrowi ngs $ 956,382 79,5 10 876,872 82 ,723 Bond s payable 18,817,320 11 3,822 18,703,498 605,000 Tot al $ 19,773,702 193 ,332 19,580,370 687 ,723 Kod iak Fisheries Research Cente r : Lo ng te rm inter fu n d borrowings $ 3,595 ,000 500,000 3,095 ,0 00 540,000 Total $ 3,595,000 500,000 3,095 ,000 540,000 Busin es s-type activit ies: Lan dfill clos ure and post- clo sure costs $ 5,389,650 1,42 1,527 3,968,123 Long term inte rfun d borrowings 4,551,382 579,510 3,971,872 622 ,723 No teslbonds payab le 26,163 ,644 3,147 ,783 401 ,034 28,910,393 875,000 Total $ 36,104,676 3,147 ,783 2,402 ,071 36 ,850,388 1,497,723 For governm enta l acti v it ies , compe nsated ab sences are ge nerally liqui da ted by the Gen era l Fund, 63 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued (10) Fuud Balances Detailed infomlation related to amounts classified as nonspe ndable , committed and assigned fund balances in governmental funds at June 30 , 2014 are as foll ows: Education Kodiak Facilities and Hea lth Hi gh Sc hool Special Debt Renovati on Other O:ne131 Rev enu e Serv ice Cap ital Qwcmnx:ntal Fund Fun d Fund Proj ec t Fund Fund s Total Nonspendable: Prepaid it ems $ 1,459 1,45 9 lon g tenn rece ivab le s 513,765 513,765 TOlal nonspendable S 1,459 513 ,765 515,224 Co nmitted: Facility upgrades 39,548,944 39,54 8,944 Debt service 665,711 665 ,711 Fire and Road Service Areas 1,33 6,940 1,33 6,940 Bu ildin gs and Gounds 323,281 323,281 Street ligh tin g Dis tricts 44,298 44,298 Tourism DevelopJrent 133,682 133,682 Mission lake Tid e GlIe 37,417 37,417 Fern Fuller Trusl 264,856 264,856 Tolal committed $ 39,548,944 665 ,711 2,140,474 42 ,3 55,129 Assigned: Capn al proje ct s and upgrad es S 25,626 ,380 3,249,119 28 ,875 ,499 (11) Solid Waste Landfill Closure and Post Closure Care Costs State and federal laws and regulations require that the Kodiak Island Borough place a final cover on its landfill when closed and perform certain maintenance for a number of years after closure. In addition to operating expenses related to current activities of the landfill, an expense provision and related liability are recognized based on the future closure and post closure care costs that will be incurred based on the date the landfill no longer accepts waste. The recognition of these landfill closure and post closure care costs is based on the amount of the landfill used during the year. The estimated liability of landfill closure and post closure care costs is $3,968 ,123 as of June 30, 2014 , which is based on 93% usage (filled) of the landfill. 64 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued The landfill is estimated to be filled and unusable by the year 2016. During the year ended June 30,2014, a reduction of $1 ,421,527 was recorded . This reduction was due to approximately 5 acres of the existing landfill being closed during the year. The Borough incurred $1,044 ,056 of expenses related to the closure of 5 acres, with the additional $377,471 reduction resulting from a change in the accounting estimate An estimated additional $491,566 will be recognized as closure and post closure care expenses between the date of the Statement of Net Position and the date the landfill is expected to be filled to capacity . The estimated tota l current cost of the landfill closure and post closure care of $4,459 ,689 is based on the amount that would be paid if the landfill were closed as of June 30, 2014 . However, the actua l cost of closure and post closure care may be higher due to inflation, changes in technology , or changes in landfill law s and regulations. The Kodiak Island Borough is required by state and federal laws and regulations to make annua l contributions to finance closure and post clo sure care. The Kodiak Island Borough complies with these requirements by annually recording the liability based on the estimates provided by the Kodiak Is land Borough's Engineering/Facilities Director. It is anticipated that future inflation costs and additional costs that might arise from changes in post closure requirements , due to changes in technology or more rigorous environmental regulation s, for example, will be financed primarily by cliarges to future landfill users and secondarily by taxpayers. In the fiscal year ended June 30, 1999 the Borough began initial planning for lateral expansion of the landfill (Phase 3). In May of 20 12 bidding on the project was begun and work is ongoing and expected to continue through 2015. The lateral expansion has an estimated forty year capacity. Capital costs to complete is estimated at $10,000,000. (12) Insurance and Risk Retention The Kodiak Island Borough is exposed to numerous ri sks of loss associated with the operations of a government. These potential losses include , but are not limited to , employee relations and injuries, contracts, theft, loss or damage of property and general liability. The Borough manages its risks from these potential losses by participating in the Alaska Municipal League Joint Insurance Association , as well as purchasing commercial insurance coverage . This insurance has provided the Borough with adequate coverage in the past. There were no significant changes in insurance coverage obtained and there were no claims or settlements that exceeded insurance coverage in any of the past three fiscal years. The Borough is a member in good standing of the Alaska Municipal League Joint Insurance Association (JIA), a governmental insurance pool established by the Alaska Municipal League. Claims are covered on an occurrence basis. JIA provides risk management services, appraisal services and there is also a separate pool for policy liability . The Kodiak Island Borough Finance Director and the Kodiak Island Borough Mayor are members of the Board of Directors ofthe JIA. 65 KODIAK ISLAND BOROUGH Notes to Bas ic Financial Statements, Continued The resp o nsibilitie s of both JIA and the palticipants are as follow s: (a) Respollsibilities of JIA JIA shall perform the following in struction s in di sc harging it s re sponsibilities: • Provide in s urance coverage as nece ssary for property, including buildin g and contents, automobile, mob ile equipment and data processing equipment, casualty, includin g general liability, publi c official s' and employees' liability, auto liability and e mpl oyee benefit liability ; workers' co mpen sation , including employers' liability; commercial blanket bond ; and time element. • Assist each participant's assigned ri sk mana ge r with the implementati on of that function . • Provide loss prevention and safety and consulting services to participants as required . • Provide c laim s adju sting and s ubrogation serv ices for claims covered by the associati o n 'sjoint in s uranc e anangement. (b) Respollsibilities of tile Participallts The Participants shall have the foll ow ing respon s ibilities: • The Borou gh Assembly or appointing official of each participant shall appoint a represe ntative as provided in Article 5 , Section 2 of the bylaws and at least one alternate represe ntative to attend member meetings. • Ea ch participant shall appoint an employee of the participant to be re s ponsible for the risk management function within that entity and to serve as a liai so n between the participant and IIA with re s pect to risk man agement. • Each participant shall maintain an active safety officer and/or committee, and shall comply with all recommendations of JIA concerning the development and implementation of a loss control policy to prevent un safe practices. • Each participant shall maintain its own set of record s as a loss log , in all categories of loss to insure accuracy of JIA 's loss reporting system. (13) Rental Revenues (a) Hospital Facilities Ellterprise Flllld The Kodiak Island Borough Assembly leases the Kodiak Island Hospital and Care Center premise and equipment to Sisters of Providence d.b.a. Providence Kodiak Island Medical Center who assumed responsibility for the hospital 's operations as of April 21 , 1997 . The lease agreement is effective for a tem of twenty years from that date. The lease is cancelable by either party with a one year notice. The hospital capital assets, the lease income, and all other costs relating to the agreement are accounted for by the Borough in the Hospital Facilities Enterprise Fund . 66 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements , Continued The agreement with Providence specifies that the Borough will contribute at least $108,000 per year for the purchase of new and rep lacement equipment for the hospital. The Borough is also required to fund any major maintenance and repairs projects exceeding $25,000 in cost. The Borough receives $60,000 per month in rental revenue. In August, 2003, the lease was amended and required Providence to pay an additional lease payment of $1 ,300,000 in 2004 . In October 2005 the lease was amended to remove the requirement that Providence had to pay 50% of the net revenues of the hospital, up to $600,000, in rental revenues . Providence now has to spend 50% or more of their net profit, up to $200,000 , on equipment. The lease was also amended to have the $108,000 of equipment which the Borough was required to purchase annually to become Providence property rather than Borough property . (b) Kodiak Fisheries Research Cel/fer The Kodiak Fisheries Research Center (KFRC) leases its premi se to the General Services Administration (GSA), Alaska Department of Fish and Game (ADF&G), the GSA on behalf of Department of Commerce, National Oceanic and Atmospheric Administration (NOAA), and the University of Alaska Fairbanks (UAF). The lease with the GSA is /Tom March I, 2003 , through September 30, 2018, cancelable with 120 days notice . Annual rent varies from $37 ,500 to $41,000. Rent was $41,000 in 2014. The lease with ADF&G is from October 1, 1998 through September 30,2018, with an option to extend for up to two additional five year periods. Annual rent is $52,800. The annual rent /Tom 2012 through 2018 will be adjusted for the tenant's proportionate share of building expenses and utilization of the seawater system . The lease with NOAA is from October I , 1998 through September 30, 2018, with an option to extend for up to four additional five year periods. Annual rent is $756,000 plus operational and maintenance expenses of $754,437. Operational and maintenance expenses are adjusted every five years to actual costs. The lease with UAF 'was originally from October I, 1998 through September 30, 2018, cancelable with 30 days notice, with an option to extend for up to two additional five year periods. The State of Alaska cancelled the lease for laboratory space effective September I, 2012, but has continued leasing the dorm space. The State has not given notice to cancel this section of the lease in 2014. (14) Retirement Commitments The Borough has adopted Governmental Accounting Standards Board (GASB) Codification P20, Accoul/til/g for Pel/siol/s by State al/d Local Govemmel/tal Employees and GASB Codification P50, Accoul/til/g al/d Fil/al/cial Reportil/g by Employers for Post-employmel/t Bel/efits Other thal/ Pel/siol/s. GASB Codification P20 and Codification P50 establish uniform standards for the measurement, recognition and display of pension and other post-employment benefits other than pensions (health care ) expenditures/expense and related liabilities, assets, note disclosure and applicable required supplementary information in ihe financial reports of state and local governmental employers . 67 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued Retirement Plans . All full-time employees and certain permanent part-time employees of the Borough participate in th e State of Alaska Public Employees' Retirement System (PERS). In addition to the pension plan the sys tem also administers a post-employment healthcare benefit plan. Summmy of Significant Accounting Poli cies. PERS financial statements are prepared using the accrual basis of accounting. Plan member contributions are recognized in the period in which the contributions are due . The Borough 's contributions are recognized when due and a fom13 I commitment to provide the contributions has been made. Benefits and refunds are recognized when · due and payable in accordance with the tenn s of the plan. All plan inve stments are reported at fair market value or estimated fair market value. Termination Costs. If the Borough decid es to terminate coverage for a department, group , or other class ification of members, even if that termination results from the deci s ion to divest of a particular govemmental function , all affected employees in that department, group or other classification of members become immediately vested in the plan. The Borough mu st pay to have a temlination study completed. The purpose of the stu dy is to calculate the Borough 's one-time termination costs . The costs represe nt the amount necessary to fully fund the costs of plan members who become vested through this proce ss and for other changes in actuarial as su mption s, s uch as, earlier than expected retirement, that arise from the act of termination of coverage. Borough must pay a lump sum within 60 days of termination or arrange a payment plan that is acceptable to the PERS Administrator. For fiscal year 20 I 4 the pa st service rate is 24. I 9%. Plan Oversight. The Borough contributes to the Alaska Public Employees Retirement System (PERS), which includes both a cost sharing multiple employer defined benefit pen s ion and post- employment healthcare plan and a defined contribution plan. Both plans are administered by the Commissioner of Administration and the Alaska Retirement Management Board (ARMB). Both PERS plans provides retirement benefits including disability and death benefits, and post-employment healthcare to plan members and beneficiaries. The authority to establish and amend benefit provisions is assigned to the ARMB. The Public Employee's Retirement System issues a publicly available financial report that includes financial statements and required supplementary information for PERS. This report may be obtained from the system at Pouch C, Juneau , Alaska 99811. Alaska Public Employee Retirement System (PERS) -Defined Benefit Plan Plan Description and Funding Agreement. Benefits vest with five years of credited service. Employees enrolled prior to July I, 1986 with five or more years of credited service are entitled to annual pension benefits beginning at normal retirement age 55 or early retirement age 50. For employees enrolled after June 30, 1986, but before July I , 2006 , the normal and early retirement ages are 60 and 55, respectively. Employees with 30 or more years of credited service may retire at any age and receive a normal benefit. Retirement benefits are calculated by multiplying the average monthly compensation (AMC) times credited PERS service times the percentage multiplier. The AMC is determined by averaging the salaries earned during the five highest (three highest for PolicelFire members or members hired prior to July I, 1996) consecutive payroll years. Members must eam at least 115 days of credit in the last year worked to include it in the AMC calculation. The PERS pays a minimum benefit of $25 per month for each year of service when the calculated benefit is less. 68 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued The percentage multipliers for policelfire per so nnel are 2% for the first ten years of service and 2.5% for all serv ic e over 10 years. The percentage multipliers for all other participants are 2% for the first ten years, 2.25% for the next ten years, and 2.5% for all remainin g se rvice earned on or after Jul y 1, 1986 . All service before that date is ca lculated at 2%. Post-employment hea lthcare benefits are provid ed without cost to all member s first enrolled before Jul y I, 1986. Members first enrolled after Jun e 30, 1986 and who have not reached age 60 ma y elect to pay for major medical benefits. Pension benefits are adjusted each year based upon increases in the Consumer Price Index (CPI) for the prior year. The increase in the benefits is 75% of the CP l increase up to a 9% maximum for recipients who are at least age 65 or on disability o r 50% of the in crease up to a 6% maximum for recipients who are at least age 60 but under age 65 or who have been receiving benefits for at least five years. Starting at age 65 , or at any age for those employed before July 1, 1986, a retired employee who remain s in Alaska is eligible for an additiona·1 allowance equal to 10% of the base benefit or $50 a month , whichever is greater. Post R etirement Pension Adjustments. Post retirement pension adjustments (PRPAs) are g ranted annually to eligible benefit recipients when the consumer price index (Cpr) increase s during the preceding calendar year. PRP As are calculated by multiplying the recipient's base benefit, including past PRP As , times: (a) 75% of the CPI increase in the preceding calendar year or 9%, whichever is le ss, if the recipient is at least 65 or on PERS di sab ility ; or (b) 50% of the CP l increase in the preceding calendar year or 6%, whichever is le ss, if the recipient is at least 60, or ha s been receiving benefits for at least five years. Ad hoc PRP As, up to a maximum of 4%, may be granted to eligible recipients who first entered the PERS before July 1, 1986, iftbe cpr increase s and the financial condition of the fund will permit an increase . In a year where an ad hoc PRPA is granted, eligible recipients will receive the higher of the two calculations. Funding Policy. The Borough PERS active members are required to contribute 6 .75% (3 .26% pension cost and 3.49% post-employment healthcare costs) of their annual covered salary and the Borough is required to contribute at an actuarial determined rate; the current rate is 35.68%. The legislature capped the employer rate at 22% (10.64% pension cost and 11.36% post-employment health care cost) with the State of Alaska contributing an on behalf payment for the difference between the actuarial . required contribution and the cap . On behalf payments by the State of Alaska for the Borough's employees are recognized as revenues and expenditures/expenses during the year. The contribution requirements of plan members and the Borough are established and may be amended by the ARMB. During the 25 1h legislation session, Senate Bill 125 passed, which established a June 30, 2008 salary floor under AS 39.35.255(aX2). The salary floor is the total base salaries paid by an employer to active . employees of the system as of the fiscal year ending June 30, 2008. The statute requires the Division of Retirement and Benefits (Division) to collect employer contributions at a minimum based on FY 2008 base salaries . 69 KODIAK ISLAND BOROUGH No te s to Basic Financial Statements, Co ntinued Annual Pension Cost and On-Behalf Payments. The Borough's annual pension cost for the y ears ended Jun e 30,20 14 ,20 13 , and 2012 were $515,789, $532,75 0 and $572,822, re s pectively , which was equal to th e Borough 's actual contribution s . For th e year end e d Jun e 30 , 2014 the State of Alaska co ntributed $463,3 33 o r 13.68% (7 .74 % pen s ion cos t and 5.94% post-e mploy ment health care co st) o n behalf of the Borough, which was recogni zed as revenu e a nd expenditures. Alaska Public Employee Retirement System (PERS) -Defined Contribution Plan Plan Desc ripti on and Funding Req uirements. Boroughs and Public Employers in th e State of Alaska hav e a defi ned co ntributi on retirem e nt plan for new hire s fir st enro ll ed on o r afte r Jul y I , 2006. Plan membe rs make manda tory contribution s of 8% of g ros s eligible compensation. State statute s require the empl oyer to contribute 5% of employees' eligible compensation . Additionally , employers ar e required to contribute 0.48 % to th e retiree medi ca l plan , 0.20% for occ upati o na l and death and disability benefits and 3% of employers average annu al emplo yee co mp ensat ion to the health reimbursement arra nge ment (HRA). The employer effective contribution rate is 22%. Plan members are 100% vested wi th their contributions. Members become vested in em pl oyer 's contributions as fo ll ows: 2 years of service -25 % 3 years of serv ice -50% 4 years of serv ice -75% 5 years of se rvi ce -100 % Plan prov is ion s and contribution requirements and amendments are established by th e Alaska Retirement Management Board (ARMB). Total contributions for the yea r ended June 30, 2014 are as follow s: Defin ed contribution Retiree medical plan Occupational death and di sabi lity benefits Health reimburse ment agreement (HRA) Defined benefit unfunded liability (DBUL) Employer $ 184 ,3 99 4,022 1,67 6 26,438 110 ,327 Actual contributions were equal to the annual requir ed contributions. Deferred Compellsalioll Plall Employee 67 ,039 The Kodiak Island Borough has two defen'ed compensation plan s created and amended in accordance with Internal Reve nue Code Section 457. The plan s are available to all regular Borough employees. The deferred compensation is not available to employees until ternlination , retirement , death , or unfore seea ble emergency. All am o unts deferred under these plan s are he ld in trusts that were esta blish ed for the exclusive benefit of plan participants . Amounts contributed to the plan s by participants durin g the year ended June 30 , 2014 , was $174 ,560. 70 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued The first plan is managed by the International Borough Managers Association Retirement Corporation. $73 ,675 was contributed to this plan during the year ended June 30, 2014 . The Borough believes that the plan does not meet the criteria for inclusion as a fiduciary fund. The second plan is managed by the MassMutual Financial Group. $100,885 was contributed to this plan during the year ended June 30, 2014. The Borough believes that the plan does 'not meet the criteria for inclusion as a fiduciary fund . (15) Contingencies (a) General The Borough , in the normal course of its activities, is involved in various claims and pending litigation. After consultation with legal counsel, management estimates that these matters will be resolved without material adverse effect on the Borough's future financial position or results of operations. (b) Grants Amounts received or receivable from grantor agencies are subject to audit and adjustment by tbe grantor agencies. Any disallowed claims, including amounts already collected , would become a liability of the General or other applicable funds. In management's opinion, disallowances , if any, will not be material. (16) Subsequent Events Management have evaluated subseq'uent events through December 31, 2014, the date which the financial statements were available for issue . (17) Construction Commitments The Borough has outstanding commitments for construction at year end of $46, 195,669. (18) Subsequent Accounting Pronouncements The Governmental Accounting Standards Board has passed several new accounting standards with upcoming implementation dates covering several topics as follows: • GASB 67 -Financial Reportingjor Pension Plans -an Amendment ojGASB Statements No. 10 and No . 62. Effective jor periods beginning after June 15,2014. • GASB 68 -Accounting and Reportingjor Pensions -an Amendment ojGASB Statement No. 27. Effective jor fiscal years beginning after June 15, 2014. • GASB 69 -Government Combinations and Disposals oj Government Operations. Effective jor fiscal years beginning after December 15, 2014. • GASB 70 -Accounting and Financial Reportingjor Nonexchange Financial Guarantees. Effective jor fiscal years beginning after June 15, 2014. 71 KODIAK ISLAND BOROUGH Notes to Basic Fin anc ia l Statements, Co ntinued • GASB 7 1 -Pension Transitionfor Co ntributions Made Su bsequent to the Measurement Date -An Amendment ofGASB Statement No. 68. Effective forjiscai years beginning after June 15, 2014. Statements 67 and 69-71 are not expected to have any material impa ct on the financia l statements of the District. GASB Statement No. 68's objective is to imp rove accounting and reporting for pension s. Thi s Statement establishes standards for mea s uring and recogni z ing liabil iti es, defen·ed o utfl ows of reso ur ces, deferred inflows of resource s, and expense/expenditures. This Statement establi shes method s and assumpt ions used to project benefit payments to thei r actuarial present value and attribute that pre se nt va lu e to the period s of employee serv ices. Note di sclo sures a nd required s uppl ementalY information are addressed in this Statement. This Statement is effective for fiscal years beginning after June 15 ,2014. 72 (This page was left blank intentionally) i J J J REQUIRED SUPPLEMENTARY INFORMATION , . KODIAK ISLAND BOROUGH Bud ge tary Comp ari so n Schedul e Gene ral Fund Yea r end ed June 30 , 20 14 (Wi th fin ancial infonn ation for the yea r ended Jun e 30, 20 13 ) 2014 Vari a nce with Final Budget - Budget Posith'c 2013 Original Final Actual (N egative) Aclual Rev enu es: Property tax es an d assess ments: Real $ 29,900 29,900 34,167 4,26 7 33,406 Per so nal 3,3 0 0 3,300 (3,300) Ba al 22 ,000 22,000 24,3 50 2,350 21 ,545 Air craft 5,5 00 5,500 2 1,400 15 ,900 4 ,900 Penal ty and intere st 200,000 200 ,000 128,058 (7 1,942) 201 ,420 Tot al prope rty tax es and asse ss ment s 260,700 260,700 207 ,975 (52 ,725) 261 ,271 Severance ta xes: Fi sh 1,750,000 1,750 ,000 1,715 ,496 (3 4,504 ) 1,654 ,149 Mining 10,000 10 ,000 32,3 09 22,309 9,4 32 Logg in g 100,000 100 ,000 96,014 (3,986) 111 ,119 Tot al sev eran ce ta xes 1,860 ,000 1,860 ,000 1,84 3,819 (16,181) 1,774 ,700 Inter gove rnm ent al: State sour ces: S tate re ve nue sh arin g 707,639 707 ,639 73 1,314 23,675 1,042,431 Fi sherie s bu sine ss tax 1,6 50,000 1,6 50,000 1,546,3 08 (10 3,692) 1,647,02 5 Fi sherie s res our ce landing tax 100,000 100,000 9 7,679 (2 ,321) 110,532 Co mmercia l pa sse nger vesse l tax 25 ,000 25,000 4,600 (2 0,400) 23,47 3 Telephon e and el ec tric ta x 26,000 26,000 15 ,792 (10 ,208) 27,075 O n-beh a lf PERS payment 250,000 425 ,790 46 3,333 37,54 3 329 ,10 5 Liquor li cense 220 220 T atal state so urce s 2,758,6 39 2,934,429 2,859,246 (75 ,18 3) 3,179 ,641 Fed eral source s: Payment s in lieu of taxe s 1,226 ,000 1,226,000 1,541 ,152 3 15 ,152 1,43 1,452 Fi sh and Wildlife revenu e sharin g 150 ,000 150 ,000 205 ,518 55 ,518 17 3,848 Sc hool s and Road s -Grant s to St ates 2,400 2,400 (2 ,400) 2,3 67 Total federal source s 1,3 78,400 \,3 78,400 1,746,670 368,270 1,607 ,667 Tot al int ergovernm ental re venue 4,1 37,0 39 4,3 12,829 4,605,916 293,087 4,787,308 Charge s for service s - Sal e of cop ies and ma ps 5,000 5,000 3,1 36 (1 ,864) 6,139 Licen ses, permit s and fee s: Building and trailer permit s 40,000 40,000 59 ,661 19 ,661 37,24 3 Subdi vision and zonin g fee s 18 ,500 18 ,500 16,18 3 (2 ,317) 24,540 Other permit s 8,000 8,000 6,869 (1,131) 4,693 Total licen ses, pennit s and fee s 66,500 66,500 82 ,71 3 16 ,213 66 ,476 Inve stment income 100,000 100,000 23,804 (76,196) 39,078 Oth er 14 ,000 14 ,000 11 ,192 (2 ,808) 15 ,030 Total revenu es 6 ,44 3,239 6,619,029 6,778,555 159 ,526 6,950,002 (continued) 73 KODIAK ISLAND BORO UG H Bud ge tary Compari so n Schedu le Ge neral Fund , co ntinu ed Year ende d June 30 , 20 14 \'Nith fin anc ial informa tion for the yea r ended June 30 , 20 13) 2014 Variance w ith Actua l Amounts F inal Budget - Budget Budgetary Basis Positive Original Filial (see Note A~ (Negative) Expenditures: Gene ral government: Gene ral and admini stration $ 249,100 249 ,100 180,937 68 ,163 Borough asse mbly 18 1,850 183 ,350 183 ,790 (440) Boro ugh mana ger 605 ,768 605 ,768 545 ,107 60,66 1 Borough clerk 563,365 568 ,485 525 ,436 43 ,049 Boro ugh att orn ey 14 9,000 149,000 136 ,859 12 ,14 1 Fi nance department 897 ,962 942 ,872 92 1,132 2 1,740 Mana gement infonn at ion sys tems 1,065 ,775 1,076 ,605 1,013,958 62,647 Assess in g departm ent 670,312 687 ,462 680,158 7,304 Enginee rin g/fac ili ties depa rtment 276,663 3 13,293 307,9 17 5,376 T olal general gove rnment 4,659,795 4,775,935 4,495,294 280,64 1 Public sa fety -animal contro l 85 ,000 85 ,000 72 ,941 12 ,059 Conununity and econom ic deve lop ment: Co mmun ity development department 747,2 18 806,868 666,289 140 ,579 Bu ildin g official 151 ,484 151,484 153 ,32 4 (1,840) Eco nomic de ve lopm ent 73,600 73,600 58,862 14,738 Total comm unity and econo mi c developmenl 972 ,302 1,031 ,952 878,475 153 ,477 Emergency pr epared ness 52 ,000 52,000 9,987 42 ,013 Health and sanitation department 3 16,000 3 16,000 326,700 (10,700) Ed uca tion, culture , and rec reat ion 90,000 90,000 95,625 (5 ,625) Par ks and recreation 45 ,0 00 19 5,000 37 ,795 157,205 Kodiak Co ll ege and cit y libraries 195 ,000 195,000 195 ,000 Total expenditure s 6,4 15,097 6,740,887 6,1 I 1,8 17 629,070 Excess of revenues over expe nditures 28 ,142 (12 1,858) 666,738 788 ,596 Other financing (us es): Proceed s from saJe of capila l assets 5,000 5 ,000 (5 ,000) Tran s fer s in Tran sfers o ut (4 83 ,500) (48 3,500) (483 ,500) Ne t othe r fman cin g so urces (uses) (478,500) (478,500) (483,500) (5,000) Chan ge in fund balance $ (450,358) (600,35 8) 183,238 783 ,596 Fund balan ce, at beginning of year 3,3 48,732 Fund balance , at end of th e year $ 3,53 1,970 Note A: This schedu le does not includ e ex penditure s of$26,276 and a be ginnin g fund (deficit) of ($1 ) 746) on a multi year community development proj ect. The se costs ar e acc umulated in th e Commu nit y Development Fund which is combined with th e Ge neraJ Fund for the Bas ic Financial Stateme nt s. Not e B: See acco mp anying notes to requi re d suppl ementary infonn at ion . 74 2013 Adual 467 ,36 1 168 ,967 386,191 546,655 146,24 1 887,515 878 ,694 605 ,500 314,693 4,401 ,8 17 28 ,000 721,760 126,941 73 ,730 922,43 1 18,342 290 ,800 84,273 2 1,100 192 ,000 5,958,763 99 1,23 9 9,564 29,335 (9 11 ,559) (872 ,660) 11 8,579 3,230,153 3,348,732 KODIAK ISLAND BOROUGH Budgetary Comparison Schedule Specia l Revenue Fund -Education Support Year e nd ed Ju ne 30, 2014 (With financ ial information for the year ended June 30, 2013) 2014 B ud ~et Original F inal Actual Revenues: Property taxes and assessments: Real $ 9,114 ,580 9,114,580 9,003,276 Personal 925,140 925 ,140 879,491 Intergovernmental M sta te source s Motor vchicl e tax 280,000 280,000 253,230 Total revenues 10,319,720 10,3 19,720 10 ,135,997 Expenditures: Primary and secondary education 10 ,649,720 10,649,720 10 ,650,220 Excess (deficiency) of reven ues ove r (under) expen ditur es (330,000) (330 ,000) (514,223) Other financ ing sou rces: Transfers in 330,000 330,000 330,000 Change in fund balance $ (184,223) Fu nd balance (deficit), at beginning of year 152 ,549 Fund balan ce (defic it), at end of year $ (3 1,674) See accompanyi ng not es to requ ired suppl eme ntary information. 75 Va ri a nce with Fi nal B ud get- Positive 2013 (Negative) Actual (111 ,304) 8,846,747 (45,649) 939,619 (26 ,770) 259,252 (183 ,723) 10 ,045,618 (500) 10 ,250,350 (184 ,223) (204,732) 428,550 (184 ,223) 223 ,8 18 (7 1,269) 152,549 KODIAK ISLAND BOROUGH Budgetary Co mpari son Schedule Special Revenue Fund -Faci liti es Year ended June 30, 2014 (With financial infomlation for the year ended Jun e 30, 2013) 2014 Budget Original Final Actual Revenue s - Investment income $ 1,000,000 1,000,000 655,470 Expenditures 200 ,000 200 ,000 Excess of reven ues over expenditures 800 ,000 800 ,000 655 ,470 Other fina ncin g so urces (u ses): Tran sfe rs out (800 ,000) (800,000) (522,365) Chan ge in fund ba lance $ 13 3,10 5 Fund balance , at beginnin g of year 39,415 ,839 Fund balan ce, at end of year $ 39,548,944 See accompany ing notes to required supplementary infonnation. 76 Variance with Fina l Budget - Positive 2013 (Negative) Actual (344,530) 546,829 200,00 0 (144 ,530) 546,829 277,635 (996 ,696) 133 ,105 (449 ,867) 39,865,706 39,415 ,839 KODIAK ISLAND BOROUGH No te s to Required Supplementary Inform ation -Budgetary Comp ari so n Sc hedul es June 30 , 2014 Th e Boro ugh follow s these procedures In establ ishin g th e budgeta ry data re fl ec ted In th e fund financial statem ents: • The Borough Manager must s ubmit to th e Borough Assembly by April 30 a prop osed operating bud get for the fi sca l yea r com men ci ng th e following July 1. The operating bud get includes propose d expen diture s and the mean s of financing them. • Public hearin gs are conducted by the Borough Asse mbl y to obtain c iti ze n comment s. • By Jun e 10 , th e bud get is lega ll y enacted throu gh pa ssage of an ordinance by Borough Assembly actio n. If the Bo rough A sse mbl y fail s to pa ss an ordinan ce, th e bud get submitted by the Borough Manager becomes the adopted bud get. • Amendments to the bud get can occ ur anyt im e durin g th e fi sca l year throu gh the Borough Assembly or ad mini strati ve act ion. Generall y, the fo ll owi ng actions are required at the leve l ofthe particular chan ge: A ll new appropriations are authorized by an a ppr op riati on ord inance that amends the annual budget ordinance. A resolution of the Borough Assembly is required to move (appropriate) amounts between departm e nt s and projects. The admini strati on is auth orized and directed by th e Borough Assembly to effect the nece ssary lin e ite m changes within the limits established by Items (\) and (2) above by proj ect or department to properly monitor, account, and report receipt s and expenditures. • Ex penditures may not le gally ex ceed appropriations at the following leve ls: Ca pital Projects Funds - project level, all other fund s -de partment leve l. • All fund s, except Capital Projects Fund s, are budgeted on an annual ba s is encompassing a fi sca l year. Budgets of Capital Projects Funds generally encompass the peri od from start-up to project completion, which is generall y greater than o ne year. • Appropriations lapse at year end to the extent that they have not been expended for all fund s, except Capital Projects Funds, which lap se at project completion. • Budgets adopted by the Borough As se mbly are in accordance with accounting principles generally accepted in the United States of America. • The Borough published a separate 2014 budget document. That document may be obtained from the Kodiak Island Borough, Finance Director, 7 10 Mill Bay Road , Kodiak , Alaska 99615. 77 (This page was left blank intentionally) . I ADDITIONAL SUPPLEMENTARY INFORMATION I ..I I , J , I J J . , . KODIAK ISLAND BOROUGH Budgetary Co mpari so n Schedule De bt Service Fund -Education and Health Year ended June 30, 2014 (With s ummari ze d fin anc ia l informatio n for the year e nd ed June 30, 2013) 20 14 Variance with Original Fin al Budget- and Final Positive Budget Actual (Negative) Revenues: Property taxes an d assess me nt s $ 2,045,300 2,043,895 (1,405) Intergovernmental: State so urces 2,7 41 ,74 4 3,347 ,517 605,773 Investm e nt income 15 ,200 3,182 (12 ,0 18) Total reve nu es 4,802,244 5,394,594 592,350 Expenditures: General government 5,744 6,045 (301) Debt service: Principal 3,645 ,950 3,645,950 Interest 2,098,499 2,107,198 (8 ,699) Debt iss uanc e 89,8 35 (89 ,835) Total expenditures 5,750,193 5,849,028 (98 ,835) Excess (deficiency) of revenues over (under) expenditures (947,949) (454,434) 493,515 Other financing sources: Transfers in 650,000 482,402 (167,598) Change in fund balance $ (297,949) 27 ,968 325 ,917 Fund balance (deficit), at beginning of year 637,743 Fund balance, at end of year $ 665 ,7 11 78 2013 Actual 1,744,9 06 2,267,279 2 ,22 1 4 ,014,406 5,471 2,966,441 1,2 44 ,233 20 ,809 4,236,95 4 (222,548) 1,057,858 835,310 (197,567) 637,743 (This page was left blank intentionally) • I NONMAJORGOVERNMENTALFUNDS Special Revenue See Special Revenue section of this report. Capital Projects See Capital Projects section of this report. , J J . , . J J . , . NONMAJOR SPECIAL REVENUE FUNDS The Fire Protection Area No .1 Fund accounts for the activities related to fire suppression and fire prevention services to the citizens of the service area. The Womens Bay Fire Department Fund accounts for the activit ie s related to fire suppression and fire prevent ion serv ices to the citizens of the serv ice area. The Kodiak Airport Fire District Fund acco unt s for the activities related to fire suppression and fire prevention services to the cit ize ns of the service area. The Monasbka Bay Road Service Area Fund accounts for the activities re lated to road services within tbe service area . The Service Area No.1 Fund accounts for the activities re lated to maintenance service to roads within the district, includin g snow removal, ditching and grad in g. The Womens Bay Road Service Area Fund accounts for the act ivities related to maintenance service to roads within the service area, including snow and ice removal , ditching and culvert work. . The Bay View Road Service Area Fund accounts for the activ ities related to road services within the serv ice area. The Service Area No.2 Fund accounts for the act iviti es re lated to water and sewer services in the service area . This fund is in the design stage at present. The Local Emergency Planning Committee (L.E.P.C.) Fund accounts for State of Alaska grants provided for regional emergency preparation, response, and mitigation planning. The Land Sales Fund acco unt s for the disposal of Borough-owned lands. The proceeds of land disposals are generally used for the management of Borough lands and the re pairs and maintenance of Borough schoo l buildings. The Buildings and Grou nds Fund accou nts for the operations and maintenance of certa in buildings and grounds owned by the Borough which are jointly shared w ith the City of Kodiak, the Kodiak Island Borough Schoo l District, and certa in nonprofit commun ity organizations. T he Woodland Acres Street Ligbt Service Area Fund accou nt s for activities related to the provision of street li ghting within the serv ice area. The Trinity Islands Street Light Service Area Fund accounts for act iviti es re lated to the provi sio n of street li ght ing within th e serv ice area. The Tourism Development Fund acco unts fo r the co ll ectio n of the Borough Transient Accommodation Tax (Bed Tax) and it s subsequen t transfer to the Kodiak Island Convention and Visitor Bureau. The Missio n Lake Tide Gate Fund accoun ts for activities related to maintaining the tide gate for the residents of the serv ice are a . The Fern Fuller Trust Fund accounts for the distribution of funds to the beneficiaries of the trust. The Trinity Islands Paving Fund acco unts for activ iti es related to th e provision of paving within the service area . The Oil Spill Disaster Fund accounts for act ivities related to the gro undin g orthe drilling vesse l Kullllk. KODIAK ISLAND BOROUGH C o mbinin g Bala nce Sheet Nonmajor Go vernmental Fu nds Ju ne 30 , 20 14 (W ith summa rized finan cial infonnation at June 30, 20 13) Specia l Capital Revenue Project Assets F un ds F unds Equity in ce ntra l treas ury $ 2,666 ,213 3,3 20 ,16 1 Rece ivab les: State of A las ka 6,778 15 ,367 Federal governme nt 153,995 Property taxes 17 ,776 Land sa les contract s, due w it hin one year 35,465 Other 29 ,898 7,6 19 Prepaid ite ms Land sale contracts , due after one year 5 13 ,765 Total $ 3 ,269,895 3 ,497,142 L iabilities, Deferred In fl ows of Resou rces, a nd F un d Ba la nces Liab ilities: Accounts payab le $ 97,305 149 ,672 Customer deposits 1,100 Due to other fund s 60 ,242 Advances fro m other fu nds Unearned revenue s 36 ,464 98 ,351 Total liabi li t ies 195 ,111 248,023 Deferred inflows of re so urces: Unavai lab le revenues 5 13,765 Total li ab ili t ies and deferred in fl ows of reso urces 708 ,876 248,023 Fun d balances: No ns pendable 513 ,765 Comm itted 2,140,474 Ass igne d 3,249,11 9 Unass igne d (93 ,220) To tal fu nd ba lances 2 ,56 1,0 19 3 ,249,119 Tota l $ 3,269,895 3,497,142 79 Tota ls 2014 20 13 5,986 ,374 6,044 ,853 22,145 97,5 14 153 ,995 18 ,329 17 ,776 16,662 35 ,465 3,649 37,517 34,483 3 16 51 3,765 5,465 6,767 ,037 6,221,271 246,977 487,417 1,100 1,250 60,242 1,872,8 18 25 ,077 134 ,815 125 ,844 443 ,134 2,5 12,406 5 13,765 5,465 956,899 2,5 L7,87 1 5 13,765 5,781 2 ,140 ,474 2,272,684 3,249,11 9 1,476,272 (93 ,220) (5 1,337) 5,8 10,138 3,703 ,4 0 0 6,767,0 37 6,22 1,27 1 (This page was left blank intentionally) KODIAK ISLAND BOROUGH Combi ni ng State ment of Rev enu es, Expenditu re s, and Changes in Fund Ba lance s No nmajor Gove rnment al Fu nds Yea r e nded June 30 , 20 14 (Wi th summ arized financial in fonnation for year ended Jun e 30 , 20 13) S pecial Ca pital Reven ue Project Tota ls Funds F unds 2014 2013 Revenues: Property taxes and as sess ment s $ 1,34 1,544 1,3 4 1,544 1,144,253 Tra nsie nt accommodat ions tax 75 ,142 75,14 2 96,640 I ntergove rnm enta l: State so urces 13,430 47,48 6 60,9 16 1,4 33,134 Federa l sources 187,002 187 ,002 5 1,705 Charges for services 586 ,300 586,3 00 556 ,060 License s, penn it s and fees 29,850 29,850 28 ,350 In vestment income 19 ,579 27,596 47,175 77,884 Oth e r 39 ,364 39,364 3 7,486 To tal revenues 2,105,209 262,084 2,367,293 3,425,5 12 Ex penditur es: C urrent: Ge ner al governme nt 857,4 17 857,41 7 899,9 11 Public sa fety 503,779 503,779 441 ,280 Com muni ty and eco nomi c deve lopm ent 84 ,126 84,126 84 ,910 Service dist rict maintenance 63 1,572 63 1,572 47 9,264 Capital outlay: School s 122,388 122 ,38 8 613 ,235 General 234,858 23 4 ,858 2,041 ,67 4 Debt service -int eres t 2,208 2,208 9,992 Tota l expenditur es 2,079,10 2 35 7,246 2,436,348 4 ,570 ,266 Excess (defi c iency) of reven ues over (und e r) exp enditure s 26 ,107 (95,16 2) (69,055 ) (1,144,75 4) Ot her financin g so urce s (uses): Land sa les pro cee ds 356,284 356,284 6,787 Tran sfer s in 18 ,000 18,000 435,947 Tra nsfers o ut (66,500) (66,5 00) (4,384 ,630) Net other financing sou rce s (uses) 307,784 307 ,784 (3 ,94 1,896) Change in fund ba lances 333 ,89 1 (95 ,1 62) 238,729 (5 ,086,65 0) Fund balan ces , at beginnin g of yea r 2,227,128 3,344,281 5,571,409 8,790,050 Fund ba lance s, at end o f year $ 2,56 1,01 9 3 ,249,11 9 5,810,138 3,703,400 80 KODIAK I SLAND BOROUG H Nonmajor Special Re ven ue Funds Combining Balance Sheet June 30. 2014 (W ith summarized financial info rmat ion at June 30, 20 13) Fir e a nd Road Service Areas F ire Road Fire "'omens Kodiak Monashka Protecti ol1 Bay Fire Airport Fire Bay Road Sen'ic e Assets Area No. I Dej?:artmcnt District Service Area Area No.1 Equity in ce ntra l treasur), $ 30 1,357 507.423 35,759 4,472 380,658 Receivables : Stale of A laska Property taxes 9.70 1 285 641 5,877 Land sal es contracts, due wi thin one year O th er Prepaid it em s Due from othe r fund s Land sa le cont racts, due after one year Total S 3 1 1,058 507,708 35 1759 5,113 386,535 LiJibi lities, Deferred InO ows of Reso urces, and Fund Balances (Deficits) Liabiliti es: Account s payable 19 ,439 764 1,574 37,947 C ustomer deposits 1,100 Due to othe r fund s Advance from other fund s Unearned reven ues Tota l liabiliti es 19,439 1,864 1,574 37,9 47 Deferred inflows of resou rces: Unavailable revenue s Total liabilities and deferr ed inflows of resources 19,439 1,864 1,574 37,947 Fund balances (de ficit s): Nonspe ndable Co m mitted 29 1,6 19 505 ,8 44 35 ,759 3,539 34 8 ,588 Unassigned Total fund balances (deficits) 29 1,6 19 505,844 35,759 3,539 348,588 Total $ 3 11 ,058 507,708 35,759 5,11 3 386,535 81 F ire and Road Sen-ice Areas State G rant Roa d Program Womens Bay Road Bay View Road Ser v ice Area Service Area Service Area No.2 L.E.P.C. La nd Sales 144 ,18 1 5,955 5,795 454 ,439 6 ,778 570 702 35,465 9,164 513,765 144 ,75 1 6,657 5,795 6 .778 1,012 ,833 5,385 227 1,687 24 ,599 36,464 5,385 227 ·24,599 38,151 513,765 5,385 227 24 ,5 99 551 ,916 513,765 139 ,366 6,430 5,795 (17 ,8 21) (52,848) 139,366 6,430 5,795 (17,82 11 460,917 144 ,75 1 6,657 5,795 6,778 1,0 12,833 (conti nued) 82 Miss ion L ake Fern Fuller Trinity Islands Oil S pill Totals Tid e Gate T rus t Pav in g Di saste r 2014 2013 37,417 264,85 6 13 ,092 2,666 ,2 13 2,646 ,895 6,778 4,2 59 17,776 15,6 12 35,465 3,649 29 ,898 26,863 316 513 ,765 5,465 37,4 17 26 4 ,856 13,092 3,269,895 2,703 ,059 97,3 05 380,927 1,100 1,250 25,077 10 ,566 60,24 2 58 ,563 25 ,077 36 ,464 4 ,649 2 5,077 10,566 195 ,111 470,466 513 ,765 5,465 25 ,077 10,566 708,876 475,931 513 ,76 5 5,78! 37,4 17 264 ,856 2,1 40,474 2,272,684 (11 ,9 85 ) (10,566) (93 ,220) (51,3371 37,4 17 264,856 (1 1,985) (10 ,5661 2,56 1,0 19 2,227,128 37,417 264,856 13 ,092 3,269,895 2,703,059 84 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Combining Statement of Revenues, Expenditures, and Chan ges in Fund Ba lances (Deficits) Year ended June 30, 20 14 (With summa ri zed financial infonnation fo r the yea r ended June 30, 2013) Rev en ues : Pro perty taxes and assessments Transient accommoda tions tax Int ergovernmental : State sources Charges for se rvi ces Licenses, pennits and fee s Inv estment income Other Tota l revenues Expe nd it ures : Current: General governm e nt Pu blic safety Comm unity and economic development Health and san itat ion de partment Service district maintenance Debt serv ice· interest T otal expenditures Excess (deficiency) of revenues over (under) expenditures Other fi nan cin g sources (uses): Land sa le proceeds Transfers in Tran sfers out Net other financ ing sources (uses) Chan ge in fu nd balances Fund bal ance s (defi cits), at beg in ning of year Fund balances (deficits), at end of yea r $ Fire Proteclion Area No. I 552 ,353 3,470 25 ,543 581,366 408 ,472 408 ,472 172 ,894 172 ,894 118 ,725 $ __ ..,;2;;;,9;.,;1,6;;,;1;;;,9_ 85 Fi re and Road Stn'ice Areas Fire WomtDs Ba y F ire Department 95,537 14 ,336 4,478 13,200 127,55 1 66,459 66,459 6 1,092 6 1,092 444 ,752 505,8 44 Kodiak Airport Fire Dislrict 13,602 362 13 ,964 14,359 14 ,359 (395) (395) 36,154 35,75 9 Road Monasbka Bay Road Service Area 6 1,032 14 5 6 1,177 55 ,293 55.293 5,884 5,884 (2 ,3 45) 3,53 9 Serv ice Area No. I 388,416 4,774 393,190 425,158 425,158 (31,968) (31,968) 380,556 348,588 Fire and Road Serv ice Areas Womens Bay Road Service Area 183 ,730 27,600 1,530 212,860 145,293 145,293 67,567 67,567 71,799 139,366 Road Ray View Road Service A rea 13 ,622 78 13,700 5,566 5,566 8,134 8,134 (1,704) 6,430 Service Area No.2 86 52 52 52 52 5,743 5,795 S tate Grant Program L.E,P ,C. 13 ,430 13 ,430 14 ,489 14 ,489 (1 ,059) (1 ,059) (16,762) (17,821 ) (continued) K O DIAK ISLAND BOR OUGH Nonmajor Special Revenue Fund s Combining Statement of Revenues , Expenditures. and Changes in Fund Balances (Deficits), (continued) Year eooed June 30 , 20 14 (With s ummar ized financial informat io n for the year ended June 30 , 20 13) Sa nel L ig htin g Dist ri cts Wo od la nd Ac r es Trinity Isla nd s Buildi ngs a nd S ired Light Stru t Lig ht La nd Sales Ground s Sen 'ic e Area Se n 'ic e A r ts Reve nu es: Property taxes and assessments $ 12,067 5,753 Tran sie nt accommodations tax Inter gov enunental : State sources Charges for services 34,765 537,199 Licen ses, pemlits and fees 2,250 Investment income (2 ,647) 2 ,937 208 200 Other 140 481 Total reven ues 34,508 540,6 17 12 ,275 5,953 Expenditure s · C urrent: General government 340,477 510,306 4 ,834 1,800 Pub li c safety Community and eco nomic deve lop ment Health a nd sanitation department Serv ice d istrict maintenance Debt serv ice· in terest Total expenditures 340.477 5 10,306 4,834 1,800 Excess (deficiency) of reven ues over (under) expen ditures P05,969) 30,311 7,441 4 ,153 Othe r financin g sources (uses): Land sales proceeds 356,284 Transfers in 18,000 Trans fe rs out Ne t other financin g sources (uses) 356,284 18 ,000 C hange in fund balances 50,3 15 48 ,311 7 ,441 4 ,153 Fund balances (deficits), at beginning o f year 410,602 274 ,970 14,750 17,95 4 Fund balances (defi c its), at end afyear S 460,9 17 323,28 1 22,19 1 22 ,107 87 Tourism Mission Lake Fern Fuller Trinity Islands Oil Spill Totals Development Tide Gate Trust Paving Disaster 2014 2013 5,448 9,984 1,341 ,544 1,057,55 1 75,142 75 ,142 96 ,640 13,430 62,026 586,300 556,060 29,850 28 ,350 1,150 333 2,293 21 6 19,579 16,090 39,364 37,486 76,292 5,78 1 2,293 10,200 2,105 ,209 I ,854,203 857,417 899,911 503,779 441 ,280 84,126 84 ,126 84 ,9 10 245 17 631 ,572 479,264 2,208 2,208 9,992 84,126 245 2,225 2,079,102 1,915,357 (7,834) 5,536 2,293 7,975 26,107 (61,154) 356,284 6,787 18 ,000 45,600 (66,500 ) (66,500) (123,435) (66,500) 307,784 (71,048) (7,834) 5,536 (64,207) 7,975 333 ,89 1 (132,202 ) 141 ,5 16 31,881 329,063 (1 9,960 ) (1 0,566) 2,227,12 8 2,35 9,330 133 ,682 37,417 264,856 (11,985) (10,566 ) 2,561,019 2,227,128 88 KODIAK ISLAND BOROUGH Nonm ajor Specia l R evenue Fund s Fire and Road Service Areas -Fire Pro tection Area No. I Sc hedule of Reven ues, Expenditures, a nd C ha nges in Fund Balance (De fi c it ) Budget a nd Actual Yea r end ed Jun e 30, 20 14 (W ith financial infonnation for the year ended Jun e 30, 2013 ) Revenues: Property taxes and as sessments Intergovernm e ntal - State sources -PERS o n behalf payment In vestme nt in co me Other Total revenues Expenditures: Public safety : Personne l Vo lunteers Fringe b enefi ts Professional services S upport goods and serv ices Capital outlay Debt se rv ice - Int ere st Total expenditures Excess of revenues over expend iture s Fund ba lance (deficit), at beginning or year Fund balance, at end of year Fi n al Budget $ 533 ,000 5 ,900 1,440 8,700 549,040 99,440 20 ,000 54 ,750 1,000 223 ,850 150 ,000 549,040 $==== 8 9 2014 Actua l 552,353 3,4 70 25 ,543 581 ,3 66 108 ,982 13 ,545 71 ,69 1 75 173 ,665 40,514 408 ,472 172 ,894 118 ,725 $ =~2~9;;;1 ,6;;;,1~9 = Variance w ith Final Budget Positive (Negative) 19,353 (5 ,900) 2,0 30 16 ,843 3 2,326 (9 ,542) 6,455 (16 ,941) 925 50,185 109 ,486 140,568 172 ,894 2013 Actual 53 1,840 13 ,101 (476) 23,838 568 ,303 94 ,832 17,3 10 60 ,507 158,45 7 6,943 6,750 344,799 223 ,504 (104 ,779) 118 ,725 KODIAK ISLAND BOROUGH No nm ajo r Spec ial Revenu e Fu nds Fire and Road Service A reas -Wom ens Bay Fi re Departm ~nt Sch edul e of Reven ues, Ex pend itu re s, an d Change s in Fund Balance Budget and Ac tual Year end ed Jun e 30, 20 14 (With finan c ial info rm at ion fo r the yea r ended Jun e 30, 2013 ) 2014 Variance with final Budget Final Positive BudGet Actual (Negati".) Revenues: Property taxes and assessments $ 92 ,000 95 ,537 3,537 Charges for se rvices 13,000 14 ,336 1,33 6 I nvestm ent in come 2,000 4 ,478 2,478 Oth e r 12 ,000 13,2 00 1,200 Total revenu es 11 9 ,000 127,55 1 8,55 1 Ex penditure s: Publi c safety: Per sonnel services 1,000 1,000 Fringe bene fit s 500 500 Support goo ds and se rvice s 94 ,500 38 ,806 55 ,694 Cap ital outla y 23 ,000 27 ,653 (4 ,653) Total ex penditur es 11 9,000 66,459 52 ,54 1 Excess of revenu es over ex penditures $ 6 1,092 6 1,092 Fund bala nce. at be ginnin g o f ye ar 444,75 2 Fun d ba lance , at end of year $ 505 ,844 90 2013 Actual 94 ,27 1 13 ,849 2,522 13,2 00 123,842 48 ,939 24 ,820 73 ,759 50,083 394 ,669 444,75 2 Revenues: Property taxes and 3SSCssments lnvestment income Total revenues Expenditures: Public safety: Support goods and services KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Fire and Road Service Areas -Kodiak Airport Fire District Schedule of Revenues , Expenditure s. and Changes in Fund Balance Budget and Actual Year ended June 30, 2014 (With financial information for the year ended June 30, 2013) 2014 Final BudGet Actual $ 13,800 13,602 500 362 14,300 13,964 14,300 14,359 Excess (deficiency) of revenues over (under) expenditures $ (395) Fund balance, at beginning of year 36,154 Fund balance, at end of year S 35,759 91 Variance with Final Budge( Positive (Negative) (198) (138) (336) (59) (395) 2013 Actual 13,743 279 14,022 13,883 139 36,015 36,154 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Fire and Road Service Areas -Monashka Bay Road Service Area Schedule of Revenues. Expenditures, and Changes in Fund Balance (Deficit) Budget and Actual Year ended June 30, 2014 (With financial infonnation for the year ended June 30, 2013) 2014 Variance with Final Budget Final Positive Budget Actual (Negative! Revenues: Property taxes and assessments $ 60,850 61,032 182 Investment income 145 145 Total revenues 60,850 61,177 327 Expenditures: Service district maintenance: Persormel services 500 1,091 (591) Fringe benefits 589 (589) Support goods and services 4,350 443 3,907 Snow removaVsanding 26,000 9,713 16,287 Road grading/ditching 5,000 n,l3l (6,l3l) Repairs and maintenance 25,000 32,326 (7,326) Total expenditures 60,850 55,293 5,557 Excess (deficiency) ofrevenues over (under) expenditures $ 5,884 5,884 Fund balance (deficit), at beginning of year ~2,345) Fund balance (deficit), at end of year $ 3,539 92 2013 Actual 59,904 481 60,385 249 204 2,237 41,964 42,856 87,510 (27,125) 24,780 (2,345) KODIAK ISLAND BOROUGH Nonmaj or Special Revenu e Fund s Fire and Road Service Areas -Service Area No. I Schedule of Revenue s, Expenditures, and Changes in Fund Bal an ce Budget and Actual Year ended Jun e 30, 2014 (With finan cial inform ation for the year ended June 30, 2013) 2014 Final Budget Actual Revenues: Property taxes and asse ss ment s $ 490,500 388 ,416 Investment income 4,774 Total rev enues 490,500 393,190 Expenditures: Servi ce district maintenanc e: Personnel servi ces 8,800 6,038 Fringe benefits 2,900 1,464 Support goods and servi ces 2,\00 \,732 Snow removal /sandin g 200 ,000 73 ,000 Road grading/ditching 10\,700 35 ,358 Repairs and maintenance 575 ,000 307,566 Total expenditures 890,500 425,158 Excess (deficiency) of revenues over (under) expenditures $ (400,000) (31 ,968 ) Fund balance, at beginning of year 380 ,556 Fund balance, at end of year $ 348,588 93 Variance with Final Budget Positive 2013 (Negative! Actual (102,084) 123,944 4,774 4,035 (97,3\0) 127,979 2,762 7,939 1,436 3,404 368 4,\95 \27,000 98,548 66,342 49,689 267 ,434 7.1,\89 465,342 234,964 368,032 (106 ,985) 487,541 380,556 KODIAK ISLAND BOROUG H No nm ajo r S pecia l Revenue Fund s fire a nd Road Servi ce Areas -Womens Bay Road Se rvice A rea Schedu le of Revenues, Expend itures, and Changes in Fund B alance (De ficit) Bud get and Actual Year e nd ed Ju ne 30, 2014 (With financial informat ion for th e year en ded J une 30, 2013) 201 4 Variance with Fin al Budget Fina l Positive B u dget Actu a l (Negative) Revenue s: Property taxes and assessments $ 180,000 183,730 3,730 Licen ses, pennits and fe es 25 ,000 27,600 2 ,600 In vestment in come 1,000 1,530 530 Total revenues 206,000 2 12 ,860 6 ,860 Expend itu res: Se rvice di stri ct ma inten ance: Personn e l services 1,200 6 1,194 Fringe benefits 800 2 798 Support goods and se rvices 3 1,000 337 30,663 Snow removal/s anding 60,000 48,925 11,075 Road grad ing/ditching 33,000 44 ,270 (11 ,270) Repa irs a nd main tenance 80,000 5 1,753 28 ,247 Total ex penditures 206,000 145 ,29 3 60,707 Excess of re ven ues over expenditures 67,567' 67,567 Oth er financing sources: Trans fers in - Land Sales Special Re ve nue Fund Change in fund balance $ 67,5 67 67,567 Fund balance (deficit), at begin n ing of year 7 1,799 Fund ba lance, at end of year $ 139,366 94 2013 Actua l 181 ,203 27,600 81 208,884 94 29 507 86,972 37,647 25 ,290 150,539 58,345 27,600 85 ,945 (14,146) 7 1,799 Rev enu es: Prope rty taxes and asses sme nts In ves tm ent in co me Total revenu es Expe ndi tu res: Servi ce dis tri ct main tenan ce: Perso nn el serv ices Frin ge bene fit s Pro fess ion al se rvi ces S up po rt goods and serv ices Snow rem ova l/sandin g Road gr ad ing/ditchi ng Repairs an d maintenance Total ex pen ditu res KODIAK ISLAND BORO UGH Nonmajor Spec ial Reve nue Fund s Fi re and Road Serv ice Areas -Bay V iew Road Serv ice A rea Sched ul e of Rev enu es, Ex pendit ures , and Changes in Fu nd (Deficit) Budge t and Ac tu al Y ea r ended Jun e 30, 20 14 (With fi nancial infonn at ion for the year ended Jun e 30, 201 3) 2014 Final Budget Actual $ 15,257 13,622 78 15 ,257 13,700 187 16 1 7,257 252 5,400 4 ,966 1,100 1,500 15,2 57 5,5 66 Excess of reve nues ove r ex pend itu res $ 8,134 Fund balanc e (d efici t), at beginning of ye ar (1,704) Fund ba lance (d efi cit ), at e nd o f year $ 6,4 30 95 Variance with Final Budget Positive 2013 (Nega th'c) Actual (1 ,63 5) 15,17 1 78 13 (1,557) 15 ,184 (187) (16 I ) 7,257 (252) 6 9 434 6,12 5 1,100 1,5 00 9,69 1 6 ,194 8,134 8 ,99 0 (10,694) (1,704) Revenue s: Investmen t incom e Expend itu res : Serv ice di stri ct ma intena nce - S uppo rt services K OD IA K ISL A ND BORO UG H Nonmajor Special Re ven ue Fund s Fire and Road Se rvice A reas -Serv ice Area No.2 Schedu le of Revenue s, Ex pend itures, and Ch an ges in Fun d Balance Bu dge t and Ac tua l Y ca r end ed June 30, 20 14 (\"li th fina nc ial infonnat ion for the yea r e nd ed Ju ne 30 , 20 13 ) Final Budget $ __ ----'1"'0"-0 _ 100 2014 Actual 52 Varian ce with Final Bud get Positive (Negative) (48) 100 Excess of reven ues ove r expenditures $ 52 52 Fun d ba lan ce, at beginning of year Fund ba lan ce , at end of year === 96 5,743 5,795 $ ==,,;;;,;,~ 2013 A ctual 37 37 5,706 5,743 KODIAK ISLAND BOROUGH N onmajor Special Reven ue Fu nd s L.E .P.C. Schedule of Revenue s , Expenditure s, and Changes in Fund (De ficit) Bud get and Actu al Yea r end ed June 30, 20 14 (With financial infonnatio n for th e year ended Jun e 30, 20 13) 2014 Variance wi t h Final Budget Final Positive B ud ge t Actual (Negative) Revenue s : Intergovern mental : State so urc~s -grant s $ 57,120 13,430 (43,690) Expen ditur es: Pub li c safe ty: Personne l service s 36,020 9 ,465 26 ,555 Fr in ge ben efit s 21,100 4 ,609 16 ,491 Supp ort good s and services 4 15 (415) Total expe nditure s 57 ,120 14,489 42 ,63 1 Exce ss (deficiency) o f revenues over (under) expenditure s $ (1 ,059) (1 ,059) Fund (deficit), at beginning of year (16 ,762) Fund (d eficit), at end of yea r $ (17,821) 97 2013 Actual 15,589 10 ,002 4,8 14 773 15,589 (16 ,762) (16,762) KODIAK ISLAND BOROUGH Nonmajo r Special Revenue Fund s Land Sales Schedule of Revenue s, Expendit ur es , and Changes in Fund Balance Budget and Actual Year ended Jun e 30 , 2014 (With financial information for the year ended Jun e 30 , 2013) 2014 Variance with Fi nal Budget Final Pos itive Bud get Actual (Nega ti ve) Re venues: Intergovernmental: Sta te sources -PERS on behalf payment $ Charges for se rvic es 50 ,000 34,765 (15 ,235) Li censes, penn it s and fees 1,000 2,250 1,250 In vestme nt in come 20,000 (2,6 47 ) (22,647) Other 200 14 0 (6 0) Total revenues 7 1,2 00 34 ,508 (36,692) Expenditu res: General government: Person nel services 168 ,470 170 ,86 1 (2 ,391) Fringe benefit s 87,210 87,350 (140) Prore ss ional serv ices 25,000 27 ,837 (2 ,837) Suppo rt goods and serv ice s 881 ,750 54,429 827 ,32 1 Total expenditu res 1,162,430 340,477 82 1,953 Excess (deficiency) of revenues ove r (under) expenditure s (1,091 ,230) (305 ,969) 785 ,26 1 Other financ ing sources: Land sa le proc eeds 902 ,000 356,284 (545,7 16) Transfe r out -Women s Bay Road Service Area Special Re ve nu e Fund Net other finan c in g so urce s (uses) 902 ,000 356,284 (545,7 16) Change in fund ba lance $ (189,230) 50,315 239,545 Fund balance, at begin nin g of yea r 410,602 Fund ba lance, at end of yea r $ 460,9 17 98 2013 Actual 13,439 9,684 750 4 ,988 446 29,3 07 162,960 82 ,359 108,11 8 353,437 (324,130) 6,787 (27,600) (20,813) (344,943) 755,545 410,602 KODIAK ISLAND BOROUGH NOllmajor Spe cial Revenue Fund s Buildings and Grounds Schedule of Re ve nu es, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2014 (With finan cial information for the year ended June 3D, 2013) 2014 Fina l Budget Actual Revenues: Intergovernmenta l: State so urce s · PERS on behalf payment $ Charge s for services 569,908 537,199 Inv estment income 1,000 2,937 Other 481 Total revenues 570,908 540,6 17 Expenditures: General govern ment: Schoo l building s 35,000 24 ,655 Chiniak Schoo l 2 5,000 1,875 Borough building 495 ,908 4 79,011 Mental health center 5,000 3,538 Var ious borough buildin gs 13,000 1,22 7 Project office 15 ,000 Total expenditures 588,908 510,3 06 Excess (defic iency) of revenues over (unde r) ex penditure s (18 ,000) 30,311 Other financing sources: Tran sfer s in ~ Faci lit ies Special Revenue Fund 18 ,000 18,000 Change in fund balanc e $ 48 ,3 11 Fund balance , at begi nnin g or year 274,970 Fund balanc e, at end of year $ 323,28 1 99 Variance with Final Budget Positive 2013 (NeGative) Actual 19,897 (32,709) 532,527 1,937 (214) 481 2 (30,291) 552 ,2 12 10,345 44 ,297 23,125 897 16,897 46 3,36 2 1,462 3,074 11 ,773 16,88 1 15,000 554 78,602 529 ,065 48 ,311 23 ,14 7 18,000 48,311 41,147 233,823 274,970 KODIAK ISLAND BOROUGH Npnmajor Special Reven ue Funds Woodland Acres Street Light Serv ic e Area Sch edule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2014 (With financial information for the year ended Jun e 30, 2013) 2014 Variance with Final Budget Final Positive Budget Actual (Ne~ative) Revenues: Property taxes and assessments $ 11 ,650 12 ,067 417 In vestment in come 200 208 8 Total revenues 11 ,850 12 ,275 425 Expenditures: General governme nt: Support goods and services 11 ,850 4,834 7,0 16 Excess of revenues over expenditures $ 7,441 7,441 Fund balance, at beginning of year 14 ,750 Fund balance, at end of year $ 22,191 100 2013 Actual 11 ,550 66 11 ,616 5 ,008 6,608 8,142 14 ,750 KODIAK ISLAND BOROUGH Nonmaj or Special Revenue Funds Trinity Is lands Street Light Service Area Schedule of Revenues , Ex penditure s, and Change s in Fund Ba lance Budget and Actual Year ended Jun e 30, 2014 (W ith financial infonnation for the year e nded June 30, 20 13) 2014 Variance with F i nal Budget Final Positive Bud~et Actual (Negative) Revenues: Property taxes and assessments $ 5,500 5,753 253 Inve stment incom e 100 200 100 Total revenues 5,600 5,953 353 Expen diture s: General government: Support good s and services 5,600 1,800 3,800 Excess o f revenues over expenditures $ 4,153 4,153 Fund balance , at be ginnin g of year 17 ,954 Fund balance , at end o f year $ 22 ,107 101 2013 Actual 5,213 98 5,311 1,835 3,476 14 ,478 17,954 KODIAK ISLAND BOROUGH Nonmajor Spec ial Revenue Fund s Tourism Development Sch edule of Re venu es , Expenditur es, and Chan ge s in Fund Bal anc e Budg e t and Actua l Year e nd e d Jun e 3 0, 2014 (With financia l infonn ation for the ye ar end ed Jun e 30 , 2013 ) 2014 Variance with Final Budget Final Positive Budget Actual (Negative) Rev en ues : Trans ient accommodation s tax $ 115 ,000 75,142 (39 ,858) In vestment incom e 500 1,150 650 Tot al reve nu es 115 ,500 76,292 (39 ,208) Expenditures : Communi ty and economic developm e nt: Contributions 10 3,126 84 ,126 19 ,000 Supp o rt good s and servi ces 12,374 12 ,374 Total exp enditure s 115 ,500 84 ,126 31,374 Excess (d e ficienc y) of revenu es ov er (und er) expenditure s $ (7 ,834) (7 ,834) Fund balance, at beginning of year 141 ,516 Fund balanc e, at end of year $ 13 3,682 102 2013 Actual 96,640 818 97 ,458 84 ,910 84,910 12 ,548 128 ,968 141,516 K O DIAK ISLAN D BO RO UGH No nm ajo r Speci al Reve nu e Fun ds M iss ion Lake Tid e G ate Sc hedul e of Reve nu es, Ex penditu res, and Changes in Fund Ba lan ce Budget a nd Actu a l Vear e nde d Jun e 30, 20 14 (With fin anc ial informati on fo r th e year end ed J une 30, 20 13) 2014 V a ri a nc e w ith F in a l Budget Final Pos itive Budget Actual (N egat ive) Reven ues: Pro pe rty taxes and assess ments $ 3,740 5,44 8 1,70 8 In ves tm ent inco me 230 333 103 To tal reve nues 3 ,970 5,78 1 1,8 11 Ex penditures: Servi ce distri ct main te nance: Perso nne l se rvic es 188 (188) Fr inge benefit s 50 (50) Co ntr ac ted services 2 ,000 2,000 Supp ort goo ds an d service s 1,970 7 1,963 To tal expen di tu re s 3,970 24 5 3,725 Excess of reve nue s o ver ex penditur es $ 5,536 5,536 Fund balan ce, at beginnin g of year 3 1,88 1 Fund ba lance , at end o f year $ 37,41 7 10 3 2013 Actual 5,11 7 172 5,289 9 9 5,280 26 ,6 01 3 1,88 1 KODIAK ISLAND BOROUGH N Ollmajor Special Reve nue Fund s Fern Fulle r Tru st Schedule of Reve nu es , Expend iture s, and Changes in Fund Ba lance Budget and Actual Year ended June 30, 20 14 (With fina n cia l informat ion for the year ended June 30, 2013) 2014 Variance wit h F in .1 Bu d get Final Positive Budget Actu.1 (Neg.tive) Revenue s: Inve stment income $ 3,500 2,29 3 (1 ,207) Expe nditures: Genera l governme nt: Ex ce ss of revenue s over expenditure s 3 ,500 2,29 3 (1,207) Other financ ing (u ses): Tran s fers out- Ho spital Facilities Enterpri se Fund (66 ,500) (66 ,500) Change in fund ba lance s $ (63 ,000) (64 ,207) (1 ,207) Fund balance , at beg inning of year 329 ,063 Fund ba lance, at end of year $ 264,856 104 20 13 Ac tu al 2,762 2,762 (66,500) (63 ,738) 392,801 329,063 KODIAK ISLAND BOROUGH Non major Special Revenue Fund s Trinity Is lands Paving Schedule of Revenues, Ex pen ditures, and Changes in Fund (Deficit) Budget and Actual Year ended Jun e 3 0, 2014 (With financial info nnatio n for the year en ded June 30, 2013) 2014 Variance with Final Budget Final Positive Budget Actual (Negative) Revenues: Prop erty taxes and assessments $ 10 ,0 00 9,984 (16) Invest ment in co me 500 216 (284) Total revenu es 10 ,5 00 10 ,200 (30 0) Ex penditure s: Service di st rict maintenance - Support goods and serv ices 8,2 90 17 8,273 Debt service - Intere st 2,2 10 2,208 2 Total expenditures 10 ,5 00 2,2 25 8,275 Excess of revenues over expenditure s $ 7,975 7,975 Fund (deficit), at beginnin g of year (19,960) Fund (deficit), at end of year $ (11 ,9 85) 105 2013 Actual 15 ,595 428 16,023 48 3,242 3,290 12 ,733 (32 ,693) (19,96 0) KODIAK ISLAND BOROUGH No nmaj o r Special Revenue Fund s Oil Spill Di sas ter Schedu le of Re ve nue s, Expenditures, and Changes in Fund Balance (Deficit) Budget and Actual Year ended June 30, 2014 (W ith finan cial information for th e yea r ended June 30, 2013) Revenue s Expenditures; General government: Personnel services Fringe benefit s Support goods and se rv ices Tota l expe nd itur es Excess (deficiency) of revenues over (under) expenditure s Fund (deficit), at beginn ing of year Fund (deficit), at end of year 2014 Final Budget Actual $ $ (10 ,566) $ (10 ,566 ) 106 Variance with F inal Budget Pos itive (Negative) 2013 Actual 6,036 3,644 886 10,566 (10,566) (10,566) (This page was left blank intentiona ll y) . , I ~ ) I ..J J , . NONMAJOR CAPITAL PROJECT FUNDS The Borough Capital Projects Fund accounts for capital improvement projects related to various fmancing sources. The School Bond Capital Projects Fund accounts for educational related capital projects funded by general obligation bonds which will be paid for with property taxes and State of Alaska grants. The State Capital Grants Fund accounts for capital improvement projects relating to grants received from the State of Alaska. The Other Capital Projects Fund accounts for capital improvement projects related to var ious financing sources. Assets Equity in central treasury $ Receivable s : State of Alaska Federal governm ent Property tax es Account s and ot her rece ivab le s, net Total $ L iabilities and Fund Balances Liabilities: Acco un ts payable Due to other funds Unearned revenues Total liabilities Fund balances - Assigned Total $ KODIAK ISLAND BOROUGH Nonmajor Capital Project Funds Combin in g Ba lance Sheet June 30 , 2014 (With su mmari ze d financial inform at io n at June 30, 2013) Borough Sc hool Bond State Oth er Capital Capita l Capital Capital Projects Projects Grant s Proiects 530 ,827 186 ,749 319 ,130 2,28 3,455 8,302 7 ,065 152 ,900 1,095 4,466 3,153 535,293 186 ,749 483,485 2,291 ,615 4,800 104 ,931 38 ,3 03 1,638 8,962 89 ,389 4,800 104 ,93 1 47 ,265 9 1,027 530 ,493 81 ,818 436 ,220 2,200,588 535 ,293 18 6 ,749 483 ,485 2,29 1,615 107 Totals 2014 2013 3,320,16 1 3,397 ,958 15,367 93 ,255 153,99 5 18,329 1,050 7,6 19 7 ,620 3,497 ,14 2 3 ,5 18 ,212 149 ,672 106 ,490 1,814 ,255 98,35 1 121 ,195 248,023 2 ,041 ,940 3 ,249 ,11 9 1,476 ,2 72 3,497 ,14 2 3 ,5 18 ,2 12 Revenues: Property taxe s and assessments Intergove rnmental: State sources Federal sources In ves tment income Total revenues Expenditures: Capital outlay: Schoo ls General Total expenditu res Excess (deficiency) of re ve nue s over (u nder ) expenditures Other financin g sources: Transfers in Tran sfer s Qut Net other financing so urce s (uses) Change in fund balance s Fund ba lances , at beginning of year Fund balance s, at end of year KODIAK ISLAND BOROUGH Nonmajor Capital Proje ct Fund s Combining Statement of Revenu es, Ex penditures, and Changes in Fund Balances Year ended June 30, 2014 (With summari zed financ ial information for the year ended J une 30 , 20 13) Borough School Bond State Other Capital Cap it al Cap ital Capita l Projects Projects Grants Proj ects $ 19 ,177 28 ,3 09 152 ,900 34,102 4,7 08 66 3,652 19,170 4,708 66 175,729 81 ,581 122 ,388 174,137 60 ,721 122,388 174,137 60 ,721 4,708 (122,322) 1,592 20,860 4 ,708 (122 ,322) 1,592 20,860 525,785 204,140 . 434,628 2.179 ,728 $ 530,493 81,818 436 ,220 2,200,588 108 Tota ls 2014 2013 86 ,702 47 ,486 1,371 ,108 187 ,002 51 ,705 27 ,596 6 1,794 262 ,0 84 1,571,309 122 ,388 613 ,235 234,858 2,041,674 357 ,246 2,654 ,909 (95 ,162) (1,083 ,6 00) 390 ,347 (4,26 1,195) (3,8 70,848) (95 ,162) (4,954 ,448) 3,344,281 6,430 ,720 3,249 ,119 1,476 ,272 J I J J J J . , ENTERPRISE FUNDS The Muuicipal Solid Waste Collection and Disposal Fund accounts for the collection and disposal of solid waste and recycling services for the Kodiak Island Borough. The Hospital Facilities Fund accounts for rents on the Borough-owned hospital, hospital related state revenue sharing , and other hospital related revenue . In turn , it purchases hospital equipment and makes debt service payments on hospital related debt. The Kodiak Fisheries Research Center Fund accounts for rents and expenses on the Borough-owned Kodiak Fisheries Research Center. The three tenants: NOAA , Alaska Department of Fish & Game and Univers ity of Alaska, Fairbanks pay lease funds to participate in this multi-agency res earch faci lit y committed to the preservation of the North Pacific marine ecosystem and resources. The 911 Service Fund accounts for funds collected from phone charges and pays for a 911 emergency system. KODIAK ISLAND BOROUGH Enterprise Fund s M uni c ipa l So lid Waste Co ll ecti o n and Disposal Sc hed ule of Revenues, Ex penses , and Changes in Ne t Positi on B ud get an d Actual Year ended Jun e 30 , 20 14 (W ith finan cia l inform ati on for the year end ed June 3 0, 20 13) 2014 Variance with F inal Budget Final Positive 2013 Budget Actual ~egative} Actua l Operating re ven ue s: Solid waste disposa l $ 2,536,085 2,265 ,967 (27 0,118) 2 ,504 ,035 Other 39,403 39,403 11 ,7 08 Tot al operating re ve nue s 2,53 6,08 5 2 ,305 ,370 (23 0,71 5) 2,5 15,74 3 Operating expen ses: Per so nn e l se rvi ces 995 ,829 87 6,354 119,4 75 936 ,508 Con trac ted serv ice s 46 ,000 185,284 (1 39 ,284) 352 ,132 Maintenance and repa ir s 72 ,500 141,309 (6 8,80 9) 38,882 Landfil l clo sure and po stcl osure costs 300 ,000 3 00 ,000 Depreciation 306 ,12 0 278,342 27 ,778 293 ,913 General and admini strat ion 287 ,600 206,793 80 ,807 30 1,707 Recycling services 28 0 ,000 214 ,876 65 ,124 2 12,243 Co nt ribution s 48 ,500 39,106 9,394 37,011 Tota l operating expenses 2,336,549 1,942,064 3 94,485 2,172,3 96 Operating income 199 ,536 363 ,306 16 3,770 343,34 7 Other income (expense): Intergove rnm ental : State sources -grant s 5,323,038 5,323,038 5,2 05 ,962 State of Alaska on -b ehalf payment 60,967 Inv es tment income 100 ,000 67,094 (32,906) 63,542 Bond premium amort iza tion 27 ,211 27,2 11 27,211 Bond iss uanc e costs (25 ,285) Landfill closure and po st clos ure costs 377,471 377,471 Intere st expen se (25,000) (138 ,8 00) (113,800) (144 ,3 25) Total other in co me (expense) 75,000 5,656,0 14 5,58 1,014 5,188,072 In co me befo re tran sfer s 274 ,536 6,01 9,32 0 5,744,784 5,531 ,4 19 Transfers in 13,500 13,500 13,5 00 Change in net pos it io n $ 288,036 6,032,820 5,744,784 5,544,9 19 Net po s ition , at beginnin g of year 10 ,81 3 ,768 5,268 ,849 Net pos iti o n, at end of year $ 16,846 ,588 10 ,81 3 ,768 109 KODIAK ISLAND BOROUGH Enterpr ise Fund s Hos pital Facilitie s Sc hedu le of Reven ues , Ex pe nses, and Change s in Net Posit ion Budget and Actua l Year ended June 30, 2014 (With financ ial information for the year ended June 30, 2013) Operating revenue s: Lease income Other Tota l operating revenue Operat ing expenses: Per so nnel service s Maintenance and repair s Miscellaneous Depreciatio n Total operating expenses Operating in co me (lo ss) Other income (expen se): Intergovernmental: State sources ~ grants Federal sources -grants Inve stment income Bond premium amorti za tion Bond issue costs Contribution to Providence Hospita l Intere st expense Total other income (expense) [ncome (loss) before transfers Transfers in Change in net posit ion Net position , at beginning of year Net po sition, at end of year Final Bud~et $ 720,000 720,000 10 ,000 885,000 895,000 (175 ,000) 20,000 (108,000) (37,470) (125,470) (300,470) 66,500 $ (233,970) JlO 2014 Actual 1,150,000 1,150 ,000 10 ,100 5,791 867,913 883 ,804 266,196 215 ,000 73,207 113 ,82 1 (108,000) (748,721) (454 ,693) (188,497) 66,500 (121 ,997) 21,385,710 $ 21,263,713 Variance with Final Budget Positive (Ne~ative) 430,000 430,000 (100) (5,791) 17,087 11 ,196 418,804 215,000 53,207 113 ,82 1 (711,251) (329,223) 89 ,581 89,581 2013 Actual 720 ,000 720,000 10,000 845,191 855,191 (135,191) 778,133 1,338 26 ,626 (87,288) (108,000) (40,556) 570,253 435,062 66,500 501,562 20,884,148 21 ,385,7 10 KODIAK ISLAND BOROUGH Enterpri se Fund s Kodiak F isheri es Re sea rch Center Sch ed ule of Revenue s, Ex penses, and Changes in Ne t Po s ition Budget and Act ua l Year e nded June 30, 20 14 (With financial infonnat ion for th e year ended Jun e 30 , 2013 ) 2014 Variance with Final Budget F inal Posit iv e Budget Actual (Negative) Operating revenue s: Lea se incom e $ 1,5 43 ,500 1,851 ,322 307,822 Other 4 39 4 39 Total operatin g reven ues 1,5 4 3,5 00 1,851 ,761 308,26 1 Operating expenses: Per sonnel se rvic es 35 1,882 359,783 (7,90 1) Maintenance and repairs 95,000 1,144 93,856 Depreciation 750,2 00 636,143 114 ,0 57 Gener al and admini stration: C leanin g and janitorial 55,7 00 50,114 5,586 Heating 205,000 15 5,290 4 9,7 10 Electrical 188 ,500 152 ,984 35,5 16 Plumbing 169 ,000 50,384 118 ,616 Air conditioning 628 (628) E le vators 3,000 2 ,15 0 850 Mi sce llaneou s 11 3,943 4 7,090 66 ,853 Total operating expenses 1,932,225 1,455,710 476,5 15 Operating income (lo ss) (388,725) 396,051 784,337 Other income (expense): State of Ala ska on-behalf paym e nt In vesttnent income 38,550 38,550 Intere st expen se 225,400 (225,401) (450,801) Total other incom e (expense) 225 ,400 (186,851) (412 ,2 51) Change in net po sition $ (163 ,325) 209,200 372,086 Net po s ition , at beg inning of year 10,178,9 86 Net po s ition , at end of year $ 10 ,388 ,186 111 2013 Actual 1,6 03,503 1,603,5 0 3 34 3,270 99 635,031 48,908 2 10,977 170 ,062 34 ,064 5,500 67 ,276 1,515 ,187 88 ,316 23 ,329 27,534 (259 ,875) (209,012) (120,696) 10,299 ,682 10 ,178,986 KODIAK ISLAND BOROUGH Enterpri se Fund s 911 Service Fund Schedu le of Revenue s, Expenses, and C hanges in Ne t Pos iti on Budget and Actual Year ended June 30, 2014 (With financial infonnation for the year ended June 30, 2013) Operating revenues: Customer charges Operating expenses: Personnel services Miscellaneous Telephone services Total operating expenses Operating income (lo ss ) Net position, at beginning of year Net position, at end of year $ $ Final Budget 50 ,000 3,000 100 46 ,900 50,000 112 2014 Actual 39,817 3,000 98 36,7 19 39,8 17 $==== Variance with Fi nal Budget Positive (Negative) (10,183) 2 10 ,181 10 ,183 2013 Actual 39,7 69 3 ,000 142 84 ,454 87,596 (47,827) 47 ,827 SUPPLEMENTARY SCHEDULES J J . , . KODlAK ISLAND BOROUGH SUMMARY O F BONDED DEBT SERVICE REQU IREMENTS TO MATURITY Jun e 30, 2014 Annua l principal and interest re quirem ents on Ge neral Obli gat ion Refundin g and Construction Bond s. Fi sca l Year PrinciEa l In terest Total 2015 $ 2,640,000 $ 3,119 ,88 5 $ 5,759,885 20 16 3,170,000 2,989,362 6,159 ,362 20 17 3,295,000 2,86 9,2 12 6,164,2 12 20 18 3,395 ,000 2,750 ,462 6,145,462 20 19 3,540,000 2,6 17,362 6,15 7,362 2020 3,670,000 2 ,478,487 6,14 8,487 202 1 3,8 15,000 2 ,33 6,09 9 6,15 1,099 2022 3,980,000 2,166,550 6 ,146 ,55 0 2023 4 ,160,000 1,985 ,699 6,145 ,699 2024 4 ,355,000 1,7 89,538 6,144,538 2025 4 ,57 0,000 1,572 ,570 6,14 2 ,570 2026 3,310,000 1,402 ,026 4 ,7 12,026 2027 3,470,000 1,238,228 4,708,228 2028 3,645,000 1,064 ,122 4 ,709,122 2029 3,205 ,000 881,234 4 ,086,234 2030 3,365 ,000 720,316 4,085 ,3 16 203 1 3,535,000 55 1,360 4 ,086,360 2032 3,085 ,000 38 1,190 3,466 ,190 2 0 33 3,240,000 226,940 3,466,940 2034 1,690 ,0 00 84 ,750 1,77 4 ,750 $ 69,135,000 $ 33,22 5,39 2 $ 102,360,392 113 (This page was left blank intentio nall y) KODIAK ISLAND BOROUGH GENERAL OBLIGATION BOND, 2004 SERIES D RETIREMENT SCHEDULE June 30, 2014 2004 D BOND ISSUE This iss ue, dated December 1,2004 , wa s iss ued under a book entry system regi stered in the nam e of Cede & Company, as Nominee of the Depo s itory Trust Co mpany, New York, New York, the securitie s depo s itory for the 2004 Series D Bond. This issue was marketed by th e Alaska Municipal Bond Bank . Legal opinion wa s rendered by bond council , Wohlforth, Vassar, Johnson & Brecht of Anchorage, Alaska. This bond wa s iss ued to fund the acquisition and construction of sc hool capital improvements in the Borough, includin g a new sc hool pool and the Kodiak High School Voc Ed/Classroom reclamation. Fiscal year Interest rate 2015 4.00% Interest du e November 01 $ 10 ,600 Principal due November 01 $ 530,000 114 $ Intere st du e May OI $ Total 540,600 KODIAK ISLAND BOROUGH GENERAL OBLIGATION BOND, 2008 SERlES A RETIREMENT SCHEDULE Jun e 30 , 20 14 2008 A BOND ISSUE Thi s issue, dated April 15,2008, was iss ued under a bo ok entry system re gistered in the nam e of Cede & Compa ny, a s Nominee of the Depository Trust Compan y, New York, New York, th e sec uriti es depo s itory for the 2008 Series A Bond. This issue was marketed by the Alaska Municipal Bond Bank. Legal opinion was rendered by bond council , Birch, Horton, Bittner and C herot of Anchorage, Alaska. Thi s bond wa s issued to fund the acq ui sition and construction of school capital improvements in the Borough , including a new schoo l pool. Int ere st due Principal due Interest due Fiscal ~ear Interest rate October 01 AerilOI AerilOI Total 2015 5.00% $ 144,605 $ 335 ,000 $ 144,605 $ 624,210 20 16 5.00% 136,230 350,000 136 ,230 622,460 2017 4 .00% 12 7,480 370,000 127 ,4 80 624 ,960 2018 4.00% 120,080 380,000 120 ,080 620,160 2019 4.00% 112,480 400,000 112 ,480 624 ,960 2020 4.25% 104 ,480 415,000 104,480 623 ,960 2021 4 .25% 95,661 430,000 95,661 621 ,3 22 2022 4.38% 86,524 450,000 86,524 623 ,048 2023 4.50% 76,680 470,000 76,680 623,360 2024 4.70% 66 ,105 490,000 66,105 622,210 2025 4.80% 54,590 515,000 54,590 624 ,180 2026 4.90% 42,230 540,000 42,230 624,460 2027 5.00% 29,000 565,000 29,000 623 ,000 2028 5.00% 14,875 595,000 14 ,875 624,750 $ 1,211,020 $ 6,305,000 $ 1,211,020 $ 8,727,040 liS KODIAK ISLAND BOROUGH GENERAL OBLIGA nON BOND, 20 II SERIES ONE RETIREMENT SCHEDULE June 30, 2014 2011 SERIES ONE BOND ISSUE This issue , dated March 1, 2011 , was issued under a book entry system registered in the name of Cede & Company, as Nominee of the Depository Trust Company, New York, New York, the securit ie s depository for the 2011 Series One Bond. This issue was marketed by the Alaska Municipal Bond Bank. Legal opinion was rendered by bond council , Birch, Horton, Bittner and Cherot of Anchorage, Alaska. This bond was issued to fund the High Schoo l Renovation and Renewal project. Interest due Principal due Interest due Fiscal ;tear Interest rate SeE tember 0 I AErilOI March 01 Total 2015 2.05% $ 160,500 $ 305,000 $ 160 ,500 $ 626,000 20 16 2.36% 155,925 310,000 155,925 621,850 2017 2.75% 151 ,27 5 320,000 151,275 622,550 2018 3.12% 146,475 330,000 146,475 622,950 2019 3.45% 140 ,700 340,000 140,700 621,400 2020 3.70% 133,900 355,000 133 ,900 622,800 2021 3.93% 126 ,800 370,000 126,800 623 ,600 2022 4.80% 119,400 385,000 119,400 623,800 2023 4.80% 110 ,256 405,000 110,256 625,512 2024 4.80% 100 ,638 425,000 100,638 626,276 2025 5 .20% 90,544 445,000 90,544 626,088 2026 5.20% 79,975 465,000 79,975 624,950 2027 5.20% 68,931 485,000 68,931 622,862 2028 5.20% 56,503 510,000 56,503 623,006 2029 5.20% 43,434 535,000 43,434 62 1,868 2030 5.20% 29,725 565,000 29,725 624,450 2031 5.20% 15,247 595,000 15,247 625,494 $ 1,730,228 $ 7,145,000 $ 1,730,228 $ 10,605,456 116 KODIAK ISLAND BOROUGH GENERAL OBLIGATION BOND, 20 12 SERIES A RETIREMENT SC HEDULE June 30, 20 14 2012 A BOND ISSUE Thi s issue, dated Ma y 24, 20 12 wa s is sued under a book entry sy stem regi stered in the name of Cede & Company, as Nominee of the Depository Tru st Company, New York, Ne w York, th e securities depository for the 20 12 Ser ies A Bond. This iss ue wa s marketed by the Ala ska Municipal Bond Bank. Lega l opinion was rendered by bond council , Wohlforth , Vassar, John son & Brecht of Anchorage, Alaska. This bond was iss ued to refund part of the 2004C Bond which was is s ued to fund planning, de s ign , and con struction of c ap it a l improvements to the Larsen Bay School, Kodiak Middle School and Kodiak High School. Interest due Principal due Interest due Fiscal :tear Interest rate SeEtember 1 SeEtember I March 1 Total 2015 2.00% $ 11 3,400 $ $ 113 ,400 $ 226 ,800 2016 4.00% 11 3 ,400 435 ,000 104,700 653 ,100 2017 4.00% 104,700 455 ,000 95 ,600 655 ,300 20 18 2.00% 95 ,600 460,000 9 1,000 646 ,600 2019 4.00% 91 ,000 480,000 81,400 652 ,400 2020 5.00% 81,400 495 ,000 69,025 645,425 2021 5.00% 69 ,025 525 ,000 55 ,900 649 ,925 2022 4.00% 55 ,900 545,000 45 ,000 645,900 2023 5 .00% 45 ,000 570,000 30,750 645 ,750 2024 5.00% 30,750 600,000 15,750 646 ,500 2025 5.00% 15,750 630,000 645,750 $ 815,925 $ 5,195,000 $ 702,525 $ 6,713 ,450 117 KODIAK ISLAND BOROUGH GENERAL OBLIGATION BOND, 2012 SERJES B RETIREMENT SCHEDULE June 30, 20 14 2012 B BOND ISSUE Thi s issue , dated May 24, 2012 was issued under a book ent ry syste m registered in th e nam e of Cede & Company, as No min ee of the Depository Tru st Co mpan y, New York , New York , the sec uriti es depos ito ry for the 20 12 Ser ies B Bond. Thi s issue was marketed by t he A laska Municipa l Bond Bank. Legal op ini on was rendered by bond council , Wohlforth, Va ssa r, John so n & Brecht of Anchorage , Alaska. This bond wa s iss ued to refund part of the 2004D bond iss ue, whic h was u sed to fund the acquisition and construction of schoo l cap it al impro vemen ts in the Borough , including a new school pool and the Kodiak High School Voc!E d C lass room reclamation. Interest due Pri!lcip ai du e Interest due Fisca l year Interest rate Se~tember 1 Se~tember I March I Tota l 20 15 2.00 % $ 138 ,375 $ $ 138 ,375 $ 276,750 20 16 4.00% 138 ,375 530,000 127,775 796,150 20 17 4.00% 127 ,775 550,000 11 6,775 794,550 2018 2.00% 11 6 ,775 565,000 111 ,12 5 792,900 2019 4.00% 111 ,125 585 ,000 99,42 5 795,550 2020 5 .00% 99,425 6 10,000 84 ,175 793 ,600 202 1 5.00% 84,175 640,000 68 ,17 5 792,350 2022 4.00% 68,17 5 665,000 54 ,875 788 ,050 2023 5.00% 54 ,875 695,000 37,500 787 ,3 75 2024 5.00% 37,500 730,000 19 ,250 786,750 2025 5.00% 19 ,250 770,000 789,250 $ 995 ,825 $ 6,340,000 $ 857 ,450 $ 8,19 3 ,275 118 KODIAK ISLAND BOROUGH GENE RA L OBLIGA TlON BOND, 2013 SERJ ES ONE RET IREMENT SCHEDULE June 30, 20 14 2013 SERIES ONE BOND ISS UE Thi s iss ue, da te d March 1,20 13, was iss ued under a book entry sys tem re g istered in th e name of Ce de & Co mpan y, a s Nominee of the Depos itory Tru st C ompany, New York, New York, th e se curiti es depos itory for th e 20 13 Series On e Bond . This iss ue wa s ma rketed by the A las ka Municipa l Bond Bank . Legal opinion was rendered by bond counci l, Birch , Horton, Bittner and Cherot o f Anchorage, Alaska. Thi s bond wa s iss ued to fund the High Sc hoo l Renovation an d Renewa l proj ect. Intere st Interest Due Prin c ipal Due Interest due Fi sca l Year Rate Au gust 01 February 01 February 01 Total 2015 4.00% $ 479,670 $ 73 0,000 $ 479 ,670 $ 1,689 ,3 40 2016 4.00% 465,070 760 ,000 465,070 1,690 ,140 2017 4.00 % 449,870 79 0 ,000 449 ,870 1,689 ,740 20 18 4 .00% 434 ,070 820,000 434,070 1,688 ,140 20 19 5.00% 417 ,670 855 ,000 417,670 1,690 ,34 0 2020 4 .00% 396,2 95 895 ,000 39 6,295 1,687,590 202 1 4.00% 378,395 935 ,000 378,395 1,691 ,790 2022 4.00% 359,695 970 ,000 359,695 1,689,390 2023 4 .00% 340,295 1,010 ,000 340,295 1,690 ,590 2024 5 .00% 32 0,095 1,050 ,0 00 320,095 1,690 ,190 2025 5.00% 293,845 1,100 ,000 293,845 1,687 ,690 2026 5.00% 266,345 1,155,000 266,345 1,687 ,690 2027 5.00% 237,470 1,215 ,000 237,470 1,689,940 2028 5.00% 207,095 1,275 ,000 207,095 1,689,190 2029 5 .00% 175 ,220 1,340,000 175 ,220 1,690,440 2030 5.00% 141 ,720 1,405,000 141,720 1,688 ,440 203 1 5.00% 106,595 1,475 ,000 106 ,595 1,688 ,190 2032 5.00% 69,720 1,550 ,000 69,720 1,689,440 2033 3.80% 30 ,970 1,630 ,000 30,970 1,691 ,940 $ 5,570,105 $ 20,960,000 $ 5,570,105 $ 32,100,210 119 KODIAK ISLAND BOROUGH GENERAL OBLlGATION BOND, 2014 SERIES ONE RETIREMENT SCHEDULE June 30, 2014 2014 SERIES ONE BOND ISSUE This iss ue , dated March 12 ,201 3, wa s iss ued under a book entry system regi stered in th e nam e orCede & Company, a s No min ee of the Depository Trust Company, New York, New York , th e sec uriti es depos itory for th e 20 13Seri es One Bond. This iss ue was marketed by th e Alaska Municipal Bond Bank. Legal opinion was rendered by bond council, Birch, Horton, Bittner and Cherot of Anchorage, A laska. This bond was iss ued to fund the High School Renovation and Renewal project. Interest Interest Due Principal Due Interest Due Fiscal Year Rate September 01 March 01 March 01 Tota l 20 15 2.00% $ 533,454 $ 740,000 $ 502 ,73 1 $ 1,776,185 2016 3.00% 495 ,33 1 785 ,000 495 ,33 1 1,775,662 2017 4.00% 483,556 810,000 483 ,556 1,777,112 2018 5.00% 467,356 840,000 46 7,356 1,7 74 ,712 2019 2.00% 446,356 880,000 446,356 1,772 ,7 12 2020 2.00% 43 7,556 900,000 4 37,556 1,77 5,112 2021 5.00% 428,556 915,000 428,556 1,772,112 2022 5.00% 405 ,68 1 965,000 405,681 1,776,362 2023 5.00% 381 ,556 1,010 ,000 381,556 1,7 73 ,112 2024 5.00% 356,306 1,060 ,000 356,306 1,7 72,612 2025 3.12% 329,806 1,110 ,000 329,806 1,769,612 2026 5.00% 3 12 ,463 1,150,000 312,463 1,774,926 2027 5.00% 283,713 1,2 05,000 283,713 1,772,426 2028 5.00% 253 ,5 88 1,2 65 ,000 253,588 1,772,176 2029 5.00% 221 ,963 1,330,000 221,963 1,773 ,926 2030 5.00% 188,713 1,395,000 188 ,713 1,772,426 2031 4.50% 153 ,838 1,465 ,000 153 ,838 1,772,676 2032 5.00% 120,875 1,535 ,000 120;875 1,776,750 2033 5.00% 82 ,5 00 1,610,000 82 ,5 00 1,775,000 2034 5.00% 42,250 1,690,000 42 ,500 1,774,750 $ 6,425 ,4 17 $ 22,660,000 $ 6,394,944 $ 35,480,361 120 (This page was left blank intentionally) STATISTICAL SECTION • .I _.J STATISTICAL SECTION This part of the Kodiak Island Borough's comprehensive annual financial report presents detailed information as a context for understanding what the information in the fmancial statements, note disclosures , and required supplementary infoffilation says about the governments' overall fmancial health. Contents Financial T rends These schedules contain trend informatio n to help the reader understand how the government's finanCial performance and well-being have changed over time. Revenue Capacity These schedules contain information to help the reader assess the govern- ment 's most significant local revenue source, the property tax. Debt Capacity These schedules present information to help the reader assess the afJorda - bility of the government's current levels of outstanding debt and th e gov- ernment's ability to issue additional debt in the future. Demographic and Economic Information These schedules ofJer demographic and economc indicators to help the reader understand the environment within which the gove rnment 's finan- cial activities take place. Page 121-124 125-129 130-134 135-141 Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the revelant year. · , . r KODIAK ISLAND BOROUGH Net Po s itio n by Component La st Te n Fiscal Yea rs (accrual basis of accounting) Fisca l Year 2005 2006 2007 2008 2009 Gove rnm ent al act ivit ies: Net in vestment in capita l assets $ 61,154,2 04 $ 62,7 16 ,326 $ 73 ,425,394 $ 25 ,127 ,779 $ 71 ,534,766 Unrestricted 45,052,197 4 5,653 ,357 37,640,7 16 89,853 ,794 48 ,140 ,406 Tota l gove rnm enta l activitie s net assets $ 106,206,401 $ 108,369,683 $ 111 ,066,11 0 $ 114,981 ,573 $ 11 9,675,172 Business-type act ivities: Net in vestment in cap it al assets $ 39,878,78 5 $ 38,588,510 $ 38,623,762 $ 34,706,597 $ 38,135,3 40 Unrestricted (7 ,263,950) (6,133,853) (5 ,503,362) (2,862 ,363) (2,939,30 1) Total busines s-typ e act iv itie s net asse ts $ 32,6 14 ,835 $ 32,454,657 $ 33,120 ,400 $ 3 1,8 44 ,234 $ 35,196,039 Primary government: Net investm ent in cap ital assets $ 101 ,032,98 9 $ 101 ,304,836 $ 112,049,156 $ 59,8 34 ,376 $ 109,670,106 Unrestricted 37,788,247 39,5 19,504 32,137,354 86,99 1,431 45,20 1,105 Total primary governm ent net asse ts $ 138,82 1,236 $ 140 ,824,340 $ 14 4,186,510 $ 14 6,825 ,807 $ 154,87 1,2 11 Fisca l Year 2010 2011 2012 2013 2014 Governmenta l activit ies: Net in vest ment in capi tal assets $ 77,447,045 $ 8 1,789,375 $ 85,285,497 $ 72,773,598 80,159 ,521 Un restric ted 48 ,992 ,902 47 ,094 ,977 48,265,320 47,149,835 46 ,754 ,46 1 Tota l governmenta l activ iti es net assets $ 126,439,947 $ 128,8 84 ,352 $ 133,550,8 17 $ 119,923 ,433 126,913,982 Bu sin ess-type act ivities: Net investment in capital assets $ 36,655,859 $ 35,170,143 $ 3 1,967,945 $ 2 1,628,143 36,383,229 Unrest rict ed (598,367) 1,137,826 4,532 ,56 1 20,750,32 1 12,115 ,258 Tota l bu sin ess-type activ ities net assets $ 36,057,492 $ 36,307,969 $ 36,500,506 $ 42,378,464 48,498,487 Primary gove rnm ent: Ne t investment in capi tal asse ts $ 114,102,904 $ 116,959,5 18 $ 11 7,785,10 8 $ 94 ,401 ,74 1 11 6,542,750 Unrestr ict ed 48,394 ,535 48 ,232 ,803 55 ,522,297 67 ,900,156 58 ,869,719 Tota l primary government net assets $ 162,497,439 $ 165,192,32 1 $ 173,307,405 $ 162,30 1,897 175 ,4 12 ,469 So ur ce: Borough general ledger 121 KODIAK I SLAND BORO UGH Fund Balances of Govemmental Funds Last Five Fiscal Years (modified accrual ba sis of accounting) F is ca l Yea r 2010 ill! 2012 2013 2014 Ge ne ral Fund: Nonspendab le $ 15 ,703 $ 6 ,801 $ 166,020 $ 6 ,324 $ 1,459 Comm itted Unassigned 2,366 ,973 1,9 52 ,757 3,126,037 3,3 40,662 3,502,489 To tal General Fund $ 2,382 ,676 $ 1,959,558 $ 3 ,292,057 $ 3,346 ,986 $ 3,503,948 All other govern mental fund s Nonspendablc $ 34 ,342 $ 2 1,704 $ 5 .114 ,902 $ 4 ,636,976 $ 513 ,765 Committed 52,453 ,87 1 57,633,409 37,188 ,510 37 ,902,356 42,355 ,129 Assigned 11,464,575 29,98 1,503 28,875,499 Unass igned (805 ,499) (1 ,179,132) (1 ,989,279) (5 1,337) (2,929,481) Total a ll other governmental fu nds $ 51,682,7 14 $ 56,475,98 1 $ 5 1,878,708 $ 72,469,498 $ 68,81 4,9 12 The Kodiak Island Borough imp lemented GASB 54 in Fiscal Year 2011 . Thai is why the re is only five ye ars of data. 123 KOD IAK ISLAND BO ROUC H Changes in Fund &Iances ofGovemmentai Funds Last Ten Fiscal Years (modified laNai buis of accounting) Fbl.'lll Yur ,." , ... '007 2('" 2('" 20 10 2 011 2012 20 1J 201 4 Rev cnu u: Property tlXes and assessments S 9,042,84 3 9,786,201 9,681,815 10,175,295 10,477,347 10,993.175 11,909,806 13,052,598 12,936,796 13,656,771 Tran$ient accommodations 1l1li: 20,886 47 ,645 68,367 79,182 88,338 36,003 96,384 87,400 96,640 75,]42 Intergovernmental : Slate $OUrces 2,169,303 3,363,491 4,012,647 4,42M72 5,966,803 10,6]0,23 1 7,029,684 5,313,092 7,929,017 12,933,158 Feder al sources 3,853,343 1,766,926 1,417,403 2,553,990 3,122,316 2,338,468 2,149,205 1,940,376 1,659,372 ],933,672 Severance taxes 1,005,539 1,186,908 1,316,689 1,436,2]0 1,311,138 1,336,075 1,649,275 1,970,265 1,774,700 1,843,819 Licenses, pennilS, fees, and otm local revenues 692,'" 820,286 690,962 658,331 742,527 766,193 719,318 634,697 657,025 101,999 Ot her rev enues 15 ,841 125,040 633,925 353,850 418,741 459,412 720,659 44,304 52,5]6 50,556 Investment eamings 1,71~893 2,803,466 3,75 11609 3,918,008 2,038,915 1225933 70fJ,617 1,857,413 536,903 1,115,466 Total revenues 13,633,693 19,904,963 21,573,917 23,603,3S8 24,216.180 27,815,495 24,981,50S 24,950,145 25,642,969 ~3r5,583 EI.JH'ndltu res: General government 2,713,633 3,950,927 4,504,052 3,318,544 4,067,024 4,600,601 4,S13,287 4,S48,305 5,307,199 5,449,505 Publicwety 425,506 385,529 460,826 502,491 537,623 447,479 469,280 576,720 Emergency preparedness 23,521 6,098 7,884 5,713 12,488 8,011 lI,705 18,923 18,342 9,987 Community an d economic deve lopment 509,680 784,002 786,614 923,203 908,501 1,034,686 1,211,189 1,195,23 7 1,070,991 964,317 Health and sanitation department 329,738 363,520 373,132 387,053 333,747 311,321 392,011 391,996 290,800 326,700 Education. culture, and recreation 185,993 161,633 158,161 183 ,741 248,m 192,182 85,690 64,239 84,213 95,625 Park$ and recrea!ion 13 ,625 5,825 21,100 37,795 MaintCfllnce IIIld operations 698,119 Scrvice district maintenance )47,934 336,385 498,53 9 374,320 398,219 543,897 593,388 705,665 479,264 631,572 Primary and secondary educa!ion 7,973,035 8,430,840 8,387,440 9,123,412 9,956 ,618 9,980,350 10,127,350 10,337,349 10,442,350 10,845,220 Fern Fu!1eT-tru~t 22,547 Ca pitlll outlay: Schools 68,109 464,142 1.436,639 7,029,628 14,851,064 7,)59,932 1,881 ,069 5,255,037 5,486,672 34,872,235 Gencrlll 2,972,174 332,398 373,038 837,]S9 1,271,106 4,319,438 4,839,652 562,007 2,Q41,674 1,521,996 Debt service: Pri ncipal 1,784,859 1,814 ,553 2,100,)61 2,205,441 2,495,056 2.685,606 2,750,690 2,780,776 2,966,441 3,645,950 Interest 984,766 1,584 ,763 1,336,349 1,263,176 1,578,408 1,356,872 1,292,645 2,695,657 1,254,225 2,109,406 Other charges -bond iS$Uance costs 43,661 68 635 40,689 100,149 20,809 89,835 TOiaI expenditures 19083275 18,229,26 1 19,9622Q9 26,586,955 36662,263 32955,387 28,595,613 29,409,194 29953,420 6 1,176,923 Excess of revenues over (under) expenditures, (449,582) 1,675,702 1,611,7ot! (2,933,567) (12,446,083) (5 ,139,892) (3,614,105) (4,459,Q49) (4,310,451) (28,861,340) O th er FInancing Sources (VI ~'): Proceeds from sales of bonds 20,350,000 8,000,000 8,049,2)) 21,595,000 22,660,000 Bond premium 121,590 3,424,819 2,427,432 Refunding bonds iS$Ued 6,740,000 13,578,039 Payment to refunded bond escrow ag~m (6,S65,467) (12,180,000) Proceeds from sale ofassets 9,564 Land sale proceeds 22,738 177,164 47,087 19,458 30,561 138,867 15,021 10,735 6,787 356,284 Transfers in 1,800,2 12 1,751,182 2,626,853 2,966,610 6,144,30 1 3,2 11 ,195 3,782,289 951,652 6,212,885 992,365 Transfers ou ! {I,629,6 10} (1,503,9021 p ,464,2 101 {2,839,5601 16,909 791) p,291,195) p,8622892 (1 ,03 7,652) (6292,885) (1,072,3651 Total other linancing sourccs(uSC!) 20,664,930 424.444 209,730 8,146,508 1860,3961 53,867 7,984 254 l,328,774 24,956,170 25,)63,716 Net change in fund balances 20,215.348 2,100,146 l t821.438 5,162,94 1 (13 306,479) (5,OSI,025) 4,370,149 (3,130,275) 20,645,7 19 (3,497.624) Debt service as a pe~age of noncapital expenditures 15,01 % 19,99 "4 19,20 % 19.45 % 20,91 ~o 19 .41 % 1$,53 % 27.22 ~. 17.62 % 22 ,51 % The Kodiak Island Borough im plemented GAS B 34 in Fiscal Year 2004, 12. KODIAK ISLAND BORO UGH Genera l Reve nu es by Source (a) La st Te n Fisca l Years Licenses, Inter- F iscal Permits Governmental Investment Ope rnting M iscellaneous Year Taxes and Fees Revenue Income T ra ns fer s Rev enue Total 2005 9,378,8 16 161 ,62 1 1,925,405 265,392 11 ,731 ,234 2006 10 ,257,023 171 ,962 2 ,369,185 469,913 13,268,083 2007 10 ,218 ,016 78,720 3,325 ,899 399,149 82 ,604 14,104,388 2008 10,792,741 100 ,256 3,276,741 544,926 14 ,7 14 ,664 2009 10 ,86 4,441 65 ,417 4,461 ,624 292 ,825 131,944 15 ,8 16,25 1 20 10 11 ,2 19 ,182 71 ,3 19 4 ,123 ,507 178 ,567 38,352 15,630,927 20 11 12 ,412 ,832 72 ,394 3,642 ,009 (2 1,628) 537,235 16,642,8 42 20 12 2 ,29 1,625 65,42 1 4,425 ,447 28 1,792 16 ,177 7,080,462 2013 2,035 ,97 1 66,476 4,787,308 39,078 29,335 30,733 6,988,901 2014 2,051,794 82 ,713 4,605,916 23 ,804 14,328 6,778 ,555 (a) Includ es Gene ra l Fund o nly. Source: Borough ge nera l ledger. 125 KODIAK ISLAND BOROUG H Direct and O ... ttlapp ing Property Ta.~ Rates and Contrib uti o ns to the School Di strict (per $1 ,000 of Assessed Value) Last Ten Fisc al Years' Dirett R a t e Ove rla(!(!ing Rates Woodland" Trinity" Mission " Fiscal A,~ Is land! Lake Fire Areas" Year Borough Edutation Re newa l City' Street Street Tide ROIHJ Service! Areas' Fire Ended Basic Support De bt .n' or Lighting Lighting Gate l\fonllShka Service HIIY View \Vomen~ ProtNtion \Vom en J June 30, Rate Fund Service Rel!lucment Kodia k Arel A rea Area Ha! Di s trict I Road On A rea No, I ~ Airport 2005 10 .25 2.00 0.50 1.00 1.50 1.00 1.00 2.00 1.50 1.25 1.25 2006 11.00 2.00 0.50 1.00 2.50 1.25 1.00 2.00 1.50 1.25 1.25 2007 10 .50 2.00 0.5 0 1.00 2.30 1.2 5 1.00 2.00 1.50 1.2 5 1.23 2008 10.30 2.00 0 .50 1.00 2.30 1.23 1.00 2.00 1.5 0 1.2 3 1.25 2009 10 .30 2.00 0.2S O.SO 1.00 2.30 1.50 1.00 2.00 1.3 0 1.23 1.2S 2010 10.50 2.00 0.25 0.50 1.00 2.30 1.50 1.00 2.00 1.50 1.23 1.25 20 11 10 .30 2.00 0.25 O.SO 1.00 2.30 1.50 1.00 2.30 LSO 1.25 1.2 5 20 12 0.03 9.09 1.53 0.08 2.00 0.25 0.50 1.00 2.5 0 1.3 0 1.00 2.50 1.50 1.25 1.2 5 2013 0.03 9.03 1.6 1 0.08 2.00 0 .25 0.50 1.00 2.50 0.5 0 1.13 2.50 1.50 1.2 5 1.25 2014 0.03 8.75 1.8 1 0.16 2.00 0.25 0.5 0 1.00 2.50 1.50 1.50 2.50 1.30 1.25 1.25 Note: Th e maximum mill rate allowed by State code is 30 mill s Overlappin g rates are those of local governments that app ly 10 property owners within th e City of Kodiak. 2 Overlapping rale s are those wh ic h apply 10 property owners located within special taxing di stricts in the borough. Th ey do nOI apply to every pr operty owne r in the Boro ugh. 127 Fiscal Year Taxes Levied Ended for the June 30, Fiscal Year 2005 $ 8,756,263 2006 9,733 ,253 2007 9,298,329 2008 9,979,775 2009 10,231 ,461 2010 10,879,276 20 11 11 ,536,75 8 2012 13,255,665 2013 13 ,581 ,524 2014 14 ,424,260 Source : Borough general ledger. KODIAK ISLAND BOROUGH Property Tax Levies and Collections Las t Ten Fisca l Years Collected within the Fiscal Year of t h e Lev):: Collectio n s Percentage in S u bsequent Amount of Levy Years 8,602,243 98.2 153 ,837 9,320,203 95.8 412,332 9,169,456 98 .6 126 ,255 9,615,784 96.4 361 ,432 10,201,209 99.7 24,891 10 ,4 87,467 96.4 383 ,320 11 ,499,457 99.7 38 ,109 13,038,077 98.4 273,899 13,477 ,005 99.2 113 ,2 96 14,250,305 98.8 128 Total Collections to Date Percentage Amount of Levy 8,756,080 100 .0 9,732,535 100.0 9,295,711 100 .0 9,977 ,216 100 .0 10 ,229 ,858 100.0 10 ,872,433 99.9 11 ,537 ,566 100 .0 13,31 1,976 100.4 13 ,590,30 1 100 .1 14,250,305 98.8 KODIAK ISLANO BORO UGH Principal Propeny Ta x Payers Current Year and Ten Years Ago 2014 2004 PC'rcentagC' Puunta ge Taxable o(To(al Borough Taxable or Tota l Borough Asstssed Assrssed Ass essrd Assessed Taxj!a vtr Value Rank Va lue Va lue Rank Va lu e Ocean Beauty Seafoo ds $ 25,59 1,900 2.2% $ 9,824 ,538 3 1.3 % Trident Seafood s Corp 2 1,075,400 2 1.8% 1.4 % Int'l Seafoods of Alas ka 16,4 59 ,000 3 1.4 % 9,837,184 4 1.3% We stward Se afood s In c 14 ,762 ,500 4 1.3 % North Pac ific Seafoods 14 ,113 ,600 5 1.2% 0.9% Br echan En te rpr ises 11 ,442 ,200 6 1.0% 8,965 ,2 19 5 1.2% Wa l-Mart/Sa ms Club 9,609 ,000 7 0 .8% 7,93 4,200 6 1.0010 Mill Say Pl aza Assoc LTD 8,95 2,200 8 0.8% 7,138,400 8 0 .9% Gel Communi cat ion s Corp 7,641 ,000 9 0.7% 1.7% Horizon Lin es of Alask a LLC (a) 7,3 16,800 10 0 .6 % 7,2 52,942 9 1.7% Western Alaska Fi sheri es 11 ,487 ,450 1 1.5% Alaska Communi cation s Sys tems 11 ,771 ,192 2 1.5% Afognak Native Corporat ion 9,623 ,32 1 7 1.3 % Kodiak Fi shmea l Company 7,40 9,320 10 0.9% Total $ 136,963 ,600 11.7% $ 9 1,243 ,766 11.5% Source : Borough tax reco rd s. (a) In 2004 company nam e was CSX Line s LLC 129 KODIAK ISLAND BOROUGH Ratios of N et Bonded Debt Last Ten Fi scal Years Net Total Taxable Net Debt Per Fiscal Assessed Bonded Pe r Assessed Year Population Value Debt Capita Value 2005 13,693 (b) 783 ,907 ,45 1 33 ,08 0,509 2,4 16 4 .22% 2006 13,457 (c) 783,907,45 1 31 ,264,429 2,323 3.99% 2007 13,664 (a) 805,681,814 29,163,349 2,134 3.62% 2008 13,954 (a) 835,525,537 34 ,957,269 2,505 4.18% 2009 13 ,860 (a) 870,472,985 32,534,424 2,347 3.74% 2010 13,592 (a) 913,0 14 ,985 29 ,838,432 2,195 3.27% 2011 13 ,870 (a) 988,879,125 35 ,124,21 I 2,532 3.55% 2012 14 ,041 (a) 1,039,223 ,833 33,510,913 2,387 3.22% 2013 13 ,824 (a) 1,085,968,280 55,236,114 3,996 5.09% 2014 • (a) 1,131 ,476,6 1 I 76,227,556 • • Sources: lnfonnation obtai ned from assessment record s and Borough general ledger except as otherwise no·ted. (a) lnfonnation obtained fi'om State of Alaska, Department of Community and Regional Affairs, Certified Population for Revenue Sharing Program. (b) Infonnation obtained from State of Alaska, Departme nt of Commerce, Commun ity and E conomic Development, Comunnity Database . (c) Infonnation obtained from State of Alaska, Department of Labor, Econom ic lnfonnation. Note: Detail regarding the borough's outstanding debt can be found in the notes to the financial statements. • lnfonnation not available at report time 130 Kodiak Island Borough: General obligation bonds City of Kodiak: General obligation bonds Total KODIAK ISLAND BOROUGH Computation of Direct and Overlapping Debt June 30, 2014 Percentage Net Debt Applicable to this Outstanding Governmental (a) Unit (b) $ 76 ,264,598 100% 7,075,000 100% $ 83 ,339,598 (a) Gross debt outstanding less applicable amounts in the Debt Service Funds. Kodiak Island Borough Share of Debt(c) $ 76,264,598 7,075,000 $ 83,339,598 (b) Determined by ratio of assessed valuation of property subject to taxation in overlapping unit to valuation of property subject to taxation in reporting unit. (c) Per Alaska Statute 29.45.090 there is a limit ofJO mills for ad valorem taxes. Per Alaska Statute 29.45.100 the limitation on maximum mill rate does not apply to taxes levied to pay bonds . Sources: Borough general ledger and City of Kodiak records. 131 Taxable Assessed valu e Plus exempt p ro perty Total 200S $ 783 ,907,451 32 ,49 1,840 $ 8 16 ,399,291 2006 798 ,779 ,3 49 4 5,783 ,490 844 ,562,839 2007 805,681 ,814 49,539,000 855,220,8 14 KODIAK ISLAND BOROUGH Legal Debt Margin Infoon ation Last Ten Fi scal Years 2008 835 ,5 25 ,537 50,194,170 885,719,707 2009 870;472 ,985 45,18 8,050 915,66 1,035 The Stale of Alaska does not mandate a debt limit to its muni cipalities an d political subdivisi ons. Debt capacity is ultim ately d ete rmined by th e voters and the market place. Source: Boroug h assessme nt records (certified tax roll s). 132 2010 913 ,01 4 ,985 50,452 ,120 963 ,46 7.1 05 2011 98 8,879,125 55 ,543,030 1,0 44,42 2,155 2012 1,039 ,223 ,833 59 .588,100 1,098,8 11 ,9 33 2013 1,085,968 ,080 65 ,600 ,100 1,15 1,568,180 2014 1,131,476 ,6 11 71 ,462 ,869 1,202,939,480 Fiscal year 2005 2006 2007 2008 2009 20 10 2011 2012 2013 2014 KODIAK ISLAND BOROUGH Ratio of Annual Debt Service Ex penditures for General Bonded Debt to Total General Governmental Expenditures and Transfers La st Ten Fi scal Years Total General Fund Interest Total debt expenditures Principal (a) and fees service and transfers 1,780,4 17 983,19 5 2,763 ,612 12,027,7 17 1,814,553 1,583,488 3,398,041 13,054,983 2,100 ,361 1,329 ,456 3,429,817 13 ,337,188 2,205,441 1,255,313 3,460,754 14 ,277,498 2,495,056 1,57 1,295 4 ,066,351 15 ,922,441 2,685,606 1,350,620 4 ,036,226 16 ,372,540 2,750 ,690 1,287,822 4 ,083 ,335 17,065 ,960 2,780,776 2,691 ,426 5,472 ,202 5,747,963 2,966 ,441 1,244,233 4,2 10 ,674 6,933,972 3,645,950 2,107 ,198 5,753,148 6,621 ,593 Ratio of debt service to general expenditures 23.0 26 .0 25.7 24.2 25.5 24.7 23.9 95.2 60.7 86.9 (a) Serial maturities in the case of serial bonds; annual Debt Service Fund requirements in the case of term bonds. Sources: Borough genera l ledger and debt documents . 133 Governmental Activities General Fiscal Obligation Notes Year Bonds Payable 2005 33,080,509 88 ,243 2006 31,264,429 83 ,69 0 2007 29 ,163,349 77,470 2008 34,957,269 72,028 2009 32,534,424 66,505 2010 29,838,432 60,899 2011 35,124,211 55,209 2012 33,510,913 49,433 2013 55,236,114 42,992 2014 76,227,556 37,042 KODIAK ISLAND BOROUGH Ratios of Outstanding Debt by Type Last Ten Fiscal Years Business-type Activities Revenue Notes Bonds Payable 1,270,2 10 1,270 ,210 1,636,924 1,768,660 1,86 4,503 1,989 ,995 2,735,778 7,603,249 18 ,8 17 ,32 0 7,346 ,324 18 ,703 ,49 8 10 ,206 ,895 Total Primary Government 34,438 ,962 32,618,329 30,877,7 43 36,797,957 34,465,432 3 1,889,326 37,915,198 41,163,595 81,442,750 105 ,174,991 Note: Detail regarding the Borough's outstanding debt can be found in the notes to the financial statements . * Information not available at report time. 134 Percent of Personal Per Income Capita 8.31% 2,5 15 7.36% 2,424 6 .57% 2,260 7.47% 2,637 6.29% 2 ,487 5.52% 2,346 6.13% 2,734 6.25% 2,932 12 .07% 5,891 * • Fiscal Year 2005 Average Average Monthly Monthly E m~lo~ment Ea rnings Total Indu stries 5,38 1 $ 2,871 Private Ownership 4 ,042 2,757 Total Government 1,3 39 3,2 14 Private Goods -Produ cing 1,659 3,489 Private Service -Providing 2,3 84 2,245 Fiscal Vear 2009 Average Average Monthly Monthly Eml!lol:ment Earnings Total Indu stri es 5,961 $ 3,100 Private Ownership 4,485 2,956 Total Government 1,475 3,53 8 Private Good s-Producing 1,814 3,2 90 Private Service -Providing 2,671 2,730 Fiscal Yea r 2013 Average Average Monthly Monthly Em~lo~ment Earnings Total Indu strie s 6,411 $ 3,459 Private Owner ship 4,928 3,358 Total Government 1,483 3,795 Pri vate Goods -Producin g 2,138 3,704 Pri vate Service -Providing 2,7 90 3,092 KODIAK ISLAND BOROUGH Average Monthly Emp loyment & Earning s La st Ten Fiscal Years F iscal Vear 2006 Average Average Monthly Monthly Fiscal Year 2007 Average Average Monthly Monthly Em(!I0l:ment Earnings E ml!lo~ment Ear nings 5,553 $ 2,926 5,616 $ 3,060 4,191 2,80 3 4 ,160 2,979 1,36 1 3,306 1,456 3,291 1,69 1 3,382 1,63 1 3,5 55 2,5 00 2,4 12 2,529 2,608 Fiscal Vear 2010 "~iscal Year 2011 Average Average Average Average Monthly Monthly Monthly Monthly Eml!lol:ment Earnings Eml!l0l:ment Ear nings 5,961 $ 3,100 6,416 $ 3,362 4,485 2,956 4,898 3,263 1,475 3,538 1,5 18 3,68 1 1,814 3,290 2,11 3 3,619 2,671 2,730 2,785 2,993 Fiscal Year 2014 Average Average Monthly Monthly Eml!l0l::ment Ea rnings 6,472 $ 3,575 5,049 3,49 1 1,42 3 3,875 2,2 19 3,83 1 2,830 3,224 136 "~iscal Year 2008 Average Average Monthly Monthly Eml!)0l:ment Earnings 5,80 3 $ 3,111 4 ,3 40 3,006 1,48 3 3,4 24 1,778 3,484 2,562 3,006 Fisca l Year 2012 Average Average Monthly Monthly Em(!loxment Earnings 6,461 $ 3,4 88 4,952 3,4 12 1,501 3,742 2,193 3,801 2,760 3,101 KODIAK ISLAND BOROUGH Miscellaneou s Stat istical Data L1St Ten Fisca l Years 2005 2006 2007 2008 2009 2010 201l 2012 2013 ---1!Ui Land area -square miles 7,130 7,130 7,130 7,130 7,130 7,130 7,130 7,130 7,130 7,130 Miles of improved st re et 25 .6 25.6 25.6 25.6 25.6 25.6 25.6 26.1 26 .1 26.1 Building permits ; Penn it s iss ued 205 222 190 190 192 208 204 167 219 155 Value of buildings (thou sands) 12 ,689 11 ,928 12 ,058 33 ,14 5 15,007 16,445 30,832 10 ,171 91 ,619 36,652 Fire Protec tion: Number of fire sta tion s 2 2 2 2 2 2 2 2 2 2 Number of em pl oyees Police Protection: none (provided by the City of Kodiak within the city limits and by the State of Alaska outside the city boundaries.) Recreation : Parks (number of ac res) 223 223 223 223 223 223 224 224 224 224 Facilitie s: Numbe r of playgrounds 15 15 15 15 15 15 16 16 16 16 Number of swim min g pools Public Educati on: Number of schoo ls: Kodiak Area Elementary 4 4 4 4 4 4 4 4 4 4 Kod iak Area Middle School I I Kodiak Area High Sc hool I I I I I I I I Village Sc hoo ls (a) 7 8 7 6 7 7 8 8 8 7 Number of supp ort personnel (b) 14 6 151 202 205 217 217 215 2 15 193 181 Nu mber of teachers (e) 2 17 206 209 218 203 2 18 20 1 20 1 207 162 Number of stu de nt s 2,678 2,718 2,636 2,671 2 ,598 2,567 2 ,543 2,543 2,5 13 2,468 Number of Municipal Emp lo yees 41 4 1 43 43 43 43 43 45 45 48 Electi ons: Numbe r of regis tered voters 9 ,2 82 9 ,300 9,417 9 ,587 9,599 9 ,649 9,619 9,479 9,585 9 ,100 Nu mber voting in last e le cti on 2,18 1 2 ,200 2,407 2,105 2,477 2,477 2,311 2,139 1,250 1,968 Percent of registe red voters 23% 24% 26% 22% 26% 26% 24% 23% 13% 22% So urce s: Borough Departments, Kodiak Island Borough School District and City of Kodiak (a) The majority of ViI!age Schools are grades K-12 . (cl School district personnel figures inClude staffing lro m the General Fund and Grants . (b) All non-teaching employees . 137 Function: General Gove rnment Communit y and Economic Developm ent Mun ic ip al Solid Waste Coll ec ti on and Dispo sa l Ko di ak Fi sheries Resea rch Cent er Total So urce : Borou gh Fi nan ce Departm ent KODIAK ISLAND BOROUGH Fu ll -T im e Equi valent Bo rough Empl oyees by Fun ctio nlProgra m Last Ten Fi sca l Year s Full -time Equivalent Employees as of June 30: 2005 2006 200 7 2008 200 9 2010 2011 22 23 24 27 31 29 29 6 6 5 5 5 5 5 8 7 7 7 7 7 7 2 2 2 2 2 2 2 ---38 38 ~ 41 45 43 43 139 2012 2013 2014 30 30 33 6 6 5 7 7 8 2 2 2 ---45 45 48 2005 2006 Function General Government Elections Number of registered voters 9,282 9,300 Number voting in last elect ion 2,18 1 2,200 Percent of registered voters 23% 24% Public Safety Number of flTe stat ions 2 2 Number of employees Community and economic development Zoning comp lian ce pennits iss ued 187 150 Junk cars removed 125 100 Primary and secondary education Number of students 2,678 2,7 18 Number of General Fund certified staff 217 206 Number of General Fund classified staff 146 151 So lid waste disposal Tota1 so lid waste disposal in ton s 17 ,253 16,290 Baled waste in tons 11 ,557 11 ,444 Scrap metal in ton s 1,162 416 Asbestos, cubic yards 300 73 Source: Borough Finance Department l KODIAK ISLA ND BOROUGH Operating Indicators by Function Last Ten Fi sca l Years 2007 2008 9,417 9,587 2,407 2,105 26% 22% 2 2 2 12 2 14 58 261 2,636 2,67 1 209 218 143 137 2009 9,599 2,477 26 % 2 203 83 2,598 225 135 16,997 14 ,730 14 ,429 10,83 1 10,843 10,212 282 360 205 166 112 324 140 2010 2011 2012 2013 2014 9,649 9,619 9,479 9,585 9,100 2,477 2,3 11 2,139 1,250 1,968 26% 24% 23% 13% 22% 2 2 2 2 2 245 149 11 3 160 III 89 218 27 22 28 2,567 2,543 2 ,5 17 2,513 2,468 224 217 211 207 186 135 16 2 166 193 161 14 ,580 14 ,896 16 ,558 14,688 11 ,826 10 ,527 10 ,846 10,153 11 ,535 10 ,005 282 260 147 251 172 218 230 116 399 390 Function program GOVERNMENTAL ACTIVITIES Number of bui ldings (teachery housing, schools and office buildings) Veh icles Roads Streets (miles) Land area -square miles Police: none KODIAK ISLAND BOROUGH Capital Asset Statistic s by FunctionlPro gram Last Ten Fi sc al Years 200S 2006 2007 2008 19 20 19 18 8 8 9 10 25.6 25.6 25.6 25 .6 7,130 7,130 7,130 7,130 (provided by the City of Kodiak within th e city limits and by th e State of Alaska outs ide th e tity boundaries) Fire and Emergency Services Number of fire s tations 2 2 2 2 Number of Emergency respon se vehicles 10 " " 12 Eme rgency Ts unami Shelters BUSINESS-TYPE ACTIVITES Municipal Solid Waste Number of Baler Facilities (Landfills) Community H ealth & Public Services Mental He alth Facilities Hospital Culture Parks and Recreation Parks (number of acres) 223 223 223 223 Facilities: Number of Swimmin g Pool s I Number of playgrounds 15 15 15 15 Kodiak Island Research Facilities (marine research) I Donn facility (6 apartments) Sources : Supplied by Kodiak Island Borough Departme nt Heads Note: No capital asset indicators are available for the library function A description of the Kodiak Is land Borough's Capitalization and Depreciation policy is included in the Notes To The Basic Financial Statements 141 2009 2010 2011 2012 2013 2014 18 18 18 19 19 19 13 13 15 15 15 14 25 .6 25.6 25 .6 26 .1 26 .1 26.1 7,130 7 ,130 7 ,130 7,130 7,130 7,130 2 2 2 2 2 2 " 8 15 13 13 12 I 22 3 223 224 224 22 4 224 I I I 15 15 16 16 16 16 .1 I · j · J · J · J , J KODIAK ISLAND BOROUGH Federal and State Single Audit Reports and Supplementary Information Year Ended June 30, 2014 Altman, Roger~'ED C.....:...9Ga I PUBLIC c;-. ACCOUNTANTS KODIAK ISLAND BOROUGH Federal and State Single Audit Reports and Supplementary Information Year Ended June 30, 2014 KODIAK ISLAND BOROUGH Table of Contents Report Required Under Government Auditing Standards Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance Government with Auditing Standards Report and Schedules Required Under OMB Circular A-133 Report on Compliance For Each Major Federal Program ; Report on Internal Control Over Compliance ; and Report on the Schedule of Expenditures of Federal Awards Required by OMS Circular A-133 Schedule of Expenditures of Federal Awards Notes to the SChedule of Expenditures of Federal Awards Federal Schedule of Findings and Questioned Costs Corrective Action Plan State Single Audit Report and Schedule Report on Compliance For Each Major State Program ; Report on Internal Control Over Compliance; and Report on the Schedule of State Financial Assistance Required by the State of Alaska Audit Guide and Compliance Supplement 1-2 3-6 7 8 9-11 12 for State Single Audits 13-15 Schedule of State Financial Assistance 16-17 Notes to the Schedule of State Financial Assistance 18 State Schedule of Findings and Questioned Costs 19 (This page was left blank intentionally) REPORT REQUIRED UNDER GOVERNMENT AUDITING STANDARDS Altman, Roger~lEo c....:..:JGa I PUBLIC eJ -. ACCOUNTAN TS Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financia l Statements Performed in Acco rdance with Government , Auditing Standards Independent Auditor's Report The Honorable Mayor and Members of the Assembly Kodiak Island Borough Kodiak , Alaska Ladies and Gentlemen : We have audited , in accordance with the 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, 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 , 2014 , and the related notes to the financial statements, which collectively comprise Kodiak Island Borough 's basic financial statements and have issued our report thereon dated December 31 ,2014 . Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered Kodiak Island Borough's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances 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. Accordingly , we do not express an opinion on the effectiveness of Kodiak Island Borough's internal control. 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 a 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 basis . A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness , yet important enough to merit attention by those charged with governance . 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 The Honorable Mayor and Members of the Assembly Kodiak Island Borough Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies . Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses . However, material weaknesses may exist that have not been identified . Compliance and Other Matters As part of obtaining reasonable assurance about whether Kodiak Island Borough 's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws , 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 . Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing , and not to provide an opinion on the effectiveness of the entity's internal control or on compliance . This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity 's internal control and compliance . Accordingly , this communication is not suitable for any other purpose . ~/~/&J. Anchorage , Alaska December 31 ,2014 2 REPORT AND SCHEDULES REQUIRED UNDER OMS CIRCULAR A-133 Altman, Roger~'ED c.3 Ga I PUBLIC ~ • ACCOUNTANTS Report on Compliance For Each Major Feder al Proqram; Report on Internal Control Over Compliance; and Report o n the Schedule of Expenditures of Fede ral Awards Req uired by OMS Circular A·133 Indepe nde nt Auditor's Report The Honorable Mayor and Members of the Assembly Kodiak Island Borough Kodiak, Alaska Repo rt o n Compliance for Each Major Federal Program We have audited 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, 2014. Kodiak Island Borough's major federal programs are identified in the summary of auditor's results section of the accompanying Federal Schedule of Findings and Questioned Costs. Kodiak Island Borough's basic financial statements include the operations of its component unit, Kodiak Island Borough School District, which received $5,493 ,151 in federal awards which are not included in the Schedule of Expenditures of Federal Awards for the year ended June 30, 2014 . 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 A·133. Manageme nt's Responsibility Management is responsible for compliance with the requirements of laws, regulations , contracts, and grants applicable to its federal programs . 3 425 G Street Suite 500 Anchorage, Alaska 99501 Phone 907-274-2992 Fax 907-274-2993 Offices in Juneau and Soldotna A Professional Corporation The Honorable Mayor and Members of the Assembly Kodiak Island Borough Auditor's Responsibility Our responsibility is to express an opinion on compliance for each of Kodiak Island Borough's major federal programs based on our audit of the types of compliance requirements referred to above . 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 on compliance for each major federal program . However, our audit does not provide a legal determination of Kodiak Island Borough's compliance . Opin ion on Each Major Federal Program In our opinion , Kodiak Island Borough complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30 , 2014 . Ot her Matters The results of our auditing procedures disclosed an instance of noncompliance, which is required to be reported in accordance with OMB Circular A-133 and which is described in the accompanying Federal Schedule of Findings and Questioned Costs as Finding 2014-01 . Our opinion on each major federal program is not modified with respect to this matter. Kodiak Island Borough 's response to the noncompliance finding identified in our audit is described in the accompanying Federal Schedule of Findings and Questioned Costs and Corrective Action Plan . Kodiak Island Borough 's response was not subjected to the auditing procedures applied in the audit of compliance and , accordingly , we express no opinion on the response . 4 The Honorable Mayor and Members of the Assembly Kodiak Island Borough Report on Internal Control Over Compliance Management of Kodiak Island Borough is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above . In planning and performing our audit of compliance , we considered Kodiak Island Borough's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over 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 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 federal program will not be prevented , or detected and corrected , on a timely basis . A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies , in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance , yet important enough to merit attention by those charged with governance. 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 internal control over compliance that might be material weaknesses or significant deficiencies, and therefore , material weaknesses or significant deficiencies may exist that were not identified. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses . However, we identified a certain deficiency in internal control over compliance , as described in the accompanying Federal Schedule of Findings and Questioned Costs , as Finding 2014-001 that we consider to be a significant deficiency . Kodiak Island Borough's response to the internal control over compliance finding identified in our audit is described in the accompanying Federal Schedule of Findings and Questioned Costs and Corrective Action Plan . Kodiak Island Borough's response was not subjected to the auditing procedures applied in ·the audit of compliance and , accordingly , we express no opinion on the response . The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133 . Accordingly , this report is not suitable for any other purpose. 5 The Honorable Mayor and Members of the Assembl y Kodia k Island Borough Report on Schedule of Expenditures of Federal Awards Required by OMB Circular A-133 We have audited the financial statements of Kodiak Island Borough as of and for the year ended June 30 , 2014, and have issued our report thereon dated December 31 , 2014 , which contained an unmodified opinion on those financial statements . Our audit was conducted for the purpose of forming opinions on the financial statements as a whole. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by OMB Circular A-133 and is not a required part of the 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 basic financial statements . The information has been subjected to the auditing procedures applied in the audit of the financial statements and certa in 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 Ex penditures of Federal Awards is fairly stated in all material respects in relation to the financial statements as a whole. Anchorage , Alaska December 31 ,2014 6 KODIAK ISLAND BOR O UGH Schedu le of Expenditures of Fed eral Awards Year Ended June 30 , 2014 Federal CFDA Number U.S . Department of Homeland Security· Passed through the State of Alaska , Department of Military and Veteran Affair s: 2012 State Homeland Se curity Program 97.067 Bioplug Sergeant Creek 97 .036 Panamaroff Creek Culverts 97.036 Total U.S. Department of Homeland Security Denali Comission . Direct Programs - Anton larsen Dock Replacement 90 .100 U.S . Department of Housing and Urban Development Oirect Program - FY 2009 EDI Special Project 14 .251 Passed through Kodiak Island Housing Authority - Payments in Ueu of Ta xes 14 .867 Passed through Alaska Housing Finance Corporation· Payment in lieu of Taxes R881 Total US Departmen t of Housing and Uman Development U.S . Department of the Interior: Direct Programs : Payments in lieu of Taxes (BlM) 15.226 Refuge Revenue Sharing 15.659 Passed through Kodiak Soli and Water Conservation District· Lake Omin Fish Paggage Project 15.631 Total U.S. Department of the Interior U.S. Environmental Protection Agency - Passed through the Stale of Alaska , Department of Environmental Conservation : Alaska Clean Water Revolving Loan Funds 66.458 Alaska Clean Water Revolving loan Funds 66.458 Total U.S. Environomental Protection Agency Total federal financ ial assistance Reconciliation to federal source revenues in the Statement of Revenues , Expenditures and Changes in Fund Balances : Total Federal financial assistance Clean Water Rev olving Loan Funds are not treated as revenues in the financial statements ; however, are required to be presented on this schedule in accordance with OMS Circular A-133. The loans are recorded in the Business-type activities and Enterprise funds . See accompanying notes to Schedule of Expenditures of Federal Awards . 7 Pass -through Grantor's Award Number EMW-2012-SS-0012 7 DR-1865-AK FEMA 1865-DR-AK 01402-01 B-09-SP-AK-0288 None None None None F13AC00878 Loan # 505041 Loan # 505061 Program or Award Federal Amount E x ~ndjtures $ 31 ,651 31,651 30,8 51 80 22 ,998 1,276 85,500 33,007 80,000 51,283 475,000 101,617 23 ,529 23,529 15,6 54 15 ,654 514 ,183 140,800 1,501 ,969 1,501 ,969 205 ,518 205,518 1 ,707 ,487 1 ,707,487 40 ,000 1 ,095 1,747,487 1,708,582 11 ,787,792 1,955,880 1 ,500,000 375,468 13 ,287 ,792 2 ,331 ,348 $ 15,714,962 4,265,020 $ 4 ,265 ,020 (2 ,331 ,348) $ ==1 .. ,9",3,,3,g,6!,!.72 .. (This page was left blan k intentionally) KODIAK ISLAND BOROUGH Notes to the Schedule of Ex penditures of Federal Awards Year Ended June 30 , 2014 (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 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 $5,493 ,151 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, 2014, were issued for the Kodiak Island Borough School District. (3) Pass-Through Funds The Borough did not pass any federal funds through to subrecipients during the year ended June 30,2014 . (4) Non-Cash Awards During the year ended June 30, 2014, the Borough received no federal awards in the form of non- cash awards . (5) Retainages Payable Retainages payable on contracts are not charged to the grants until they are paid to the contractor. Accordingly, expenditures exclude amounts payable for retainages on contracts . 8 KODIAK ISLAND BOROUGH Federal Schedule of Finding s and Questioned Costs Year Ended June 30, 2014 Section 1-Summary of Auditor's Results Financial Statements Type of auditor's report issued : Is a going concern emphasis-of-matter paragraph included in the audit report? Internal control over financial reporting : Significant deficiency(ies) identified? Material weakness(es) identified? Noncompliance material to financial statements noted? Federal Awards Internal Control over major programs (Section .510 (a)(1»: Significant deficiency(ies) identified? Material weakness(es) identified? Any material noncompliance with provisions of laws, regulations, contracts, or grant agreements , related to a major program (Section .510 (a)(2»? Type of aU9itor's report issued on compliance for major programs: Any audit findings disclosed that are required to be reported in accordance with Circular A-133, Section .510(a) (3) or (4)? Identification of major programs: Unmodified Yes _X_ No Yes _X_ No Yes _X_ No Yes _X _ No ----2S.... Yes No Yes _X_ No Yes _X_ No Unmodified Yes _X_ No CFDA Number(s) 66.458 14 .251 Name of Federal Program or Cluster Alaska Clean Water Revolving Loan Funds EDI Special Project FY2009 Dollar threshold used to distinguish between Type A and Type B programs : Auditee qualified as low-risk auditee? 9 $ 300,000 Yes _X_ No KODIAK ISLAND BOROUGH Federal Schedule of Findings and Questioned Costs , Continued Section 11-Financial Statement Findings The Kodiak Island Borough did not have any findings that related to the financial statements . Section 11/-Federal Award Findings and Questioned Costs Finding 2014-001 Significant Deficiencyl Noncompliance Fede r al Agency: Program: Award Number/CFDA No.: Award Year Condition: Cr iteria: Context: Ca use: Effect: Lack of Interna l Contr ol over Activiti es Allowed or Unallowed and Allowable Costs I Cost Principles U.S. Department of Housi ng and Urban Development FY 2009 EDI Special Project B-09 -SP-AK-0288; CFDA No. 14.251 2009 During our audit work over allowable costs , we noted that $6 ,038 of salaries and administrative overhead were charged to the grant. Provisions of the grant agreement state that " ... no unobligated funds for EDI grants may be used for any purpose except acquisition , planning , design , purchase of equipment, revitalization , development or construction ." The number of transactions were relatively few compared to the program total . After the error was discovered the costs were moved to the General Fund and are not reported in the program for financial statement purposes in FY 2014 . The Borough has set aside funds equivalent to the amount of unallowed costs already reimbursed and earmarked these funds for future allowable grant expenditures in FY 2015 . Lack of internal control over allowable costs . Unallowed or questioned costs may lead to the granting agency requesting repayment of funds disbursed , withdrawal of the grant entirely , or a reduction in future funding from the agency . 10 KODIAK ISLAND BOROUGH Federal Schedule of Findings and Questioned Costs , Continued Questioned Costs: Recommendation: Management's Response : None . The unallowed costs were moved to the General Fund once the error was discovered . We recommend the Borough finance personnel carefully review specific grant budgets and requirements to ensure unallowed costs are not charged to federal grant programs. Management concurs with the finding . See corrective action plan . Section IV -Summary of Prior Audit Findings Financial Statement Fi ndings Finding 2013-001 Significant Deficiency Condition: Status: Finding 2013-002 Material Weakness Condition: Status: Internal Control over Leases During our audit work over lease revenue associated with the Kodiak Fisheries Research Center (KFRC), we noted that the Borough does not have adequate internal control procedures in place to monitor leases . This finding has been resolved . Internal Control over Construction Work In Progress During our review of capital assets it was noted that the balance in construction work in progress (WIP) was overstated as it included construction projects that had been completed in FY12 . This finding has been resolved. 11 Finding 2014-001 Name of Contact Person: Corrective Action: Proposal Completion Date: KODIAK ISLAND BOROUGH , ALASKA Corrective Action Plan Year Ended June 30 , 2014 Internal Control ove r Activities Allowed or Unallowed and Allowable Costs I Cost Principles Ka~eton Short, Finance Director We will ensure that all grant award documents are reviewed to ensure that the Borough is aware of allowable costs under each award. We will also perform budget to actual checks when submitting financial reports to ensure that budget line items have not been exceeded . Immediately. 12 (Th is page was left blank intentionally) STATE SINGLE AUDIT REPORT AND SCHEDULE Altman, Rog~[~'ED C..3Ga I PUBLIC QJ • ACCOUNTANTS Report on Compliance For Each Major State Program; Report on Internal Control over Compliance; and Report on the Schedule of State Financial Assistance Required by the State of Alaska Audit Guide and Compliance Supplement for State Single Audits Independent Auditor's Report The Honorable Mayor and Members of the Assembly Kodiak Island Borough Kodiak, Alaska Report on Compliance for Each Major State Program We have audited Kodiak Island Borough's compliance 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 major state programs for the year ended June 30, 2014 . Kodiak Island Borough's major state programs are identified in the accompanying Schedule of State Financial Assistance . Kodiak Island Borough's basic financial statements include the operations of its component unit, Kodiak Island Borough School District, which received $36,993,884 in state awards which are not included in the Schedule of State Financial Assistance during the year ended June 30,2014. 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 Single Audit Guide and Compliance Supplement for State Single Audits. Management's Responsibility Management is responsible for compliance with the requirements of laws , regulations , contracts , and grants applicable to its state programs . Auditor's Responsibility Our responsibility is to express an opinion on compliance for each of Kodiak Island Borough's major state programs based on our audit of the types of compliance requirements referred to above . 425 G Stree t Suite 500 Anchorage, Alaska 99501 Phone 907-274-2992 Fax 907-274-2993 Offices in Juneau and Soldotna 13 A Professional Corporation The Honorable Mayor and Members of the Assembly Kodiak Island Borough 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 Unite Slates; and the State of Alaska Audit Guide and Compliance Supplement for State Single Audits. Those 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 performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major state program . However our audit does not provide a legal determination of Kodiak Island Borough's compliance . Opinion on Each Major State Program In our opinion , Kodiak Island Borough complied, in all material respects, with the types of 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 , 2014. Report on In terna l Co ntrol over Compliance Management of Kodiak Island Borough is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above . In planning and performing our audit of compliance, we considered Kodiak Island Borough's internal control over compliance with the types of requirements that could have a direct and material effect on each major state program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major state program and to test and report on internal control over compliance in accordance with the State of Alaska Audit Guide and Compliance Supplement far 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 . A significant deficiency in internal control over compliance is a deficiency , or a combination of deficiencies , in internal control over compliance with a type of compliance requirement of a slate program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance . 14 The Honorable Mayor and Members of the Assembly Kodiak Island Borough 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 internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the State of Alaska Audit Guide and Compliance Supplement for State Single Audits. Accordingly, this report is not suitable for any other purpose. Report on Schedule of State Financial Assistance required by the State of Alaska Audit Guide and Compliance Supplement for State Single Audit We have audited the financial statements of Kodiak Island Borough as of and for the year ended June 30, 2014, and have issued our report thereon dated December 31 , 2014, which contained an unmodified opinion on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements as a whole. The accompanying Schedule of State Financial Assistance is presented for purposes of additional analysis as required by the State of Alaska Audit Guide and Compliance Supplement for State Single Audits and is not a required part of the 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 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 State Financial assistance is fairly stated in all material respects in relation to the financial statements as a whole. Anchorage, Alaska December 31,2014 15 (This page was left blank intentionally) KODIAK ISLAND BOROUGH Schedule of State Finan cia l Assistance Year ended June 30 , 2014 Program Program or Award Siale Number Amount Exeenditures Department of Commerce , Community and Economic Development· Dire ct Programs : Community Re venue Sharing None $ 731 ,314 731 ,314 Anton Larsen Dock 12·DC·388 2 ,000,000 7,830 Emergency School Generators 12·DC·625 2,182,000 600,688 Womens Bay Tsunam i Emergency Shelter 12·DC·390 1,025 ,000 7,317 Womens Bay Playground Upgrades 13·DC·134 100,000 7,130 Tsunami Sirens , Upgrades , Replacements , Additions 07·DC·329 100,000 4,030 Chiniak Warning Siren 12·DM·109 45,000 475 Landfill Expansion Grant 13·DC·547 3,000,000 794,038 Long Term Care Facility Planning and Design 12·DC·389 1,275,000 215,000 landfill Leachate Treatment Plant 7 Related Phase III 14·DC-{)74 4 ,529,000 4,529,000 Fire Protection Area No .1 Emergency Generator 13·DM·185 40,000 20 ,114 Kodiak High School Vocation and Physical Educati on Facilities 13·DC-604 7,000 ,000 5 ,816 ,726 Total Department of Community and Economic Development 22 ,027,314 12,733,662 Department of Administration - Direct Programs : HB 65 PERS Supplement on·behalf paymenl None 463,333 463,333 Motor Vehicle Tax None 253 ,230 253,230 716,563 716 ,563 Department of Education and Early Development - Direct Programs - Debt Retirement Program None 3 ,347,5 17 3 ,347 ,517 Department of Revenue : Direct Programs: Fisheries Business Tax None 1,546 ,308 1,546,308 Commercial Passenger Vessel Tax None 4,600 4 ,600 Fisheries Resource Landing Tax None 97,679 97 ,679 Telephone/Electric Tax None 15,792 15 ,792 Liquor license None 220 220 Tota l Department of Revenue 1,664,599 1,664,599 Department of Environmental Conservation - Direct Programs : Clean Water Revolving Loan Funds 505041 None 2 ,675,756 441 ,902 Clean Water Revolving loan Funds 505061 None 1,500,000 374,532 Total Department of Environmental Conservation 4,175,756 816,434 (continued) 16 Department of Military and Ve terans Affairs : Direct Programs : Local Emergen cy Planning Committee Panamaroff Creek Culverts KODIAK ISLAND BOROUGH Schedule of State Financial Assistance , continued Program Number 14LEPC-GR35602 $ FEMA-1865-DR-AK Total Department of Military and Veteran Affairs Program or Award Amount 13,430 Total State of Alaska $ 31 ,952 ,845 Reconciliation to State of Alaska revenues in the Statement of Revenues, Expenditures, and Changes in Fund Balances: Total State financial assistance State awards included in this schedule that are recorded in the Business-type activities : landfill Expansion Grant Long Term Care Facility Planning and Design Landfill Leachate Treatment Plant 7 Related Phase III Clea n Water Revolving Loan Funds received in the current year are not treated as revenue in the financial sta tements; however, they are required t o be presented on this schedule by the State of Alaska Aud it Guide and Compliance Supplement for State Single Audits. The loan is recorded in the Business·type activities and Ente rprise Funds . See accompanying notes to the Schedule of State Financial Assistance. 17 13-DC-547 12-DC-389 14 -DC-074 $ $ 19,292 ,630 (794,038) (215 ,000) (4 ,529 ,000) (816 ,434) 12 ,938 ,158 Expenditures 13 ,430 425 13,855 19,292 ,630 KODIAK ISLAND BOROUGH Notes to Schedule of State Financial Assistance Year Ended June 30 , 2014 (1) Basis of Accounting This schedule was pre'pared 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 $36,993 ,884 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 to separate reports issued for the Kodiak Island Borough School District dated November 14, 2014 . (3) • Major State Programs for Compliance: State Revenue Sharing Emergency School Generators Clean Water Revolving Loan Funds 505041 Clean Water Revolving Loan Funds 505061 Landfill Expansion Grant Long Term Care Facility Planning and Design Kodiak High School Vocational and Physical Education Facilities HB 65 PERS On-behalf Payment Motor Vehicle Tax Debt Retirement Program Fisheries Business Tax Landfill Leachate Treatment Plant 7 Related Phase III 18 (This page was left blank intentionally) KODIAK ISLAND BOROUGH State Schedule of Findings and Questioned Costs Year Ended June 30 , 2014 Section I -Summary of Auditor's Results Financial Statements Type of auditor's report issued : Internal control over financial reporting : Material weakness(es) identified? Significant deficiency(ies) identified? Is a material noncompliance disclosed? State Financial Assistance Internal control over major programs : Material weakness(es) identified? Significant deficiency(ies) identified? Type of auditor's report issued on compliance for major programs: Dollar threshold used to distinguish a state major program: Section II -Financial Statement Findings Unmodified Yes..lL. No Yes..lL. No Yes..lL. No Yes ..lL. No Yes ..lL. No Unmodified $ 100,000 The Kodiak Island Borough did not have any findings that related to the financial statements . Section III -State Award Findings and Questioned Costs The Kodiak Island Borough did not have any findings that related to State awards . Section IV -Summary of Prior Audit Findings The Kodiak Island Borough did not have any prior year findings related to State awards. See Federal Schedule of Findings and Questioned Costs for status of prior year financial statement findings . 19